As a Registered Investment Advisor, Cornerstone Management is required by the Securities and Exchange Commission to maintain a business continuity plan to be implemented in the event of a range of potential significant business disruptions (SBDs). We have updated our plan to further incorporate the unique impact of the Covid-19 outbreak and the current response initiatives being promoted by the U.S. government, the WHO, the CDC and other global health organizations such as the Johns Hopkins University Center for Health Security, the Imperial College of London Department of Infectious Disease Epidemiology, and the National Institute of Allergy and Infectious Diseases at the National Institutes of Health. The situation surrounding the novel coronavirus is fluid and has changed significantly in the United States over the past two weeks. Further change should be expected, and Cornerstone will continue to monitor the situation and respond appropriately.
Cornerstone’s management team is treating the global Covid-19 outbreak as an SBD. We are concerned about the impact of the virus on our employees, our clients, and our nation. We will adjust our response as necessary to fully address any additional threat that the virus may pose, while striving to offer the same level of service and engagement to our clients that has been our hallmark since our inception.
We have designed our technological infrastructure to provide maximum safety and security to our clients and our team members, and that technology is further supported by our primary custodial partners Charles Schwab and Bank of New York/Pershing. Given the size of our team and our flexible work schedule, it is our intention to continue operations from our primary office location in Atlanta. Should the need arise, we are structured to allow our entire team to work remotely or from back-up locations. Our team is currently utilizing flex-time and social distancing to ensure our health and to facilitate uninterrupted service to our clients. We will continue to evaluate our systems and have team members test our remote work structures.
Questions & Answers:
What impact will this outbreak have on my investments?
- The equity markets have already been negatively impacted by the spread of the virus, concerns about impact on corporate earnings, and ultimately the growing probability of recession. However, Cornerstone’s strategic allocation structure, diversification, and rebalancing program are all designed to help investors weather unexpected negative shocks. The current impact on global economic output is difficult to calculate but may prove to be significant. However, the impact from other global outbreaks of disease or significant natural disasters such as hurricanes and terrorist attacks has often been overstated at the outset of such events. The scale and speed of this particular situation is unique and is likely due in part to the prevalence of social media, the increased accessibility to high-speed internet, and 24-hour global media visibility. The speed of information can move in both directions, and improvement in the global economic environment may also move faster than expected. Regardless, we will continue to monitor and adjust portfolios as necessary to take advantage of any opportunities that arise while at the same time protecting long-term capital to the greatest extent possible. We believe that investing is a long-term endeavor, and each customized portfolio implementation is designed to provide liquidity during times of duress so as to protect future growth opportunities.
What will communication look like during the Covid-19 outbreak?
- Cornerstone will continue to be available to our clients. We have tested our remote working options and our communication solutions. Our web portals are accessible to clients for secure communication, and of course we will continue to utilize all other forms of communication. We are ramping up our production of written material to help inform our clients of ongoing developments in the markets and the economy, and we will be hosting various calls to provide additional support during these volatile times.
If the quarantine or limited travel ban extends, can Cornerstone continue to operate?
- Cornerstone’s team is equipped to work remotely or in a multi-shift fashion to continue to support our clients in the event that quarantine guidelines change or extend. Additionally, given the changes in global communication, most meetings over the next few weeks will take place virtually. In our view, nothing takes the place of face-to-face interaction, but modern virtual meeting alternatives are a close substitute that we believe will suffice for the immediate future.
At Cornerstone, our mission is to “Preserve, grow and distribute the assets entrusted to the Christian non-profit community and its constituents through enhanced organizational and individual stewardship.” In volatile times such as these, that mission takes on renewed significance. We are engaged with you, our clients, as co-fiduciaries and take that responsibility seriously. Our corporate verse, Luke 16:11, and our corporate values support our calling, and we will continue to provide the highest level of investment and administrative service possible throughout this difficult period.