Advisors debate talking with clients about
what to do if a viral pandemic strikes U.S.

    A wide diversity of opinion exists over what financial planners should be telling clients about any looming pandemic, or whether they should say anything at all. Most medical experts agree the world is ripe for the rapid spread of some virus-based disease, but no one knows whether avian flu, which is currently striking poultry in Asian countries, is the one that is going to start hitting people and spread of around the world.
    "Is it Y2K again, or is it 9/11?" asks John H. LeBlanc, CFP, founder and principal with Back Bay Financial Group Inc. in Boston, Mass. "No one knows, but clients have been asking about it, so we have to start to discuss the possible effect on our clients and on their investments."
Avian flu has killed more than 120 people, mostly in Asia, and has forced agriculture workers to kill millions of poultry in numerous countries to try to stop the spread of the virus. So far, it is being spread almost exclusively among fowl. The possibility that the virus, known as H5N1, could mutate and spread from person to person is what is fueling fear in medical circles around the world. Law enforcement, medical and government officials in almost every country, including the United States, are developing plans for how to react if the avian flu virus, or some other virus, starts to spread.
    Based on past pandemics and on the increased mobility of today's population, it has been estimated that as many as two million people in the United States could die, with many more than that needing hospital care; many businesses might be closed or operating on an emergency basis. Estimates of losses to business worldwide are all over the map, but the Congressional Budget Office has predicted that the U.S. gross domestic product could fall by 5%. In reality, no one can know the potential loss, according to the American Academy of Actuaries, but it would be significant.
    Like other businesses, financial planners should at least be considering how to continue functioning if a large percentage of their workforce becomes ill. "If avian flu spreads to the United States, employers will need to be prepared to deal with reduced workforces, expanded telecommuting, security issues, communications and a host of human resources issues," say Aspen Publishing and Thompson Interactive, which held a recent teleconference for business owners in pandemic plans.
    Although he dismisses the idea of talking to clients about a pandemic, Rick Brooks, CFP with Blankinship & Foster, family wealth advisors in Solana Beach, Calif., said even his firm is planning a disaster drill and has all of its data backed up in a computer off site.
    "We are thinking in terms of wildfires or earthquakes more than a pandemic," Brooks says. "You have to take into consideration what you can manage and what is probable, and other things are much more probable than a pandemic."
    Other advisors disagree, in part because they have had clients raise questions.   
"We did a lot of planning for Y2K for nought, but clients were concerned, as they are now. We are telling them not to panic. We have contingency plans for communicating and for making investment trades, even if we cannot get to work," LeBlanc says. "Some of the reaction will be emotional, rather than factual, but that could create market volatility."
    Diana Davis, CFP, an independent broker dealer in Springfield, Va., feels advisors should be talking to clients in terms of having enough assets on hand to operate if they are sick for 30 days. She has presented seminars to investors and business owners on what to consider.   
    "It is a contingency we need to be prepared for," she says. "What if they have to stay home with sick children for several weeks? Do they have cash on hand? Credit cards may not work if banks are closed. A pandemic is not likely, but it could have a huge impact."
One of Davis's clients, Nancy Moulton of Washington, D.C., says it is a matter of the "sleep test." "What is keeping you up at night? It is something all planners should be talking to clients about," says Moulton. "Do they have enough liquid assets if the banking system is disrupted?"
    Frank Buress of Buress Financial Services in Green Bay, Wis., says, "Some of our clients have asked will they have access to their money and how will we continue to operate. We need to satisfy people that they will be able to reach us. Where money is affected, you should always be concerned."