By: Jim Perhacs, Guest Blogger and Managing Director, with Kevin Sullivan, Guest Blogger and Director of Compliance
Published September 13, 2017
On August 25, 2017, Hurricane Harvey made landfall in the U.S. causing unbelievable devastation along the Texas coast and displacing thousands of people. My heart goes out to those families and businesses who were impacted by Harvey’s devastation. We have a number of advisors who are affiliated with Private advisor Group who are located in Houston, and they were very fortunate to avoid having any major impact from the hurricane to their families, homes and businesses. We require all of our advisors to maintain a business continuity plan and test them on an annual basis. I believe this helped our advisors maintain service and communications with their clients in the days after the hurricane hit.
Natural disasters are rare and unpredictable, but the loss and devastation in the aftermath show a common theme. In 2011, Hurricane Irene ravaged the Northeast with wind, rain, and storm surge causing widespread flooding. One of the lessons of that storm was the importance of understanding insurance coverage. Many homeowners discovered their damage was not covered, and after the fact is never a good time to find out these details. One year later, Hurricane Sandy hit with broader fury but less inland rainfall. The wind damage however, caused extended roadblocks and massive power outages for extended periods of time. Lack of mobility and communicating to the community at large became very challenging. Financial advisors conduct account reviews on an annual basis, which is a perfect time to remind clients to review their household and flood insurance if needed, and review some basics of having a financial and family emergency plan.
Steps for Being Financially Prepared
Planning for natural disasters is in many ways an extension of personal financial planning. Job loss, house fire, sudden disability or unseen medical emergencies and senior care are all things we should prepare for in advance to mitigate the impact if and when they occur. Having a financial plan in place means you’ll already have many of the important documents you’ll need as part of your financial emergency preparedness. Those records should be stored securely with fire resistant and water proof protection. We have become so dependent upon technology that much of our personal information is stored on our devices. We forget that those devices are useless without power! Have a laminated, waterproof, condensed list with contacts and important information, including medical if you need to evacuate your home.
Things tend to get lost in the mail and any type of emergency disaster can disrupt mail service for extended periods. If you depend on Social Security income, or any other type of benefits, sign up to receive them electronically if possible. Additionally, as part of your ongoing financial process and review, evaluate your estate planning documents. Top priority is establishing or updating your will. Also consider a durable power of attorney, health care proxy, and ensure your beneficiaries are updated on all your accounts and insurance policies. It is also imperative to mention proper redundancy of information. As I mentioned above, all our advisors have a business continuity plan. Having your personal information stored in multiple locations is like having a personal continuity plan. There are a number of reputable companies like Everplans that specialize in secure, cloud-based storage that can be accessed by the user at any time. When everything is lost due to fire and flood, utilizing a system like this can literally mean saving lives.
September is National Preparedness Month
This month is a great time to take steps personally to review your family and financial emergency plan. This is especially important for seniors. Each state has some form of a Special Needs registry where people with disabilities, limited mobility, medical needs, transportation assistance, or personal care assistance can sign up. The individuals do not have to sign up themselves, as anyone can sign up someone with those challenges. The information is confidential; all you have to do is dial 2-1-1, and you’ll be directed to your state. They will contact the local emergency planners and first responders who maintain the list and will assist those individuals in an emergency event. Investment advisors should make aware this valuable service to clients, family members, and trusted contacts. While government agencies have improved in preparedness and response capabilities during an emergency, their resources will be tested and limited. You ultimately must be responsible for you and your family’s health and well-being, to any extent that you are capable!
The first step to being prepared is simply to have an emergency plan, and then make sure everyone in your household understands it. A family emergency plan is a document prepared ahead of time, and it should contain emergency and out-of-town contacts, a meeting place, and the names, date of birth, social security numbers, and medication information for all family members.
For more information on how to be prepared for a disaster, the Federal Emergency Management Agency (FEMA) has an excellent website with information for overall disaster preparedness, including an Emergency Financial First Aid Kit.
If you’d like to volunteer, help or donate in any way, pay attention to these tips from the Federal Trade Commission:
- Watch for organizations that are using names that closely resemble better-known reputable organizations. For example: givetotheredcross.org instead of redcross.org.
- Avoid anyone who uses high-pressure tactics such as trying to get you to donate immediately without giving you time to think or research the organization.
- Never give a cash donation or wire money to an organization.