Should Your Financial Advisor Be Local?

Personal Finance

There’s so much to consider when choosing a financial advisor: what kind of fees they charge, the services they provide, and whether you get along with them and trust them, to start. Should their location be in that list?

The short answer is no. Technically, you can hire a financial advisor who lives anywhere in the U.S. – on the other coast, or just a block away. That’s especially true now that everything that needs to be done in financial planning can be done using email, Skype, a plethora of dedicated financial planning software, and electronic signature technology.

The long answer is that whether you can or want to work with a remote advisor depends on what you’re looking for in the relationship. Most advisors prefer to meet with clients at least once face-to-face, if not more.

So here’s what to ask yourself when deciding on whether to look locally for an advisor, or expand your search to other states:

Do you have plenty of choices in your area?

If you live in a large metropolitan area, you should easily be able to find a financial advisor near you who fits your needs. But if you live in a remote area, consider expanding your search – financial planning is highly personal, and you don’t want to hire a financial advisor just because he or she is the only CERTIFIED FINANCIAL PLANNER™ available in town.

Will you ever be in the same city?

Many financial advisors are perfectly comfortable and even excel at advising from a distance, but they still like to do a yearly face-to-face check-in. However, these trips cost time and money, which could be reflected in the fees you pay. So consider whether you’ll end up in the same city at least once a year, either because they happen to be traveling to you, or you’re traveling to their city.

If you live in an out-of-the-way area, you could search for an advisor who works with other clients near you, lives in a city that you travel to on business frequently, or who lives in a city near your family that you visit once a year. Then you could wrap your yearly check-in into a trip you’re already making.

What services will you need?

Some financial advisory services are much more hands on and personal than others. If you just need someone to oversee and periodically rebalance your conservative, long-term portfolio, that’s pretty impersonal  and doesn’t require a lot of long discussions.

But if you’re looking for someone to overhaul your finances from top to bottom, manage your budget, and help you make big financial decisions, that advisor will want to get to know you very well. And you might want someone who you can meet face-to-face whenever you feel to need to discuss more fraught or complex issues.

How comfortable are you with technology?

You might see nothing wrong with never meeting a trusted associate in person, especially if you happen to be under 30. After all, you have Skype for meetings, email that serves as excellent record keeping, and can navigate Dropbox with ease. With all of these efficient tools at your fingertips, traveling to meet your planner can seem inefficient, or even a waste of time.

But for others, trust is built upon that first handshake and face-to-face meeting. Plus, you might want an advisor that speaks  your language of “sign-and-mail-back”. Whatever makes you more comfortable is best. If it’s the latter, go with someone local.

The Bottom Line

As you can see, it’s all up to you and your needs. But it’s great that we live in a time where you do have the option to choose a financial advisor who is two time zones a way if you wish.