The dire news out of Wall Street yesterday detailing the financial woes of investment giants Lehman Brothers and Merrill Lynch, as well as the world's largest insurer, AIG, had local residents on the phone, wondering about the security of their investments and insurance policies.

In a span of only hours, investment bank Lehman Brothers filed for bankruptcy protection, Merrill Lynch avoided a similar fate by agreeing to be absorbed by Bank of America Corp., and American International Group Inc. desperately sought billions of dollars to stay afloat.

The news had a negative impact on Wall Street, where the Dow Jones industrial average lost more than 500 points, or about 4 percent. The precipitous drop in stock indexes prompted calls to financial planners and investment managers throughout the day.

Kalei Cadinha-Pua'a, president of Cadinha & Co. LLC, said her financial management firm received a steady flow of calls from clients concerned about their investments.

"The main concern from investors right now is how safe are their assets," Cadinha-Pua'a said. "We're fortunate with our clients in that the types of companies that we invest in are very well-financed. One of the criteria that we look for as far as investing is little debt. For this reason, when you have a situation like this, the person or the company that has cash is able to take advantage of others who don't."

Cadinha-Pua'a also is advising clients that now may be a good time to invest in companies that are in need of more capital.

"We're actually spending a lot of time talking to clients, saying this is a great buying opportunity for certain companies," she said. "But I wouldn't recommend touching the financial sector at this point in time."

Geal Talbert, president of Legacy Group Wealth Management in Kane'ohe, said she also received several calls from people asking her thoughts on the turmoil.

"The general question is 'Are we OK? Are we going to be OK?' " Talbert said. "As long as you weren't only invested in financials (stocks of financial service companies), you are going to be OK."

Some people wanted to know if the market would recover, to which Talbert responded that for the most part, the broader market will. She said that for most people, the decline represents a temporary setback because they invest for the long term.

For others, the drop presents a bigger problem if they are withdrawing from their IRA.

At AIG Hawaii, consumers also have been inquiring about their insurance policies following news that the New York-based AIG was also in financial trouble. Yesterday, New York Gov. David Paterson allowed AIG to use $20 billion in assets held by its subsidiaries to help the firm stay in business.

Robin Campaniano, president and chief executive of AIG in Hawai'i, said so far local operations have not been affected. AIG is the state's largest property and casualty insurer, and the third-largest auto insurer.

"We're telling (callers) that the insurance part of AIG is very sound, we're doing OK, and that we really haven't had much of a problem, and their policies are certainly safe and secure, whether or not you've got a business need or an individual personal insurance need," Campaniano said.