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Financial Planning > Tax Planning

To Help Clients in Fire Zones, Advisors Rely on Mix of Tools

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Advisors working in areas prone to fire — such as Northern and Southern California — are helping clients as wildfires rage on and high winds are forecast to return, as they often do each fall. But these financial professionals also work with clients year-round to prepare for evacuation and worse.

“Today, we are keeping tabs on things and try to be proactive when things [like the fires] are happening,” said Kimberly Guha, a UBS advisor based near San Diego with family members in other parts of the state who have evacuated. 

“We remind clients of things we’ve done and what they should be thinking about,” added the CFP and CPA. “People panic, so I encourage them to think ahead of time, so they’re not caught off gaurd.”

Like other UBS advisors, Guha’s clients have completed a “LifeBook” for emergencies, which is a paper report that includes important documents, like contact information for insurance agents, as well as details on treasured items like heirlooms. 

“We suggest clients keep a digital copy, too,” the advisor said. “And when they’re evacuated for a fire or other event, we urge them to keep receipts for hotels, meals and more for insurance reimbursement.”

The LifeBook and some key document should be stored in a fireproof safe or other places where they are secure. “And, we recommend services that can store copies online. Insurance policies are fine for this, but not things with a date of birth or Social Security number; that information can be riskier to store digitally.”

Guha works with clients to discuss their insurance coverage on a regular basis, so large out-of-pocket costs can be avoided. “You can do best the best financial plan, but if you are under-covered for insurance, it won’t matter how your portfolio is doing,” she said. 

Virtual Lifeline

For other advisors, new technology and operational tools are making a big difference for clients. 

Kristen Hafner of Financial Moxie, which is affiliated with Cambridge Investment Research, in Westlake Village says one of her clients recently evacuated for the fourth time. “She lives alone … and calls me first. But she has her car packed and is ready to go,” Hafner said. 

“We do a lot for clients and can operate on a fully virtual bases, so if I get evacuated I can communicate with them. I have an assistant out of state, in Iowa, and we’ve communicated regularly during the power outages,” she explained. “Calls can be made to clients in [affected] areas to make sure they’re safe.”

One client fell during the evacuation process. “It was a challenge. But we keep in touch with family,” the CFP added. “We just try to … serve as a central point of contact.” 

After a fire or other disaster is over, Hafner has another role: “The clients often have anxiety over whether they should stay or move. I help them with these choices.”

‘Safety First’

For Wanda Delgado of Insight Financial Advisors, which also works with Cambridge, a key job of the advisor is to remind them of what they need to do and what’s better not to do.

“Folks in some areas that are burning have never had a home burn before and are under the mistaken belief that they can save their house,” said the Santa Ana-based certified financial planner. “I spoke to one woman recently and said that if she’s told to evacuate, she should do so.”

“So many clients have homes near brush and are in areas where there’s only one way in and out,” Delgado explained. “I tell them they just need a few documents, like their most recent passport. It’s all about safety first.”

It’s also important to know if there are paper or digital copies of estate plans and tax returns at the offices of attorneys and accountants, in addition to those with Delgado. “And have some cash and clothes ready before you need to leave,” she added. 

Such tips are pretty much the same for all clients, “whether they have $5 million to $25 million in assets,” according to advisor Erick Arndt of Virtue Wealth Management in Santa Clarita. 

“Clients need to have cash for emergencies. And that’s why they have emergency savings — for when they have to go to hotel,” explained Arndt, whose practice is affiliated with LPL Financial. 

Without enough cash, the clients might have to wait some time for insurance to cover their out-of-pocket costs. “It creates havoc. We have a plan in place and are able to deal with it. They don’t have to worry,” he said.

Arndt and other advisors know that the current emergencies are serious. “Last Thursday, it was scary,” he said. “About 20 miles away, there was a huge fire. It was like a giant tornado, and … the sky was black. It’s as bad as I’ve ever seen it.” 

Fears of Fraud

Trading assets and withdrawing funds in such situations can be tricky, points out Daxs Stadjuhar, a managing partner with the Financial Services Network of Sacramento, which has about 250 advisors in California and works with LPL. 

“Over the past few years, we’ve been working to educate [clients] about the fact that all requests for withdrawals have to be verified by phone,” Stadjuhar said. “It’s part of our discussions with them about fraud, which we’ve had over the past weekend.”

Clients get automatic notices of how to reach the group or LPL when advisors have to evacuate or their power is down. They are also being reminded to watch out for fraudulent requests for money.

“They might get a message that someone’s house has burned down. ‘Please wire me $50,000!’ There’s lots of hacking, and this is a rampant time for fraud,” Stadjuhar said.  

Christopher Mercado, a managing partner with the Financial Services Network and its chief investment strategist, says he’s glad there are virtual services to “immediately back up displaced advisors.”

The past few years in Northern California have been intense, according to the Danville-based executive: “It’s really been tough the last three years, … and can be so scary when the fires appear without warning.”

While technology is making it easier for advisors to manage client affairs during a crisis, it’s also made fraud more prevalent. “There are a lot of lives we’re looking after,” Mercado said.  

Ginger Szala contributed to this report.

— Check out California Fires Have Advisors Scrambling to Aid Clients on ThinkAdvisor.


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