As environmental risks escalate across the country, storm season is once again on the horizon for much of the U.S. Whether it’s the potential for hurricanes to batter Florida coastlines or for wildfires to sweep through California, extreme weather events are becoming more of a likelihood, and for many who experience them, more costly. For wealth managers and financial advisors, the challenge is clear: in a world where environmental destruction is no longer a rare occurrence, but an expected risk, how do you prepare clients for the possibility of experiencing either a natural or environmental disaster, and appropriately protect their properties and other assets that could be at risk?
Jeffrey Fratarcangeli, founder & CEO of Fratarcangeli Wealth Management, says it’s not about waiting for disaster to strike; it’s about proactively planning for potential worst-case scenarios while establishing financial objectives that account for success in the long run.
“We can do an exceptional day-to-day job earning competitive returns for our clients, but if a client experiences a major event that impacts their expenses, or if the cost of protecting them from the event impedes their long-term objectives, that’s far more disadvantageous than poor market performance,” says Fratarcangeli. “Fratarcangeli Wealth Management oversees billions of dollars in assets across our client portfolio, and we make it our business to understand their financial goals then connect them with the appropriate resources. We leverage our network of experts to provide our clients with the opportunity to have their property and casualty insurance, as well as healthcare insurance, reviewed at the cutting edge to make sure they get a proper price.”
Here are four ways Jeffrey Fratarcangeli says investors can better protect their assets:
Take a 360-degree approach to asset management
Fratarcangeli’s philosophy is clear: managing assets is not just about maximizing investment returns, although it’s a primary daily focus; it’s about understanding and safeguarding the full financial picture.
“You could be making 10-12% average annual returns, but if your insurance costs skyrocket or your estate plan isn’t in place, you can be exposed,” he explains. “It’s like going to the doctor and telling them to focus only on one area of your health, rather than allowing them to look at a 360-degree view. That’s not a complete picture.”
Fratarcangeli Wealth Management’s approach to protecting its clients’ full financial picture involves bringing in specialists across all disciplines – including tax, insurance and estate planning – and revisiting plans regularly to ensure they still align with clients’ objectives. When it comes to estate planning specifically, the team revisits plans with clients on a biannual basis, to make certain that when their legacies go into effect, everything they worked so hard for is executed properly.
When possible, leverage scale in insurance negotiations
Insurance costs aren’t just a problem after a disaster strikes; they’re now a persistent challenge in areas that are historically impacted by natural disasters, like coastal regions and wildfire zones. Fratarcangeli says that Fratarcangeli Wealth Management’s scale and deep network of experts enables their team to add protective measures for clients and get them the best possible terms, coverage and service with the proper insurance agency. The company creates leverage by pooling its clients’ needs when working with multiple large insurance agencies to negotiate better terms and coverage.
“We represent public companies, professional sports teams, high-net-worth individuals and other organizations that have significant insurance needs. We use that scale to negotiate as a unified group,” Fratarcangeli explains. “When an insurance company knows we represent dozens of high-value clients, that can help us ensure proper pricing and coverage that protects clients as much as possible in today’s market.”
By engaging top-tier agencies across property and casualty insurance, as well as healthcare insurance, Fratarcangeli says his team ensures clients get competitive rates even in markets where premiums are rising. Fratarcangeli Wealth Management also absorbs the increased cost and workload of identifying and evaluating potential solutions for clients, to minimize any vulnerabilities.
“Our team is constantly reviewing coverage options to make sure they are priced appropriately and aligned with each client’s risk exposure,” Fratarcangeli adds. “If there’s ever a claim filed, insurance companies know it’s not just one client watching for positive results – it’s our entire organization.”
Consider captive insurance for high-risk scenarios
For clients with significant or unique exposure to environmental risks, Fratarcangeli sometimes recommends exploring captive insurance, a strategy where businesses or individuals essentially create their own insurance company to cover specific risks. This approach enables clients to self-insure by setting aside funds to cover potential losses, giving them further control over their risk management.
“Sometimes the best option is to control the risk directly by creating a captive,” he explains. “That way, if you face a disaster event, you’ve already proactively planned for it instead of relying on an external policy that may not cover everything.”
Fratarcangeli also advises exploring supplemental coverage options for unique, high-risk scenarios.
Advocate for legislative backstops
For some risks, individual or pooled strategies aren’t enough. In those cases, Fratarcangeli emphasizes the importance of state-level action as a crucial tool.
“Sometimes, like what we’ve seen in Florida, the only solution is to work with legislators to implement backstops that help stabilize the market,” he says. “It isn’t necessarily something you can control as an individual, but it is something you can advocate for as part of a collective.”
Legislative backstops can help stabilize insurance markets and ensure coverage remains available for property owners in high-risk areas.
Building financial resilience in a world of environmental risks
Extreme weather events, and the risks they bring, aren’t going away anytime soon. For Fratarcangeli, managing asset protection in the face of environmental threats means building a comprehensive strategy for every client: leveraging scale in insurance negotiations, considering captive solutions, advocating for policy reforms, and maintaining a 360-degree view of each client’s financial life.
“We’re not just here to buy stocks and bonds,” says Fratarcangeli. “We’re here to make sure our clients are protected across their entire financial landscape. That’s the job.”
For more insight from Jeffrey Fratarcangeli, visit www.fratarcangeliwealth.com.
Securities offered through Thurston Springer Financial, a registered Broker-Dealer (Member FINRA & SIPC). Investment advisory services offered through Thurston Springer Advisors, a SEC-Registered Investment Advisor. Insurance products offered through Thurston Springer Financial, an Indiana Insurance Agency.
The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This is not intended to be a client-specific suitability or best interest analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities.
