Why Virtual Advisors are The New Normal

7 min read
September 21, 2021

Why virtual advisors are the new normal


The wealth management industry will undergo monumental shifts in the next ten years. Consumers today increasingly use Skype or FaceTime to discuss personal matters and connect with friends and family globally. Factors such as evolving new customer segments and rapid technological advancements are why virtual financial advisors are the new normal.

Large global wealth management firms are taking notice. More focus is being placed on virtual advice centers that attempt to deliver a high level of personal service from high-caliber advisors. This is in stark contrast to more traditional call centers with less personalized advice.

What Does it Mean to be a Virtual Financial Advisor?

A virtual financial advisor is someone who has either very limited or no face-to-face meetings with prospects and clients. Rather, the advisor utilizes video conferencing platforms and robust financial technology in their meetings with prospects and clients.

It does not necessarily mean that the advisor does not have a physical office. Virtual Financial Advisors can have their own physical office space or utilize virtual workspaces such as WeWork.

Less commuting and face-to-face meetings also mean fewer carbon emissions and paper waste. Virtual financial advisors help save you time, money and even help save the environment.


Does Working With a Virtual Financial Advisor Save You Time?

Picture this…It’s 5:30 pm and you just got off of work. You and your spouse have a 6 pm meeting scheduled at your financial advisor’s office 15 miles away. You got stuck in a meeting that ran 10 minutes over.

You’re stuck in traffic, frantically trying to call your spouse because you are running 15 minutes late. The sweat builds up around your collar as you try to navigate through traffic to get there on time. You finally get there to find your spouse waiting patiently in the reception area.

You join her in the lobby, but you don’t really want to be there. All you really want is to be home in comfortable clothes spending some meaningful time with your family.

With a more personalized “Netflix-type” approach, meeting with a virtual advisor is a much more seamless process. They can share your financial plan and other online portals to better explain financial strategies and concepts to you through virtual conferencing software. You can also share your screen if you need help logging into your 401k portal or have a question about a financial document. And of course, you will save time by cutting down on commuting and sitting in traffic.

Does Working Virtually Save You Money?

The fees that financial advisors charge should be commensurate with the services provided. Does your advisor only provide investment management? Or do you work with a comprehensive fee-only financial planner that also provides comprehensive financial planning advice? As an example, a prospective retiree will need advice above and beyond investments because retirement planning is complicated. They have other problems they need solutions to:

  • What age can I retire?
  • How much can we spend monthly without outliving our assets?
  • What’s the best Social Security Strategy?
  • How do unforseen health events impact our plan?
  • What’s the best investment strategy for us?
  • How do we reduce taxes in retirement?

So the level of service and value provided is different amongst financial advisors. It’s important to understand your biggest needs to ensure you get the right answers to your questions. And that’s where a virtual financial advisor can really add a ton of value.

Does A Virtual Financial Advisor Provide Better Advice?

As consumers increasingly turn to web search engines for their shopping needs, more options continue to become available. Search engines like Google are constantly trying to improve results for consumer web searches, and the financial planning profession is no different.

Number of Households That Prefer a Virtual Financial Advisor

Gone are the days when you Googled “financial advisor near me” and picked a firm from the first page of search results. There are too many options, and in most major metro cities, there can be hundreds or thousands of financial advisors that will be eager to work with you. This is not an optimal way to find an advisor because you are casting too wide of a net.


If you are looking for unbiased advice to solve your specific problems, the 3 most important criteria in selecting an advisor are:

  1. Are they fee-only? This means their fees are directly paid by clients and not from third parties where conflicts of interest could arise.
  2. Are they experienced and credible? You may be looking for an advisor that is a CFP® because you need more financial planning help. A minimum level of experience could also be a priority for you.
  3. What is their area of expertise? You wouldn’t go to an opthamologist if you had back pain and the same is true in selecting the right advisor.

I can say from experience that most consumers do not ask the third question, which is just as important as the first two. You want the best advice for your needs, so you need to find a financial partner that is familiar with your financial situation.

