Scott Bishop, an advisor and partner at STA Wealth Management, remembers when Hurricane Ike swept through the Houston area in 2008, so when Hurricane Harvey made landfall on Friday evening, it was not his first rodeo. He and his practice were prepared.
STA has been sending messages out via social media, email and chat lines to make sure clients are safe and that they know how to reach their advisors and the firm’s custodians. They’re also tweeting out emergency contact information and other resources. Bishop was lucky in that his office, in the Houston city-center area, and his home, north of Houston, were not flooded. He even has a second home—also “high and dry”—where friends and family can stay if needed. His brother, however, was not so lucky.
“There are thousands in Houston, even including my brother, who had their house washed away pretty much,” Bishop said.
His brother is now safe in Bishop’s house, but his furniture was lost.
Bishop’s firm has a disaster-recovery plan, so they have remote access to all their systems via the cloud.
“I could open up a shop in Austin and have full computer access to everything, or something like that, if I needed to,” he said. “I’m not worried about access; I’m more worried about people’s safety right now.”
That said, STA is coordinating clients’ needs as they come in. One client, for example, needed $5,000 through a Fidelity account. There wasn’t enough in money markets to make that cash request, so Bishop’s assistant got him on the phone with Fidelity, and he told them what to sell to make the cash available.
Byron Ellis, managing director at United Capital in The Woodlands, Texas, about 20 miles north of Houston, said he hasn’t heard a peep from clients.
“There has been absolute silence,” he said. “No one’s worrying, no clients are panicking, nobody’s asking questions about their investments.”
Ellis has been texting and emailing clients, asking them how they’re doing, “but there’s really no business talk that’s going on right now.
But Ellis considers himself fairly lucky, as his house hasn’t filled up with water, and his office, which got a little water damage, is currently being cleaned.
“Literally there are snakes that come out of the water up here. It’s kind of creepy, but you look on the news, and there’s nothing that’s happening to me that’s nearly as bad as most of these people that are getting plucked out of an apartment complex by the National Guard and being rescued in a boat or on the roofs,” Ellis said.
Ellis’s systems are also cloud-based, something the firm didn’t have just four years ago.
“With everything being on the cloud, everybody can pop on and do every bit of work right here in our homes,” Ellis said. “If we end up not being able to work tomorrow, instead of saying to clients, ‘We can’t meet—let’s reschedule,’ we’ll just offer to do virtual meetings.”
Both advisors believe there are lessons to be learned from the storm. A big takeaway: Get flood insurance.
“You need to plan for this stuff in advance,” Bishop said. “Make sure you have the right insurance; ask your insurance agent how it works. If you’re not 100 percent sure, don’t listen to what your friends say about what you can and cannot get. Get professional help."
His brother, who rents his house, was told by a friend that renters can’t get flood insurance because they don’t own the house.
“That’s just bad information,” Bishop added. “They cannot get flood insurance to protect the house—that’s the homeowners’ responsibility—but you can get flood content coverage. So he never asked me, and now he doesn’t have it. And all his furniture is gone.”
Ellis had a similar experience with a neighbor, who was moving furniture to their top floors to avoid flood damage because he didn’t have flood insurance.
“That’s the cheapest insurance that you can get in most cases,” he said.