In the aftermath of Hurricane Sandy, many financial advisors are hitting the phones and e-mail to talk clients through some of their financial decisions resulting from the storm.
One advisor I spoke to, Mark Avallone of Potomac Wealth Advisors in Rockville Md., said he told a New Jersey-based client to try to stay calm during this time and not to make any major decisions, financial or otherwise, for a few more days, if not weeks. This particular client was traumatically affected by the storm.
“People living in or near these affected areas are wondering if they should rebuild or not,” Avallone said. “That’s not a decision they have to make 72 hours after the storm. Emotionally they may want to, one way or the other, but they need to be measured and think major decisions through.”
A big factor in the decision to rebuild is how the insurance companies are going to look at these properties two to six years from now. A lot of older homes are going to have to be rebuilt, with a new foundation and structure, he said.
“For me as an advisor, I’m also looking at what these people did for a living and if that job is coming back.”
Some areas sustained many miles of devastation, affecting the livelihood of many people who live there. Some may not even have a job to go back to, Avallone said.
“To the extent that a storm’s going to hit, the best work you do is before the storm.”
As part of clients’ annual reviews, Avallone does an insurance update, and he also goes over basic emergency planning procedures, such as making sure they have a couple thousand dollars cash in their house. Clients should also have the right amount of emergency reserves, so they don’t have to dip into their investment portfolio.
Avallone is also telling older clients to beware of scams, such as people feigning to be insurance adjusters or pretending to represent local charities or others in need.