Financial advisers in Harvey's path ride out the Texas storm

Firms put contingency plans in place and RIAs hunker down as the water keeps rising in Houston

Aug 28, 2017 @ 2:10 pm

By Jeff Benjamin

Financial advisers and their clients are weathering Tropical Storm Harvey in classic Texas style: by hunkering down and helping each other as much as possible.

"A lot of people are checking in to see how other people are doing, but nobody is worried about their money right now," said Tom Samuels, a portfolio manager at Palantir Capital Management in Houston, which manages $100 million in client assets.

Mr. Samuels is monitoring the situation from his second home in Oregon, but all he knows about his Houston office and home is that the roads heading to them "are lakes."

"We've been talking to friends and family all over Houston, and there is flooding in places that have never flooded before," he added.

The storm, which hit the Houston and Galveston metropolitan region on Friday as a Category 4 hurricane, has since been downgraded to a tropical storm that has led to record flooding. According to published reports, at least five people have died as a result of the storm, which dumped up to 30 inches of rain on some areas along the Texas coastline.

A spokeswoman from Fidelity Clearing & Custody Solutions said the custodian began contacting financial advisers in the impacted communities on Thursday of last week as the storm approached.

"We created a contingency plan in order to support any urgent needs from our adviser clients, and we are prepared to assist with any special needs that arise," according to a company statement.

At BNY Mellon's Pershing, chief relationship officer Jim Crowley, said an active outreach effort has been underway.

"While our first concern is for the safety of everyone being impacted by Hurricane Harvey, our clients and colleagues have been implementing their business continuity plans for weather-related events to minimize the disruption of services to their clients," he said.

Edward Jones posted an emergency alert on its website, as well as messages on its corporate Facebook and Twitter accounts, providing a special 1-800 client relations number for anyone whose offices were impacted by Harvey.

A spokeswoman for Wells Fargo Advisors, Emily Acquisto, said most of the Houston-area branches are closed due to the storm. "Advisers will be working from home where possible," she said.

Jonathan Swanburg, an investment adviser at Tri-Star Advisors in Houston, on Monday morning was in the middle of relocating his family for the third time in as many days.

Mr. Swanburg, who oversees $150 million in client assets, said both his office in downtown Houston and his home in the southwest area of Sugarland have been impacted by the rising waters.

"We were told to evacuate our home, and we haven't been able to get to our office since Friday," he said.

Mr. Swanburg initially relocated his family to his father-in-law's house, but on Monday morning was told that part of the southwest metro area would also have to be evacuated.

The larger group is now moving to higher ground within the southwest region, but Mr. Swanburg said his newest concern is the water potentially rising above the banks of the nearby Brazos River.

Mr. Swanburg said his firm sent out an email to clients on Friday announcing office closures and new contact details, and then sent out another email Monday morning asking if anyone needed any kind of help.

"We haven't heard from any clients, but we know there are a lot of people who will be directly affected because of recent flooding," he added.

Of the roughly 200 households his firm serves, Mr. Swanburg estimated 70% live in the Houston metro area.

"It's going to be a dicey situation for a while, but as things dry out we'll be staying very busy helping folks," he said.

Scott Bishop, executive vice president of financial planning at STA Wealth Management, is currently "high and dry" in the northeast section of Houston, but that doesn't mean he's resting easy.

"We closed our office down Friday afternoon, and our disaster recovery and continuity plan is working," he said.

The firm, which manages $800 million in client assets, set up a communications phone tree and sent out an email to clients, alerting them to emergency contact information.

STA's homepage has been changed to alert clients of emergency rescue and recovery services.

"We've been using social media to let people know how to get in touch with us, and to share FEMA assistance information," said Mr. Bishop, who has also been monitoring the status of STA's 27 employees.

"People are okay, but they're stuck in their homes," he said. "I've gotten dozens of emails from clients in and out of the area, just checking in to see if we're okay."

Mr. Bishop estimates that about 80% of his firm's more than 500 clients have been affected by the storm.

"In Texas, we're really good at taking care of our own," he said. "We dealt with this with Hurricane Ike in 2008, which had higher winds but not as much rain."

As of Sunday, the rain from Harvey had already surpassed the levels from Ike, and the waters are still rising in some areas.

"My brother and his family already lost their house, so they are with us," Mr. Bishop said. "I have another house that I've offered to employees and friends who need it. And I have a friend who spent the entire day riding through neighborhoods to rescue people."

Meanwhile, Deborah Sopher, owner and president of Strategic Financial Services in Houston is stuck in New Orleans, where she has been since Saturday morning when her flight home from Lima, Peru, was diverted.

Ms. Sopher, who manages $65 million in client assets, said one of her employees lost her home to the storm, but everyone is safe.

Ms. Sopher, who on Monday morning was waiting for a flight to Denver, is not optimistic about the status of her own home that is in a part of the metro area that hasn't flooded in 55 years.

"Right now everyone in my neighborhood is stranded on the second floor," she said. "It's been a harrowing 48 hours, and I have to get out of here because the storm is now on its way to New Orleans."

Reporter Greg Iacurci contributed to this story.

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