The global economy and the ever-changing U.S. Tax Code make it too difficult for advisors to excel at every single area of financial planning, so most advisors are generalists.

The good news is that virtual financial advisors are making it easier than ever for people to find an optimal financial partner. If you are open to a virtual relationship, your Google search results will yield you a greater number of advisors that SPECIALIZE in solving your problems.

Casting a wider, more intentional net allows you to not only catch more fish – but the fish you really want to catch!

Is Working With a Virtual Financial Advisor Safe?

Nearly every American has an account with a large public financial institution. Whether it’s your bank, credit card company, or 401k provider, our sensitive personal information is out there. And when it comes to our finances, safety and security are of the utmost importance.

The good news is that most databases that contain this type of information have 256-bit encryption. This encryption supports the largest bit size and is practically unbreakable by brute force based on current computing power, making it the strongest encryption standard. Nearly all financial technology software contains 256-bit encryption.

Percentage of People Comfortable Working with a Virtual Financial Advisor by Age

The other aspect of security is a physical breach of your confidential information. Most virtual financial advisors save your financial documentation in digital format, rarely keeping hard copies of your financial documentation laying around. This significantly reduces the likelihood that your information falls into the wrong hands.

Regardless of whether your financial advisor is virtual, you need them to act with diligence and integrity when it comes to your financial information. One thing you can do is run a FINRA background check on the advisor for any red flags. FINRA is a not-for-profit organization working under the supervision of the SEC. They actively engage with and provide essential tools for investors, member firms, and policymakers.

How Do I Find a Virtual Financial Advisor?

Performing a Google search of “Virtual Financial Advisor” will probably yield you more results than you care to get. We recommend adding a specialty or expertise that you are looking for in your advisor. Here are some common specialty keywords that could help you narrow down your search:

  • Millenial
  • Generation XY
  • Retirement
  • Business Planning
  • College Planning
  • Tax Planning
  • Federal Employee (FERS)
  • State Employee (PERS)
  • Stock Option
  • Real Estate

Don’t forget to add the keywords, “CFP, Certified Financial Planner, Fee-only” or other descriptive words. The goal is to continue to refine your search to produce a better list of qualified candidates. If you are looking for retirement planning help, then your Google search should look something like this…

Certified Financial Planner + Retirement Planning + Virtual Financial Advisor

Another way to find an advisor is through financial advisor trade and non-profit organizations. Most of these organizations are advocates for more transparency and higher standards for financial advisors.

This helps to ensure that advisors are always acting in good faith, always putting their client’s interests first. The Certified Financial Planner Board of Standards regulates the prestigious CFP® designation. They have a great database to find a financial planner. The National Association of Personal Financial Advisors (NAPFA) also has a great search tool to find an advisor by area of expertise.

Final Thoughts on Virtual Financial Advisors

Through rapid technological advancement, time is increasingly becoming a more valuable commodity. The information age has provided consumers with an abundant amount of options that provide convenience and save time. More consumers are streaming entertainment from home, having restaurants and groceries delivered, and even meeting with their doctors virtually.

Investors now have better access to advisors that specialize in providing solutions to their specific needs. If you live in a smaller city, the value add by working with a virtual financial advisor is even greater.

The convenience and time saved are the icing on the cake. The more time you save from commuting, waiting in a lobby, and finding parking, the more time you have to enjoy the things you love to do.

Lastly, working with a virtual financial advisor lessens our carbon footprint through less driving and unnecessary paper documents.

DannyMichaelAbout the Author
Retirement requires making decisions that will impact you for the rest of your life. So the first thing we do is help clients define for themselves what a fulfilling, deeply satisfying retirement looks like. Once they have complete clarity on what they want, we put our expertise and 20+ years of experience to help them align their personal and financial decisions together. There’s nothing worse than realizing after you retire that your planning was incomplete. Let’s work together to ensure you can enjoy the comfortable, confident retirement you’ve earned.


Did you know XYPN advisors provide virtual services? They can work with clients in any state! View Danny's Find an Advisor profile.