Read Part 1 of “Do Your Clients See The Value In A Financial Plan? They Should – And They Are Willing To Pay For It.”

No Geographic Constraints For The Virtual Advisor

Advisor-client conversations can happen virtually, which we see as the new industry standard for meetings going forward. Gone are the days when an advisor’s firm needed an out-of-state, brick-and-mortar location to be able to service out-of-state clients.

In 2015, Michael Kitces wrote a blog on this trend, “The Emergence Of The ‘Location-Independent’ Virtual Financial Advisor.” Kitces wrote at the time that “the rise of technology is creating a new service model for financial planning – the ‘virtual’ advisor,’ who uses web-based tools and technology to serve clients, regardless of where the client (or advisor) happens to be.”

Virtual Advisors Have Greater Proportion Of Clients, More HNW Clients

Fast forward to today, and the “virtual advisor” is another digital transformation trend that has been greatly accelerated amid the pandemic. It has provided opportunities for advisors to engage clients more frequently through virtual planning engagements. And clients of virtual advisors are showing great interest in financial planning.

According to our survey, 64 percent of virtually based advisors have clients with a financial plan, compared to 57 percent of geographically based advisors. Our survey also found that 14 percent of virtually based advisors have High-Net-Worth (HNW) clients, compared to seven percent of geographically based advisors.

Advisors now realize, thanks to technology solutions, they are not limited to working with clients based on location. This enables them to expand their reach in new and exciting ways. It also means they don’t have to lose clients who relocate.

The virtual advisor is clearly here to stay – wherever “here” may be. During our recent webinar on the survey results and what they mean for the industry, we asked attendees the following question in a nonscientific poll: “To what extent will you continue engaging clients virtually post-pandemic?” Not one respondent answered, “100 percent in person,” it came in at zero percent.

On the other hand, three percent of attendees said they will remain “100 percent virtual” going forward, while 40 percent said they plan to continue doing business on a “Mostly virtual” basis, and nine percent said they will opt for “Mostly in person.” (47 percent chose “Not sure; whatever each client prefers.” At MoneyGuide, we expect this to be virtual as well.)

The Bottom Line

The ongoing growth of demand for financial planning coupled with the shift to mostly virtual operations is opening up an unlimited amount of new opportunities for advisors.

Clients are looking for peace of mind about their future in addition to portfolio strategies. Geographic constraints are becoming less and less relevant in the industry. Advisors who leverage these trends will continue to lead the entire industry forward, while also helping more clients to plan for a better financial future.

Here are some simple ways that advisors can digitally engage clients and begin a conversation around financial planning.

  • Tip one: Remove barriers of entry. Give clients an easy place to start exploring their financial landscapes. Digital planning tools give advisors an opportunity to reduce the perceived stress of a formal planning process and make a quality financial plan more accessible and easier to understand.
  • Tip two: Prepare for virtual meetings. Test your virtual meeting tools (GotoMeeting, Zoom, Webex, Google Hangouts, etc.) and pull up the client’s plan before the meeting starts. Remember to limit distractions by switching to full-screen mode (F11) to hide bookmarks, menu icons, etc. and turn off email notifications.
  • Tip three: Set your clients up with Client Portal access so they can engage with their plans on demand. This planning software feature allows the advisor to communicate virtually in a simple and user-friendly format. When clients have access to their plan it helps to reinforce the “big picture,” as opposed to being hyper-focused on daily fluctuations.

The information, analysis and opinions expressed herein are for informational purposes only and do not necessarily reflect the views of Envestnet. These views reflect the judgment of the author as of the date of writing and are subject to change at any time without notice. Nothing contained in this piece is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type.

Written by Joe Miller

Joe returns to the Envestnet | MoneyGuide family as Chief Operating Officer. A Certified Financial Planner, Joe brings to this role a distinctive set of financial planning industry experience, along with his passion for financial planning as exhibited during his entire career. In this role, Joe is responsible for supporting the operations of Envestnet MoneyGuide and the services delivered to clients. He works alongside the President and Chief Growth Officer to advance the organization’s vision, strategic priorities and growth goals.

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