As Hurricane Ian rolled over Florida and turned toward South Carolina, financial advisors who live and work in those states were bracing themselves for difficult days ahead for their clients and themselves.

Among those advisors, Richard Ehrlich, founder of Secure Wealth Planning Group in Boca Raton, Fla., said he had just hung up a call from a client who lived on Marco Island, which took a direct hit from Ian.

“It’s rough. There’s spotty cell service, lots of flooding and damage,” he said. “When you’re talking about a potential catastrophe, a lot of the help you give your clients you give in advance, before the disaster. You have to make sure they have the right amount of insurance, and the right amount of cash on hand.”

Checking In
Other advisors spoke of hours spent preparing for the storm by checking in with clients.

“I have been texting with clients on the west coast of Florida since Monday [before the storm made landfall], just to make sure they and their loved ones are safe or have evacuated,” said Peachie Thompson, founder and CEO of Peach Insurance Services in Ponte Vedra, Fla., on the east coast of the state, where the storm’s impact was minimal.

Thompson reassured clients that the hurricane’s effect on the insurance policies she recommends will probably be minimal, too. “Life insurance carriers cannot increase premiums on existing policies,” she said, and the larger insurance carriers will likely absorb most of the damage without repricing future policies.

Supporting Families
Sally Cates, a spokeswoman for Dynasty Financial Partners, which moved its headquarters from New York to St. Petersburg three years ago, said it’s important for her firm to support families who have been impacted by the storm. Specifically, she and her team plan to “collect badly needed item such as food, baby supplies, etc., and work with the Red Cross in delivering items,” she said.

To be sure, many employees and clients lost power and have a great deal of debris to clear up. But although Hurricane Ian was the largest storm in more than a decade, hurricanes are not uncommon in that part of the country. Consequently, Dynasty has a continuity plan in place to keep the company functioning smoothly even if and when staff has to work remotely.

“Dynasty’s business continuity plan focuses on client communication, employee communication, and ensuring critical business functions have no disruption,” she said. She cited an internal emergency text messaging system and a policy to make sure that “key members of mission critical departments”—operations, technology and finance—were in a safe location with either friends and relatives or in a hotel outside the storm zone with an internet connection and electricity.

As a result, said Cates, her firm’s partners across the U.S. experienced no interruption of business.

Predicting The Unpredictable
For others, though, the hurricane was a wake-up call.

“Hurricane Ian is another shot of pain in a tough year for investors,” said Brian Frank of Frank Capital in Key Biscayne, Fla. Survivors, he said, will not only have to deal with clearing away the aftermath of 10 feet or more of water but also face months or years of hassling with insurance companies and contractors as they hope to rebuild.

“Clients of our firm are fortunate enough to have had large cash balances and short-duration fixed income to draw upon,” he said, but that is “small consolation.” His firm, he explained, has a “strict valuation discipline” that he credits with helping keep clients out of risky securities.

In the wake of the disaster, Frank turned somewhat philosophical. “Events like Hurricane Ian remind us all that risk is unpredictable and happens fast,” he said. “Those who follow a value strategy [as opposed to a more aggressive growth strategy] are able to face tough events like bear markets and hurricanes.”

While risk management is done on a client-by-client basis, Ehrlich said he has a rule of thumb for “cash in the house”: 60 days’ worth of expenses.

Ehrlich said because his firm is fee-based, comprehensive financial planning includes helping clients with maximizing insurance, finding insurance adjusters and accessing money in their accounts they might need. “Everything we do as a firm is downside protection, so we build a lot of safety features into portfolios,” he said, including investments like structured notes that generate income when stocks are down so that even when tough times are made tougher, he can deliver good news.

How long Ehrlich’s clients will have to wait to be made whole will depend on utility companies, adjusters and contractors, he said. In the meantime, making sure his clients know he’s watching out for them financially provides them with some peace of mind. Luckily, he said, he has only a few clients who were in the path of Ian. But the advice he and other advisors have under these circumstances would apply to communities dealing with floods, tornadoes and wildfires.

Facing Down Challenges
Curtis H. Parry Jr., founder and CEO of RIA Unique Wealth, an RIA with offices in Tampa and Clearwater, Fla., said, “Florida was already having challenges with homeowner's insurance prior to Hurricane Ian,” meaning that the frequency of major storms makes many properties uninsurable. “Federal and state financial assistance will be greatly appreciated.”

Buildings in Tampa survived mostly unscathed, he noted, though most homes were still without power.

Like Thompson at Peach Insurance, Parry reached out to clients before the hurricane touched ground—just to see if they needed help with sandbags, boarding up their windows, or other preparations. After the hurricane passed, many clients called back to “ask if we're all right,” he said. “Clients are genuinely concerned for our well-being.”

It’s important to let clients know you care about them, not just their money, he said. “We will be back in touch with clients one-by-one to ask how they're holding up and to identify if there's anything in particular we can do to help,” said Parry.

Caring about and for clients is also important to Michael Zmistowski, another financial planner in Tampa. When a client—a fragile 84-year-old widower with no family, who'd been a client for nearly 38 years—pulled up to Zmistowski’s house to talk about the impending storm, "he was a little scared," recalled Zmistowski. So Zmistowski and his wife invited the man to stay in their spare bedroom. "My wife and I both enjoyed the extra company,” said Zmistowski, “especially during the 15 hours when we had no electricity."

Good Advice
The devastation affected clients of advisors in calmer climes as well.

“We reached out to all of our clients who own property in that area to express our concern and support,” said Kenneth Van Leeuwen, managing director and advisor at Van Leeuwen & Co. in Princeton, N.J.

His advice for devastated clients, gathered from an expert in the property and casualty insurance field, was first to assess your damage and file a claim immediately. If you have separate flood and wind coverage, he said, make sure you file both sets of claims.

Second, he said, be patient because insurance companies will be inundated. “After you file your claims, you may want to hire a private adjuster who is based outside of Florida to help you with your claim” and make sure everything is in order, he said.

Finally, be on the lookout for insurance and contractor scams, he said. There’s nothing like tragedy to bring out swindlers and charlatans eager to prey on the exhausted and unwary.