What Are Virtual Financial Advisors?

As society becomes more dependent on the internet, more people are conducting their daily activities online. The internet has provided a convenient way for people to bank, shop and even work from the comforts of their own home. Some financial advisors are taking advantage of this trend and starting to offer their services through a fee-based virtual financial advising service.

Virtual financial advisors offer their services to clients on the internet. They provide investment management services, income tax preparation and estate planning. A financial advisor must hold a Series 65 license to provide advice to the public. Virtual advisors utilize video streaming technology and document viewers to hold meetings with clients from anywhere in the world. This type of advising has become popular with technologically savvy customers who are looking for flexibility in an advisor. Virtual financial advisors advertise their services throughout the internet by using a variety of means. Popular methods include financial advice blogs, podcasts, YouTube, Facebook Inc. (NASDAQ: FB) and Twitter Inc. (NYSE: TWTR). These methods allow financial advisors to attract clients by letting the clients get to know their advising style, and even glean some of their advice, before deciding to commit.

The major advantages of virtual financial advising are the flexibility and convenience that the service offers. With traditional financial advising, clients and advisors must coordinate a meeting time, with one or both parties having to travel a set distance. If a client utilizes a virtual financial advisor, no travel is required and a meeting can be conducted through videoconferencing at any time and at any location during the day. This is attractive to clients who frequently travel, and not just businessmen and women. Clients who are looking forward to retirement often spend time visiting family and spend seasons in various climates. Virtual financial advising offers these clients the comfort in knowing that they can always reach their advisor and receive investment management advice when they want it.

An important skill for financial advisors is the ability to read their client. They must be able to sense when a client is uncomfortable or even lying. The ability to read body language is key. Virtual financial advising does not easily lend itself to this skill. When a client is on a video chat, typically only his face is seen, not his shaking foot or the fidgeting of his hands. The discussion of money is always sensitive, and topics such as estate planning can be specifically difficult. When an advisor senses discomfort, it is his cue to change the subject or even approach the topic from a different angle. It is extremely difficult to do this over a video chat when these subtleties are not easily seen. The other disadvantage of virtual financial advising is the possibility of a poor connection. For clients who travel, having a clear connection is not always a guarantee. It is frustrating to have a conversation over video chat when the screen freezes or words are skipped.

Virtual financial advising is not for everyone, but as technology advances, more financial advisors are turning to the internet for their clients. If you are comfortable with technology and need the flexibility and convenience that this provides, then virtual financial advising might be for you. It is important for clients to feel a connection with their financial advisor; after all, your money is in the advisor's hands. Sometimes this connection can only be made in person, which is not something that virtual financial advising can offer. It is imperative for you to seek a financial advisor who fits your specific needs and is someone with whom you can be comfortable and honest sharing your personal information.