If they weren't before, two things have become clear to financial advisers affected by Hurricane Sandy's devastating punch to the East Coast.
To wit: We can hardly work without electricity to run all our gadgets, and more and more of our productivity depends on access to the Internet.
“I fully expect to be out of power for seven to 10 days,” said Thomas J. Duffy, owner and sole practitioner of Jersey Shore Financial Advisors LLC.
He works out of his home office in Oceanport, N.J., and while he suffered only minimal flooding of his first floor, he fears that some of his clients in nearby communities didn't fare as well.
A veteran of numerous storms, Mr. Duffy has a reliable backup generator, but there is one thing he could have done better.
“More fuel,” he said after spending two hours in line refilling his supply.
The storm presents an opportunity to reiterate the need for disaster preparedness and planning.
Although some firms may balk at spending for such a plan — beyond the requirements for a written plan forced on them by regulators or for having seldom-used backup systems — you would be hard-pressed to find anyone admitting to that in the New York-New Jersey-Connecticut area this week.
"NEW WEATHER REALITIES'
One allied professional with whom I spoke was Brian Hamburger, founder of compliance consulting firm MarketCounsel LLC, whose Englewood, N.J., headquarters was smack in the center of Sandy's path.
His firm's business continuity plan stood up to the test, with only a few kinks, and the office was ready for business Wednesday.
“I'll leave it to guys much smarter than me to argue why it is happening, but you have to be an idiot to not see that there are new weather realities,” Mr. Hamburger said, adding that two adviser clients whose offices had lost power had taken up temporary residence in the firm's headquarters.
“All of us in this region are facing the potential of a two-week period out of business,” he said.”That would equal 4% of the entire year's productivity — many firms are looking just to break even, the way the economy has been of late.”
In other words, advisers should look at their investment of time and preparation as uptime insurance.
“The most critical thing we did was move our employee alert system over to a Twitter feed earlier this year; throughout the storm, we were able to communicate with the team exactly what was going on,” Mr. Hamburger said.
MarketCounsel was one of many firms that had built into its plan the potential use of alternate locations and hotel rooms for staff.
That is the strategy used by Lenox Advisors Inc., a registered investment adviser headquartered in New York that manages $1.5 billion in assets.
Flooded, impassable roads and a completely stalled mass transit system made it impractical, if not dangerous, for employees to reach their operational headquarters in the city.
The firm's core technology is accessible over the Internet, and a process guide tells employees which responsibilities and processes should be passed to the firm's other five locations.
“I shifted to our Stamford, Conn., office, where it is business as usual. You have got to have redundancy,” said Greg Large, a managing partner at Lenox.
“We are still tallying and some of our staffers are facing serious challenges,” he said.
David Edwards, president of Heron Financial Group LLC, said his business continuity planning really got rolling thanks to a previous, non-weather-related catastrophe.
“The lesson of 9/11 for investment advisers, and service firms in general, is: What could you do to take care of clients if you could not reach your physical place of business whether that is terrorism, adverse weather or an earthquake in California?” he said.
“We transitioned all firm-critical systems, including e-mail, trading and client reporting, to the cloud over the last few years,” Mr. Edwards said.
Like Lenox, his Manhattan office was inaccessible — though high and dry — and in the days immediately after the storm, all his firm's personnel worked from home on laptops.
WHAT TO LOOK FOR
It has never been easier to have redundant Internet connectivity, especially if you are a sole practitioner or run a small firm.
It has become critical to have better-than-Wi-Fi access to the Internet, using various types of Mi-Fi gadgets that can give computing devices 3G and 4G network connectivity.
Specifically, these are available through some smartphones, dedicated USB devices for laptops or the built-in capabilities of new Android tablets and iPads.
Remember, connectivity is key.
Two sources for this column relied on a cable provider for their firm's primary Internet connection. Those services failed or were sporadic during the storm and after.
MarketCounsel had a backup connection in its offices using Clear.com that provides a 4G cellular data connection that, despite being a bit slow when shared, is working.
Other alternatives for backup can include Wide Area Network and satellite connectivity.
Related Disaster Planning and Preparedness Coverage
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Storm warning: What advisers need to get done before Irene strikes
No time like the present for advisers to prepare for disaster
