Is the industry ready for “virtual advisors”? Many industries now allow (and perhaps encourage) their employees to work virtually. I’ve seen some benefits, and even pushed for similar flexibility at previous employers. I have also noticed recently that some solo advisors are starting to design their practices around the premise of never meeting a client in person, but still maintaining an ongoing relationship.

It has struck me as odd that a business could seemingly be built on such a sensitive topic as money, and yet a client would never meet the person providing the guidance.

For the purposes of this discussion, I’m referring to advisors who attract clients virtually and never meet them in person, but handle all communication and planning through email, phone and maybe videoconferencing.

This isn’t to be confused with advisors who meet their clients every couple of years because they live far away; nor does it refer to the group of automated online services often referred to as “robo advisors.”

You might expect me to embrace the “virtual advisor” concept. After all, I’ve historically been a booster of new methods for a new generation of advisors.

I have repeatedly espoused the use of technology and outsourcing solutions, and I encourage my advisor peers to use video tools to connect online with clients and prospects.

But a full virtual approach is something else entirely. And for the majority of advisors, I don’t think this business approach will be sustainable over the length of their careers — for several reasons.


The act of touching actually strengthens relationships. It sounds weird when you read that, right? After all, American society does not encourage touching in everyday communication. Yet it can be a powerful communications tool.

Laura Guerrero, a professor at Arizona State University who researches nonverbal and emotional communication, has noted that communication happens faster when touch is involved, and finds there is a deeper sense of connection just due to touch alone.

Even studies of sports teams by professors at the University of Illinois have shown that sports teams are more successful when teammates congratulate each other with physical affection.

But how does this relate to an advisor-client relationship?

Words often do a bad job of letting us express ourselves. When you are able to hug a client who announces she is going to become a grandmother for the first time, or embrace the husband who has just lost his wife, you transfer a sense of caring that cannot be replicated through the spoken or written word. Even a firm handshake can reassure clients that a trusted advisor is walking the path with them.

You may be the smartest advisor in town, but if you can’t relate to people emotionally, you may be losing clients.


There is an increased chance of misinterpretation when an advisor (or, really, anyone) relies on written and nonvisual communication.

If you Google “email miscommunication” you’ll get more than 1.1 million search results. That’s a lot of errors and a lot of annoyed people.

If you’re like me, you may have become irritated at a seemingly short-handed reply to an email, or felt a little confused when someone doesn’t understand your humor during a telephone call.

It’s one thing if that happens when emotional stakes are low and consequences are minor, but if it were to happen during an intense conversation, these miscues could sabotage a professional relationship.

This simply doesn’t happen as often when people meet in person. Body language is critical: You can tell by the twinkle in someone’s eye when she is joking with you, and understand when a short response is a sign that a person has become distracted — not a deliberate personal slight.

Advisors who want to maintain communications online will need to be highly skilled in writing effectively and using language that is hard to misinterpret. Even those who focus on communicating via videoconference will have to be sure they are interpreting visual cues and responses correctly, which may be hard given the limited viewing space.


At a recent client meeting, I asked a client to tell me about her childhood. What happened next was a 20-minute storytelling expedition as she recalled the fun times and tough challenges that brought her to be the person she is today.

During those 20 minutes I hadn’t spoken a word. I shared her laughter when she told me entertaining stories, but also relaxed my body language when she became tense during her hard memories. I’m fairly certain that I wouldn’t have learned these facts about her via email, phone or videoconference. Physical proximity can make both parties more comfortable with each other.

When financial planning occurs in the absence of strong relationships, the client-advisor connection is more tenuous. There are often missed opportunities for clients to feel understood and for advisors to make themselves indispensable.

That’s not to say that all meetings yield these types of conversations. I have other clients who prefer to discuss only the facts of their situation — but when we’re meeting in person, I can see their body language and avoid pushing any further. If we were on the phone, I would be missing key visual cues.

There’s another, related issue. These meetings cover delicate financial subjects, and often — at least early in a relationship — involve a shift from what clients are already doing with their money. And change, as we know, is hard.

Rosabeth Moss Kanter, a Harvard Business School professor who focuses on the subject of change management, has noted that for a person to overcome inertia and make a change, any alternative options being proposed must offer a sense of safety.

I believe that it’s hard to convey that safety in a relationship that exists completely via digital connections; it creates too big a psychological jump for most clients.


That all said, virtual advisors may be able to appeal to a few segments: namely, some Gen Y clients and those who are immersed in a tech-savvy culture. With Gen Y’s upbringing on technology-based solutions, a virtual advisor may not seem out of the norm for some — although some younger clients do prefer the face-to-face interaction of a traditional relationship.

Indeed, it is clear that there are many practitioners who seem to be doing a good job of building this kind of virtual practice.

Even so, I would still question how many clients would find, hire and work with an advisor without meeting them in person beforehand. I may be wrong, but I think personal finance is too delicate a subject to talk about with someone so disconnected.

Even if these virtual advisors succeed at first, what happens when the client goes through an emotional life event? Will words in an email, a voicemail or a video chat be enough? Or will they need the physical presence of a trusted advisor?

Maybe they’ll choose the one they find down the street, not via a computer.

Dave Grant, a Financial Planning columnist, is founder of Finance for Teachers, a planning firm, and Fee Only Consulting, in Cary, Ill. He is also the founder of NAPFA Genesis, a networking group for young, fee-only planners. Follow him on Twitter at @davegrant82.

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