Can Advisors Help Disaster Clients Before it Happens

When a destructive event strikes, financial advisors and insurance agents have a responsibility to help their clients navigate the immediate and long-term financial impacts.

Here's a breakdown of their responsibilities and the steps they should take:

Responsibility of Financial Advisors

1. Emergency Response and Communication: Advisors should proactively reach out to clients, particularly those in affected areas, offering immediate support and advice. They should provide information on accessing emergency funds, insurance claims, and any disaster relief programs available at the federal, state, or local level (like FEMA).
2. Review and Adjust Financial Plans: The client’s financial situation may change dramatically due to property damage, job loss, or medical expenses. The advisor should review their financial plan to account for these shifts and adjust strategies to keep clients on track for long-term goals. Clients may need to liquidate assets or take out loans, so advisors should provide counsel on the most cost-effective and tax-efficient ways to do so.
3. Insurance Guidance: Advisors can act as liaisons between clients and insurance agents, ensuring clients understand their policies, what is covered, and how to make claims. They should encourage clients to review and potentially increase their coverage before the next storm season.

Impact on Immediate and Extended Family

1. Financial Stress: Loss of property or income impacts the family’s financial stability, increasing stress on both immediate and extended family members. If family members are reliant on one another, the financial shock may ripple through generations, leading to dependency or the need for financial assistance.
2. Displacement and Relocation: Severe damage may displace families, leading to temporary or permanent relocation. Financial advisors should help clients with strategies for handling the costs of relocation, temporary housing, or even home rebuilding.
3. Emotional and Physical Strain: The trauma of going through a natural disaster can affect clients’ health, which may in turn lead to medical expenses. Family members may also need to step in to provide care or financial support, further stretching their resources.

Action Steps for Financial Advisors and Insurance Agents

1. Pre-Disaster Planning: Ensure that clients have an emergency fund and that their insurance policies are comprehensive. Agents should also encourage policy reviews to ensure there is sufficient coverage for storms, floods, and wind damage. Work with clients to create contingency plans that detail what steps to take if their property is damaged or they are displaced.
2. Post-Disaster Relief: Assist clients with submitting insurance claims and navigating the claims process, ensuring they receive adequate compensation. Guide clients on how to access any government aid or private grants that could help cover losses not covered by insurance.
3. Long-Term Recovery Strategy: Help clients re-establish their financial stability by restructuring debt, revisiting investment strategies, or exploring government programs like tax relief or deferred loan payments. Advisors can also recommend estate planning or asset protection strategies to prevent future disasters from further destabilizing their clients’ financial situations.

Financial advisors and insurance agents serve as essential partners in helping their clients recover from disasters like Hurricane Milton, not only in the short term but also by fostering resilience for the future.

They'll need your support, guidance, solutions and leadership more than ever, get some tips to respond to Milton Storm for your clients.