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Preparing for Natural Disasters—A Quick Guide for FAs

Deadly hurricanes Harvey and Irma caused billions worth of damage recently. Residents in Houston, Miami and other parts of the Gulf Coast and Atlantic are still dealing with the aftermath. Financial advisors in the affected areas also were forced to evacuate and notify their clients—some temporarily lost power or cell service.

It’s a good reminder to update your contingency plan, and make sure you’re prepared should a hurricane, tornado, ice storm, earth quake, wild fire, or freak snow storm disrupt your normal routines and ability to communicate. (One Florida advisor I spoke to awhile back recalls losing power for three weeks after a bad hurricane and having to set up a command center from his home.)

Could you survive if your phones and internet service were down? Would you be able to weather having no electricity, no water, or power for extended periods? How would you continue to be a resource for clients who were also being affected by the devastation?

Here are some keys to creating a natural disaster contingency plan:

  1. Maintain a list of critical contacts. Make sure you have convenient offsite access to updated contact records of all your clients, prospects, stakeholders and employees. In an emergency you will need to let clients know that you are still watching their money. See if they need assistance, like access to their auto and home insurance policies. If their house is blown away, you will be able to give them necessary information to get their lives back in order. Being able to communicate can reduce the chaos you feel, and reassure clients and staff that you’re still in charge.
  2. Plan for alternative communication. Make sure you have recently requested and updated your clients’ e-mail addresses and cell-phone numbers. Record the numbers of their closest friends and relatives. Maintaining current e-mail addresses makes communicating with clients much easier in a crisis. Even when they are evacuated, clients can access email from their digital devices or any computer. This may be an easier form of communicating than by phone if service if landline service is cut and you’re operating from an evacuation location.
  3. Keep your team informed. Educate team members about your team’s contingency plan in the event of a crisis, and even plan for your death or incapacity. Make sure the principals of your firm are adequately insured and that you’ve addressed what will happen in the event of an untimely death. Develop a contingency plan for how you will deliver services to each client and what outside help will be brought in. Staff members and partners should be cross-trained to the extent possible. Make sure your personal risk management planning, including disability and life insurance, is in order. Gather together emergency supplies like bottled water, flashlights, gloves, and perhaps a power generator. Rehearse your written emergency plan regularly with your team so they feel confident.
  4. Secure updated records and software apps. To ensure that you can continue to operate your business, you must co-locate your financial records, business materials and software apps offsite. You should have offsite access to your computer operating system and applications software. You need to back up data daily and rotate these disks off site. To hasten insurance settlements, you should maintain an inventory of your office equipment and the necessary documentation. Be sure to store the following offsite as well: an updated copy of the firm’s standard operating procedure, a supply of essential office stationery and business cards, updated copies of contracts, licenses, and operating agreements, as well as financial information for your firm.

Assess your risks depending on your location and the most likely contingencies. Ask yourself how your employees will continue to get paid and your clients will continue to have access to their funds – if you can’t get to your office.

Without a contingency plan, you won’t know what to do. When you’re prepared for an emergency, you’ll weather the storm.

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