How to Select the Best Virtual Financial Advisor

When you think of a financial advisor, you probably think of an advisor with a brick and mortar office in your city. You can jump in your car and go visit the advisor as often as you want. But what about a virtual financial advisor?

Financial advisors are not like CPAs and attorneys who charge an hourly rate for meetings. Advisors are usually paid with asset-based fees (percent of assets) or fixed fees. Only a small percentage charge an hourly rate and that is usually for their planning expertise, time and services. So, the meetings aren’t free, but there is no incremental expense for meeting with your advisor as often as you might like.

Selecting a New Advisor

Stop and ask yourself, how often do you meet with your advisor? Once a year, twice a year, four times a year? It is probably infrequent at best and when you have an urgent need to communicate, you pick up the telephone or send an email.

This probably describes how you communicate with your current advisor. But what if you were to terminate that advisor and select a replacement? Do you require face-to-face contact with your new advisor? Or are you comfortable selecting a virtual financial advisor who communicates over the telephone, email and Skype?

Face-to-Face Meetings

Are you seeking the best financial advisor or the closest financial advisor? If you want the best advisor, you should not limit your choices to advisors you can visit via a car ride – or have them visit you.

You should look at all of your choices, brick and mortar and virtual, and select the one with the best qualifications, business practices and services. The more choices you have, the higher the probability you will select the best advisor for the right reasons.

There is also another issue when you limit your choices to brick and mortar advisors. Face-to-face contact maximizes the impact of their sales skills. This increases your risk that you will select the advisor with the best personality and sales skills.

This is contrary to your actual goal of selecting a competent, ethical professional who can help you achieve your financial goals.

The Virtual Financial Advisor

A virtual financial advisor provides the same services as the brick and mortar advisor. The only meaningful difference is how they communicate. Whereas the brick and mortar advisor communicates face-to-face during the sales process and service meetings, the virtual advisor communicates using telephone, email and Skype.

No more jumping in cars and driving to meetings. Or meeting in your home if you are retired and you don’t want to drive to the advisor’s office.

Your Two-Step Selection Process

Are there any meaningful differences when you select a virtual advisor versus a brick and mortar advisor? There is only one. You do not meet face-to-face with the virtual advisor.

If you are like most investors, you conduct at least two interviews when you select a financial advisor. The first interview is on the telephone to make sure advisors meet your requirements. You don’t want to waste time interviewing the wrong advisors. The second, in-depth interview can be face-to-face, telephone or Skype if you are interviewing a virtual advisor.

There is no difference in the first screening telephone call. The major difference occurs in the second interview when you obtain more information from brick and mortar and virtual advisors.

Your Due Diligence

The more information you have about advisors, the higher the probability you will select the best professionals for the right reasons. The risk of making a mistake goes up exponentially when you have inadequate information – you don’t know what you don’t know.

Control Your Interviews

When you meet with advisors face-to-face, there is a good chance the advisors will use their sales skills to control the interview. You may also have noticed, if this is not the first time you have selected an advisor, that most of the information you receive is verbal, so you have no record of what was said to you.

It is easier to control interviews with virtual advisors because you are not impacted as much by their sales skills and tactics.

In fact, to increase your odds of selecting the best advisor for the right reasons, you should provide all of the advisors with an agenda and require them to adhere to it. This also makes it easier to compare their responses.

The Internet

The Internet is your best friend when you select a financial advisor. It gives you access to substantial amounts of public data that you can use to verify the information that is provided to you by both types of advisors – brick and mortar and virtual.

For example, you should go to and enter the advisor’s name or CRD number to review his or her record of compliance. Pay particular attention to complaints and how they were resolved. Was there a financial settlement, and if there was, did the advisor participate in the reimbursement to the investor?

Next, visit the advisor’s website. Most of the information may be about the firm, but that is OK. In most cases, advisors adhere to the policies and business practices of the firm. You may find the advisor’s biography on the firm’s website. If you find information about the professional, be sure to retain it in case there is a future dispute.

Third, and this may be the most important part of your research, Google search the advisor’s name, and while you are at it, also enter the name of the firm. Since your main purpose is confirming what has been told to you, enter additional keywords that will uncover potential problems (for example: Complaint, fine, lawsuit, termination, bankruptcy, foreclosure).

Be a little cautious when you conduct your research. Advisors may have common names. You should use an advisor’s CRD number if you have it. These numbers are unique identifiers that make sure you are looking at the right data for the right advisor.

What Are the Top 5 Benefits?

There are 5 primary benefits that impact you when you include virtual advisors in your search for a new advisor.

  • You will have more choices when you select an advisor.
  • You are not limited to advisors you can reach by car.
  • You can select the best advisor, not the closest advisor.
  • You are not limited to information that is controlled by advisors.
  • You will make a better selection decision when you rely on factual information versus sales pitches.

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