Advisers shutter offices to brace for Hurricane Matthew's punch

Southeastern firms likely will get to test those enhanced continuity plans the SEC is pushing

Oct 6, 2016 @ 1:47 pm

By Liz Skinner

As Hurricane Matthew forces evacuations in Florida, Georgia and South Carolina, financial advisers in the Southeast are preparing to test out continuity plans the Securities and Exchange Commission has been pressing them to enhance in recent months.

The worst of the Category 4 storm is set to hit eastern Florida late Thursday or early Friday morning. Hurricane Matthew already has killed 114 people, most in Haiti.

“The palm trees are already bending and the winds are blowing,” said financial adviser Austin Frye on Thursday afternoon.

Mr. Frye closed his Aventura, Fla., firm at 3 p.m. on Wednesday and expects to remain closed for days. Frye Financial Center, located in one of the first U.S. cities the hurricane is likely to hit, sent clients a note Wednesday letting them know about the closing and providing them with a phone number of custodian LPL Financial if they needed help with accounts.

(More: Advisers look back on 10th anniversary of Hurricane Katrina )

Those in the 12-person office left yesterday with a company phone tree they'll use to make sure everyone gets through the storm and its aftermath, Mr. Frye said.


A gathering of advisers in Florida was cut short Thursday. The women advisers' conference Raymond James Financial was hosting in Orlando was called off after getting through its first day of sessions and speakers Wednesday.

Carolyn McClanahan, the director of financial planning at Life Planning Partners in Jacksonville, Fla., said her firm closed early Thursday and will remain shuttered Friday when the brunt of the storm is due to hit her town, in the northeastern part of the state.

“The crew is busy implementing our disaster plan,” she said.

The SEC proposed a rule in June that would require registered investment advisers to have written business continuity plans, as well as details for how they would transition client accounts, should a disruption occur. Most of these emergency plans already are required, but the SEC is seeking to further ensure an advisory firm's clients are not harmed if there is a major interruption to the regular operations of the business.


Securities regulators began looking at the need for such a rule after some financial advisory firms had trouble bouncing back after Hurricane Sandy in 2013.

Hurricane Matthew is the first storm of this size to hit Florida since Hurricane Wilma landed in October 2015. It caused more than $20 billion in damage in the U.S.

For perspective on the possible impact of the storm, Walt Disney World in Orlando is closing early Thursday evening, only the fourth time in its 45-year history.

Advisers further north also were preparing for Hurricane Matthew's wrath, with many firms already closed in Savannah, Ga., and Charleston, S.C.

“We're about a quarter mile from the Charleston Harbor, so any kind of surge and we'll have water around our toes,” said Bill Prewitt, founder of Charleston Financial Advisors.

In anticipating of such events, the firm moved all of its systems and data into the cloud.

Mr. Prewitt said he hopes to send an email tomorrow after the storm hits to test the firm's communications ability in an emergency and include the results as part of his compliance testing.


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