These planners kept on working right through hurricanes Katrina and Rita.
Planners are constantly being reminded of the need for a disaster plan-that is, a plan to carry on operations in the midst of a natural (or unnatural) disaster that might interrupt access to resources we take for granted.
The 2005 hurricane season gave some in the planning community an opportunity to test out and refine their disaster plans. This is the story of five planners who braved high winds, floods and electrical outages to keep their businesses running and their clients calm. The rest of us surely can refine or implement our own disaster plans from the lessons they learned.
Hallford Financial Advisors, Jackson, Miss.
Alice Hallford works out of a home office about 180 miles from the Gulf Coast and New Orleans, an area that didn't require evacuation during Hurricane Katrina. "A few hours before Katrina reached us, I backed up my desktop [computer], and two hours thereafter, our electricity went out and remained out for five-and-a-half days," says Hallford.
The first thing she did right was having a generator on hand. "Initially, we used our generator for the refrigerator and freezer, adding on the cell phones and laptops periodically to recharge the batteries. It's amazing what one's priorities become during a disaster."
Hallford's cable modem Internet access went out the first day, but she was able to use a backup, a dial-up modem. "It was usually very slow, but adequate for the few securities trades I needed to make and to send e-mails twice a day," she says. Hallford adds that she was glad to have both a landline and cell phone, because both lost and regained service periodically and one acted as a backup for the other.
As everyone knows by now, many Gulf area oil refineries lost power and shut down, which means Hallford was without a source of gasoline for her generator after a couple of days. To conserve gas, she began just turning on the generator during the day and leaving it off at night.
All in all, Hallford fared pretty well. Had it been necessary to evacuate, she would have transferred the backup of her desktop computer, including her newly created paperless office, to her Sony Vaio laptop and taken that with her, she says.
John Bergland, Bergland Capital
Management Inc., Ridgeland, Miss.
Like Hallford, John Bergland lost electricity and sees this as one of the main threats to business continuation during a natural disaster. One thing became crystal clear, he says: "Nothing goes forward without electricity. Katrina turned Mississippi's electricity off. Without it, you can't pump gasoline or go to the grocery store." As electricity was gradually restored, Bergland found long lines at those gas stations that had electricity.
His solution was unique, though not easily duplicated. "Living on a boat, I simply turned on my generator and ran it for the two days until our electricity was restored." With a 250-gallon gas tank, Bergland didn't have the gasoline availability problems Hallford had.
As a result of Katrina, he's redoubling his efforts to create a paperless office. "We are also completing the outsourcing of our portfolio management system to an online system," says Bergland.
Michael Beduze, The Life
Planning Group, Houston, Texas
Michael Beduze admits he was caught a bit off guard. "I planned to have communication backup in the form of cell phones from two different area codes. I'm in Houston and have clients in Louisiana, so I had service out of both regions. However, the Louisiana service was rarely available due to infrastructure damage and evacuees depending on cell phone service. And the Houston service was jammed with Texas evacuees 'slamming' cell phone towers from the roadways leading out of town."
Another hole in Beduze's plan arose when he lost the use of his e-mail server. "We finally set up Yahoo accounts and forwarded new contact info to all of our clients who use e-mail."
His plans weren't totally scuttled, though, because, like most of our other advisors, Beduze says he's completely paperless, with everything backed up to his laptop. "Assuming I have access to the Internet, I can run my company off laptops."
All in all, he says, the experience was a good test of his preparedness. "All of the work we'd done scanning everything and getting organized really paid off. It was a good feeling knowing that I could quickly pack one vehicle and operate fairly efficiently from a remote location, if needed."
Sherri Joubert, LifeDirections Financial Planning LLC,
Baton Rouge, La.
Sherri Joubert had written up a business continuity plan in preparation for her audit by the state last January, of which she says, "It worked as well as could be expected, considering everything that happened to us." Like Hallford, Joubert was without power for five days during Katrina and another four days with Hurricane Rita, during which she couldn't operate except intermittently by generator when gas was available.
In addition to the generator, what Joubert found particularly valuable after living through these hurricanes was her waterproof safe, the redial button on her telephone and bottled water. "Backup copies of everything on my hard drive are kept in a waterproof safe in my garage, so I didn't experience any data loss." Phone service was iffy, says Joubert: "Having a redial button on our phones was essential, because we often had to dial up to ten times in rapid succession to get a call through. And the tap water became undrinkable so we had to drink, cook and brush our teeth with bottled water until we could flush our pipes."
One addition Joubert will make to her continuity plan is keeping photos and important papers in sealed plastic file boxes, or even scanning them onto an external hard drive that can be taken along if evacuating.
Bob Reed, Personal Financial Advisors LLC, Covington, La.
Bob Reed stayed in his office-a cinder block building-not his home, during the hurricane. "Right after the hurricane, I evacuated north to Alabama where I have family. I just grabbed my laptop, plugged it in at a friend's house and was operational."
Reed backs up critical files three times a week onto several sets of CDs, so he gave a set to his assistant, also fleeing for higher ground, and he took a set. The laptops he and his staff use all have the same program files on them so, with identical backups, they could all keep working. This system turned out to be invaluable because, says Reed, "Evacuees weren't being let back into our Louisiana parish, and we had no electricity anyway."
"We're pretty much paperless, too," says Reed, "So it felt good we didn't have paper going everywhere or getting wet. In fact, it made me think even more about having a virtual online filing cabinet and also backing up to external hard drives because they're easier to tote around." Speculating even further, Reed says it might be good to have an online client relationship management system as well.
Is there a hurricane or similarly devastating event in your future? If so, or if you simply don't want to play the odds, the experiences of our hurricane-impaired advisors suggest that you pay attention to the basic services that could be interrupted. In other words, what would you do if you had to operate in your current location without some of the services that we all take for granted, or, if you had to pick up your entire operation, leave your home or office, and operate hundreds of miles away in unfamiliar territory?
The event that kicked most of these advisors' disaster plans into high gear was loss of electricity. To keep operating without juice, you can hook up a generator or evacuate to someplace that does have power. If relying on a generator, an ample but safe supply of gasoline is needed. If one's cable or DSL Internet access goes down, having a dial-up account at the ready is a good idea. So is an old-style landline phone-one that's not dependent on electrical power-in addition to a cell phone.
If the need to evacuate seems likely, backing up to a laptop is essential (or, indirectly, to another medium that can be fed into the laptop) because you need to be able to take a computer with you. In the event you can't travel with your electronic toys, think about using Web-based versions of critical software, like CRMs, portfolio reporting systems, document storage systems and financial planning software; that way, you can flee unburdened and all you need to reopen for business elsewhere is a borrowed or rented computer and an Internet connection. And don't forget that backup e-mail address on the Web.
And if you are leaving your electronics behind, make sure you take a written record of serial numbers and photographs of your equipment. In fact, it might be a good idea to get yourself a 2GB mini USB drive that will fit in your pocket and keep really critical information on it-scanned copies of equipment receipts and photos of these belongings in order to make an insurance claim.
At one time, advisors were free to embrace virtual office systems-or not. With the world becoming a more dangerous place, you now have fewer choices.
David J. Drucker, M.B.A., CFP, a
financial advisor since 1981, now writes, speaks and consults with
other advisors as president of Drucker Knowledge Systems. Learn more
about his latest book, The One Thing... You Need to Do as Told by the
Financial Advisory Industry's Top Coaches, Consultants and Industry
Insiders (The Financial Advisor Literary Guild, 2005), at
www.daviddrucker.com, and about the new practice management support
portal, Practice Lifecycle at www.practicelifecycle.com.