Does your financial advisor need to be local?

Technology has made it easier to get advice remotely, but are there benefits to meeting an advisor in-person?

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Myles Ma

Myles Ma

Senior Reporter

Myles Ma is a senior reporter at Policygenius, where he covers insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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Luis Rosa has met with clients remotely for years, even before the pandemic. When the certified financial planner and member of the Zoe Financial planning network moved from New York to the West Coast, the clients of his firm, Build a Better Financial Future, followed him virtually.

But even now, clients who live close to Rosa’s home in Pasadena, California, still opt to meet over Zoom because of the pandemic. Financial advisors across the country have made the same transition. So do you still need your advisor to be local? Here are the pros and cons of an all-digital relationship with your financial advisor.

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Pro: Scheduling is easier

Alva A. Fuller, a VP wealth advisor for Farther, a wealth advisory firm, says many of her clients find remote scheduling simpler.

“They can book follow-up meetings seamlessly and do not have to plan for commute time,” she says. 

Virtual meetings are especially convenient for couples, who can meet with Rosa together even if one is at work and one is at home. Virtual meetings also don’t require parents to hire a babysitter so they can attend.

Con: Technology barriers

Not everyone is comfortable using the technology required to make a virtual relationship with a financial advisor work. Others might not have access to it at all.

“If you have a poor internet connection, you might not be able to see the video or share the screen,” Rosa says.

You’ll need to familiarize yourself with virtual scheduling tools and learn how to share documents digitally with your advisor. While many people have become more familiar with these tools during the pandemic, some people simply feel more secure going to an office and handing their sensitive financial documents to someone in person.

“Each client will need to weigh the tradeoffs in convenience, cost, and accessibility with the ease of building trust in a financial advisor in person,” Fuller says.

Pro: You can find a specialized advisor

Keeping your search to advisors who are local might limit you from working with someone who has special expertise with your financial situation. For example, if you want to retire in a foreign country, you might want to seek an advisor who is familiar with that country and its tax laws. 

Financial advisors are increasingly specialized, Rosa says. For example, they may focus on families with children with disabilities or people with stock options or workers in specific fields. 

That expertise should take precedence, Fuller says.

“I encourage clients to consider an advisor’s expertise, credentials, and whether or not they feel the advisor is really a fit, rather than prioritizing finding someone local,” she says.

Con: You'll miss local expertise

Particularly if you plan to rely on your financial advisor to handle your taxes, they should have some knowledge of your state and local tax laws. For Rosa, an enrolled agent who is licensed by the IRS to prepare taxes, that local knowledge is important. But, he says, “an advisor can familiarize themselves with a state’s laws without living there.”

Ultimately, location is just one of many factors to weigh.

“Before hiring a financial advisor, you’ll want to meet with them to understand their level of expertise, their credentials, their style, the costs of working with them, and whether or not you feel they are the right fit for you,” Fuller says. “The same factors apply in choosing an advisor whether you are looking to work with them remotely or in person.”

Image: Luis Alvarez / Getty

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Author

Senior Reporter

Myles Ma

Senior Reporter

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Myles Ma is a senior reporter at Policygenius, where he covers insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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