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Is a Virtual Financial Advisor Right for You?

Virtual financial advisor works with a client remotely

Virtual financial advisors that are based online are emerging as an attractive option for those seeking more affordable, yet tailored financial advice. It’s important to recognize the potential benefits virtual financial advisors offer, grasp the process of working in tandem with one and learn how to select the right advisor for your specific needs.

If you need help creating a financial plan, saving for retirement or managing your investments, consider working with a financial advisor.

What Is a Virtual Financial Advisor?

Virtual financial advisors provide financial counsel and investment management services through online or mobile channels. This kind of financial professional supplies a plethora of services, on par with traditional counterparts, but with the added convenience of operating remotely.

Virtual financial advisors may offer a variety of services, including but not limited to:

  • Investment management
  • Financial planning
  • Retirement planning
  • Tax planning
  • Estate planning
  • Insurance advice

Platforms like Wealthfront, Vanguard Personal Advisor Services and Personal Capital are some of the biggest names in the virtual advisory space. 

Traditional vs. Virtual Financial Advisors

Traditional financial advisors usually engage with clients face-to-face, whereas virtual financial advisors communicate through video calls, over-the-phone and by email. This enables virtual advisors to cater to clients across various locations and time zones, providing greater flexibility to those who cannot attend in-person meetings. In addition, virtual financial advisors are well-positioned to harness technology to deliver quicker responses and more efficient services.

Keep in mind that many advisors can do both: they meet with clients both in-person and virtually. While some platforms exclusively provide their services online, there are plenty of advisors who are open to working with clients either remotely or face-to-face.

Benefits of Working With a Virtual Financial Advisor

Virtual financial advisor introduces herself to someone

There are a number of reasons people may opt to work with a virtual financial advisor over a traditional advisor. Here are some of the benefits of working with an advisor online:

  • Accessibility and convenience: Clients can access virtual advisory services from the comfort of their own homes and according to their own schedules. The accessibility and convenience that virtual advisors offer are especially attractive for busy individuals, people who live in remote areas with limited access to in-person financial advisors or clients with physical disabilities or mobility challenges.
  • Lower fees: Online advisors may charge lower fees than their traditional counterparts, especially if they do not have a physical office.
  • Cutting-edge technology and tools: Virtual financial advisors often employ advanced technologies and tools, such as robo-advisors, data visualization and wealth management platforms. However, keep in mind that traditional advisors may rely on some of the same tools.

What to Expect When Working With a Virtual Financial Advisor

The process by which a virtual advisor creates a financial plan is largely the same as a traditional advisor. First, you’ll submit information about your financial situation and work with the advisor to identify your goals and objectives. The advisor will then analyze your financial situation and develop a plan for achieving your goals. Together, you’ll put that plan into action.

It’s vital for clients to maintain consistent communication with their virtual financial advisors to guarantee that their financial plans stay up-to-date and relevant. As part of the ongoing support they provide, virtual advisors routinely review and adjust your financial plan to meet your evolving financial goals and circumstances.

If you’re hesitant about using virtual communication technologies or programs, consider learning how to use one of the ones your virtual advisor uses. These programs tend to be intuitive so it doesn’t often take long to master them.

How to Find a Virtual Financial Advisor

Virtual financial advisor speaks to his client over a virtual call

The first step in finding a virtual financial advisor is figuring out what exactly you need. Do you want a comprehensive financial plan that encompasses retirement and estate planning? Do you want someone to manage your investment portfolio, or do you want someone who does both? Once you’re clear about what you want, examine financial advisor websites, services, fees and credentials.

Here are some of the more common types of advisors:

  • Certified Financial Planner (CFP): These professionals are well-versed in topics across the financial field. They assess their clients’ full financial portfolio and then provide personalized financial plans. 
  • Chartered Financial Consultant (ChFC): This certification was created as an alternative to the CFP certification. The program offers specialties beyond a CFP’s essentials. A ChFC is who you can work with if you have a niche need, such as financial planning for divorce or small business planning. 
  • Chartered Financial Analyst (CFA): This designation marks an expert in investments and securities. The requirements to earn this designation are among the most rigorous in the industry. CFAs have a full range of analytical tools with which to understand securities.
  • Chartered Investment Counselor (CIC): This certification is no longer offered, but it’s still a viable option for those looking for an advisor. It’s for those working in investment counseling and portfolio management. To be eligible to earn a CIC designation, a candidate must be working at an Investment Adviser Association-member firm and have at least five years’ experience. 

Clients can verify the credentials of virtual financial advisors via online databases or professional associations such as the Certified Financial Planner Board of Standards (CFP Board) and the Financial Planning Association (FPA). The Securities and Exchange Commission’s Investment Advisor Public Disclosure database is another useful tool for researching advisory firms and any legal or regulatory issues they’ve had in the past. 

Who Is a Virtual Financial Advisor Right For?

So who’s best suited to work with a virtual financial advisor? While financial professionals work with a variety of clients, online advisors may be a good fit for the following types of people:

  • Individuals with basic financial needs: Potential clients may include new college graduates and other adults looking to establish a basic budget and start saving for retirement.
  • Tech-savvy clients: Individuals comfortable with managing finances using online platforms and mobile apps.
  • Those looking for a cost-effective alternative to traditional advisors: Clients with small investment portfolios and limited budgets for professional financial advice.
  • Clients who prioritize more private and anonymous interactions: Individuals uncomfortable sharing personal financial information face-to-face may be more comfortable with a virtual advisor, especially one that communicates over the phone or email.

Bottom Line

Virtual financial advisors, who communicate with clients through digital means, offer cost-effective and practical insights. The range of certifications they have is as extensive as it is for in-person advisors. While virtual advisors may cost less than traditional advisors, accessibility and convenience are two of the main benefits of working with an online advisor. 

Tips for Finding a Financial Advisor

Photo credit: © Onyshchuk, © Liang Lim, ©