Reliable technology is a must in a virtual practice, said Braxton. An annual vendor stack audit helps her see how her technology is being used, how much it costs, whether it’s still relevant and cost effective, and if there are better ways to perform tasks.
Luis Rosa, a CFP and IRS enrolled agent, describes becoming a virtual advisor as “a happy accident.”
When he and his wife moved to Las Vegas several years ago for her to attend a university program, a handful of his wealth planning clients and 110 tax clients stuck with him. Later, more wealth planning clients trickled in from his former East Coast practice. He discovered that clients don’t mind the distance and that he enjoys working virtually.
“I’m no longer bound by zipcode,” said Rosa, founder of Build A Better Financial Future LLC, a virtual firm with clients in nine states. His clients are typically GenXers with $150,000 in investible assets plus 401(k) plan assets.
Rosa, a fee-only advisor, offers a variety of services and posts fees on his website. He thinks virtual practices with monthly fees resonate well with younger clients who need help budgeting, paying off student debt, buying a house, planning for a wedding or baby, and understanding 401(k) plans.
He calls clients on their birthdays, connects with them on Facebook to stay abreast of changes in their lives and sends them his newsletter twice a month. He recently began hosting the podcast “On My Way to Wealth.” He thinks contributing to mainstream media has given him more credibility with clients.
Rosa, a member of virtual study group with other FPA NexGen advisors, suggests that virtual advisors find other advisors with whom they can share best practices.
Even Jim Holtzman, a wealth advisor and shareholder at Legend Wealth Advisors, a Pittsburgh-headquartered RIA firm, estimates 25% to 35% of his clients are now virtual-only. Some moved out of state for retirement or for jobs. Others found Legend through the firm’s webcasts or just find it more convenient to meet virtually.
“Sometimes we laugh because the client around the corner is the one we never see,” he said.