Talk about grace under fire.
As blazes continue to rage through a number of areas in Northern and Southern California on Monday, financial advisors are working to address their clients’ issues while tackling both professional and personal challenges of their own.
The Financial Services Network, a large advisor group affiliated with LPL Financial and based in Sacramento, says about five of its offices in the greater Sonoma area are closed and about 12 other locations are being evacuated or affected in other ways by the fires.
“We support about 250 advisors and staff and have been on the phone all day with them” to support their operations, said Daxs Stadjuhar, managing partner and chief compliance officer.
Meanwhile, “We put out a message to our clients … telling them they can use our office for evacuation from the Getty Fire” in Los Angeles, said Danilo Kawasaki of Gerber Kawasaki in Santa Monica, which is affiliated with LPL.
“We have hundreds of clients affected” by the Getty Fire, added Kawasaki, who resides in Pacific Palisades and has been told to leave that area (along with his family).
Adam Spiegelman, CFP, of Spiegelman Wealth in Lafayette — some 20 miles east of San Francisco — says he was not evacuated yesterday, though those living and working nearby were.
His office, an affiliate of Commonwealth Financial, had no power on Monday. “The office is closed, and all staff are working remotely. We had a dress rehearsal for this a few weeks ago when the power was taken down as a preventive measure [by PG&E].”
Some of his clients live and work in areas to the north, like Napa and Sonoma. “There’s lots of smoke [from the Kincade Fire], and people are wearing masks and making sure their pets do not go outdoors.”
With the spate of fires last fall (including the Camp Fire and Mendocino Complex Fire), “We started talking about clients’ home coverage and fire insurance,” Spiegelman said.
His firm doesn’t sell such policies, but he and others “talked about coverage that can bring homes back up to code, with sprinklers and fire alarms and such, if they did have to rebuild.”
The advisor also says he has been giving clients a list of what to take with them in the event of an emergency evacuation. “One client in Berkeley posted it in their kitchen … next to the fire extinguisher.”
The frequent dangers from California fires today, said Spiegelman, make the risk of such danger “the new normal.”
He’s tried to learn from tragedies like having a friend lose two homes in Santa Rosa: “I talked at length [with her] about insurance coverage and that spurred me to reach out to my clients starting about two years ago.”
This topic is now “part of my conversations with clients, as I want to make sure they are absolutely up to speed on everything.”
Many advisors also say they are working with clients to have documents saved to the cloud and kept in fireproof safes. This includes wills, trusts, health care directives and the like.
“We have not had to consider this in the past” but are doing so currently, Spiegelman said.
It’s especially important to help clients who may be less inclined to back up documents digitally or keep copies in the cloud. “Many of my clients … like paper,” he explained, so he works to make sure they have proper document storage.
Rob Cucchiaro of Summit Wealth & Retirement Partners in Danville says some of his staff have been and are likely to be evacuated from different areas of the East Bay, such as Crockett.
“A few [clients] folks reached out and asked what they should be thinking about in terms of their [possessions] and documents,” Cucchiaro said.
With winds gusting at 40-90 miles per hour on Sunday, the advisor said he and his wife talked about putting whatever they could in their car.
“Trees everywhere were falling, some on power lines. So much was happening at once,” he explained, noting that a helicopter was above his office Monday morning while he spoke to this reporter.
“I give [clients] a list for what to put into a fireproof safe,” Cucchiara said.
James Carabini, an independent advisor with Ameriprise Financial in Sonoma, said that he has clients make a video of their homes and belongings, which he stores digitally for them.
“I recommend making videotapes,” so clients can review many of their possessions and details of their home if it burns down, he said. “I’ve had two clients lose their homes — one in 2017 and one in the Paradise Fire last year. I feel it’s an important thing to do.”
Longer Term Issues
Advisors in Northern and Southern California say that the situation of yearly fires and other risks is sobering.
“I have a client with an estate in Napa who’s watching the fires like a hawk,” said Vance Barse of Your Dedicated Fiduciary in San Diego.
“He’s fully insured. But some homeowners sadly will not be moving forward. Cancellations of policies are a real concern … given that fires … mean larger claims in larger areas,” said the advisor, who is affiliated with Commonwealth.
This has prompted Barse and other advisors to include insurance and risk management in their annual client reviews. “Fires and earthquakes are top concerns,” he explained. The advisor says he works with clients to “explore different insurance-based solutions to alleviate the costs of replacement.”
A growing number of clients who live in fire zones find that “their insurance company is not renewing [policies], premiums are skyrocketing, and they can’t find coverage,” Kawasaki said.
Houses near or in Malibu that are worth several million dollars can’t be insured, for instance. “That becomes a big deal, … so we network with agencies who specialize in high-risk areas,” he explained.
Barse and other advisors also emphasize the basics. Clients need to have water, gas, electronic documents on thumb drives, and other “must items” ready for a possible evacuation — “so they can just grab these things and their pets and go,” he said.
Advisor David Mizrahi of First Point Financial Management in Calabasas nearly lost his own home last year in the Malibu Fire. “Everyone calls me about these issues,” said the Kestra Private Wealth Services affiliate.
“I say just take what is near and dear to you — along with passports, insurance papers and the like,” explained Mizrahi. “You don’t have to be a hero. Just get [the few things] you can’t live without and be safe.”
Ginger Szala contributed to this report.
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