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Working with Virtual Financial Advisors

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Technology provides investors and those seeking professional financial advice with new options. The growth of robo-advisors has been well documented in the media. For those clients who wish to work remotely with a human advisor, technology has created the ability for financial advisors to work virtually with their clients, opening up new opportunities for both advisors and their clients.

Virtual financial advisors have been gaining steadily in popularity for a number of years. Many clients like the fact that they don’t have to travel to an office to meet with their advisor, that they can communicate with them over a variety of mediums and that it is not an issue to continue working with their advisor should they relocate to another part of the country.

With the world in the midst of the coronavirus pandemic and most of us working from home, the prospect of working virtually with a financial advisor has become even more relevant.

What is a Virtual Financial Advisor?

A virtual financial advisor is one who works with their clients primarily or totally online and via phone. These advisors are location independent; they work with clients from a location of their choosing. Meetings are conducted over the phone and/or with online meeting tools.

Note an advisor can work with clients both in-person and virtually depending upon their client’s needs. An advisor may be located in a large metro area like Chicago and have a physical office presence where they meet with some clients who are local. They may also work virtually with other clients who may have relocated from the Chicago area but who still want to work with this advisor. Additionally, the advisor may offer a virtual relationship for new clients who live elsewhere, but are interested in the unique services and experience of the advisor that meets their individual needs.

Why Consider a Virtual Financial Advisor?

For many looking to work with a financial advisor, considering a virtual advisor makes sense.

First, including a virtual advisor in your search for a financial advisor allows you to consider a wider pool of prospective advisors beyond those right in your own backyard. If you live on the east coast, but find an advisor based in a western state who works virtually and seems like a good fit, it would be easy for the two of you to work together.

If your situation causes you to move around the country, or even outside of the U.S. from time-to-time, a virtual advisor makes even more sense. There is no reason for you to have to find a new advisor each time you relocate. 

For many prospective clients of financial advisors, working virtually fits their lifestyle and they may be more comfortable working with an advisor in this fashion.

Benefits of Working with a Virtual Financial Advisor

There are a number of potential benefits to working with a virtual advisor for many people, including:

  • A wider pool of talented and qualified financial advisors to choose from without regard to geographic restrictions.
  • The ability to work with an advisor from wherever you or they are located.
  • No need to spend the time to travel to an advisor’s office for a meeting. This can add an hour or more to the time you need to allot for a meeting with your advisor. If traveling to the advisor’s office entails dealing with a lot of traffic, this takes more time from your day and adds a degree of stress.
  • The ability to meet with your advisor on a schedule that works for both of you. If you are both OK meeting at 9:00 in the evening, you can both do so from the comfort of your respective locations. Likewise with Saturday morning or any other time that might work for you.

Drawbacks of Working with a Virtual Financial Advisor 

Even with the benefits listed above, there may be drawbacks for some clients in working with a virtual advisor.

  • Clients who are not comfortable with not having an in-person relationship with a professional service provider may not be comfortable with a virtual advisor, or at least with one who is 100% virtual. As much as our world is becoming more virtual each day, some people find it hard to develop a trusting relationship with someone they don’t interact with on an in-person basis.
  • Depending upon your location and that of the advisor, there may be registration issues if the advisor is not SEC registered and has too many clients in your state. This can often be solved if the advisor chooses to register in your state. 

Questions to Ask when Interviewing a Virtual Financial Advisor

In many respects, the questions that you’d ask of a virtual advisor are the same ones that you would ask of an advisor with whom you would work with in person. These include:

  • Have you worked with clients whose circumstances are similar to mine?
  • What services do you offer? This might include financial planning, investment advice, etc.
  • What are your fees and what are they based upon?
  • What is your experience and background as an advisor? What certifications do you hold?

 Questions you might ask a virtual advisor specifically could include:

  • How often would we meet?
  • How would our meetings work? What types of technology is involved?
  • How often should I expect to hear from you beyond our meetings?
  • How do you ensure that information shared between us remains confidential?
  • How will we communicate? Phone? Email? Texting? Other methods?

 At the end of the day whether working with an advisor in-person or virtually, your objective should be the same in hiring him or her. You are looking for a financial professional in whom you have a sense of confidence and who has the professional training and background to help you achieve your financial goals. Expanding your universe of potential advisors to include those who work virtually can offer a greater universe of advisors from which to choose.

Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.

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