The Securities and Exchange Commission has issued a risk alert urging advisors to update contingency plans so they can get back to work more quickly following a natural disaster such as Hurricane Sandy.

The alert follows an SEC Office of Compliance Inspections and Examinations survey of 40 advisors prompted by the aftermath of Hurricane Sandy. The survey examined the region hit and assessed the storm's impact on the financial services industry and the clients it serves. More importantly, it reviewed how well the disaster plans actually worked. Hurricane Sandy hit the greater New York area in October 2012, causing vast damage and closed U.S. equity and option markets for two days. The survey was conducted under the direction of the SEC's National Examiner Program

For today's advisors, disaster plans are a must, legally required by SEC rules. Things like back-up power and offsite server back-ups are the norm. However, by examining how these systems actually worked during a large-scale natural disaster, the SEC took the opportunity to determine their effectiveness.