How to Run an RIA and Work as a Virtual Advisor

4 min read
July 21, 2016

The following is an excerpt from XY Planning Network's ebook, The Virtual Advisor. Want your own copy? Download it for free here!

Ask yourself this question: what does your ideal life look like? There’s no wrong answer. It’s about what’s important to you. Your answer should reflect what you value.

But no matter what your answer is, it’s likely that you need a good deal of flexibility and freedom to live that life of your dreams. And that’s what the case for working virtually – even as a financial advisor – is all about. Working virtually allows you to build a business that supports your great life.

Why a Virtual Business Provides Access to Your Great Life

Traditional business models require us to build a life around our business. When you work full-time from a physical location and meet every single person you do business with in person, you lock yourself into a very set schedule and routine. There’s little room for freedom and flexibility (even though you’re an entrepreneur and you call the shots).

You must be in an office all day. You can only work with clients in your area. You can’t travel freely for extended periods of time. You don’t have the ability to move effortlessly. Changing locations means uprooting your entire business.

This probably doesn’t support your great life.

With new technology and an evolving acceptance of digital methods of communication and working together, virtual work opens many doors for you. You now have the opportunity to engage in the pieces of life that leave you satisfied, happy, and fulfilled, all while running a successful business.

What is it that you want to do on a day to day basis? It could be the ability to travel whenever and wherever. Maybe it’s maximizing the time you spend with your children and your family, and being there for all their milestone moments. Perhaps you want to volunteer and help others near and far.

Define what you want your life to look like. And then understand that whatever your answer looks like, your business can -- and should -- support that.

Working with Your Ideal Client

As a financial advisor who understands the importance of putting your clients’ needs and interests ahead of your own, this opening argument for working virtually may sound a little self-serving. But there’s no reason you can’t live your great life with a flexible business that allows you great personal freedom – while also better serving the clients your business is designed to help.

Think about this. When you only work in person, you limit yourself to a local area, neighborhood, community, town, or city. You can only serve people in your immediate location. People will only drive so far to come see you.

Working virtually opens you up to working with anyone, anywhere. There are no more barriers created by the fact that you and your ideal client just happen to live a few hours (or many hours) away from each other. That provides a lot of freedom not only for you, but for your clients, too.

Being a virtual advisor means your clients can be anywhere in the world, too. They’re no longer limited to working with someone based solely on the fact that the two parties are present in the same town. Your clients get to choose the absolute best financial planner for them, based on what that professional can provide, and not based on where everyone happens to be on a map.

Or your clients can still live in the same town as you do. They can still live within an hour or so of your office. And these are still clients you can work virtually with, because it provides them with a more convenient option.

When you force clients to meet in person 100% of the time – especially if you specialize in younger clients – you’re asking them to make a big time commitment. They have to take off work. They may need to get (and pay for) a babysitter. Then they need to actually get to your office, and deal with traffic and parking.

A one hour meeting becomes a three hour ordeal for those who work, have families, or need to attend to other other responsibilities. Hosting virtual meetings can save time and stress, and can provide a better client experience.

Your practice should be designed to care for your ideal client, no matter what. So, no, virtual advisors are not self-serving and virtual planning is not solely for the benefit of the provider. This is a win-win situation for everyone in the highly digital, mobile, technology-focused, forward-thinking world we all live in today.

Narrowing Your Niche and Why It’s a Good Thing

Let’s talk for a moment about a phrase used above: your ideal client. You do need to understand who this person is, and the specific set of characteristics that make them who they are – and that make them ideal for your business.

It’s important to target your audience and focus on a specific segment because you can’t be all things to all people.

When you clearly define your niche market, you can be the go-to expert for that segment. By becoming the expert in a niche market, you become the most knowledgeable professional in that area – and that makes you highly referable to new clients. Narrowing your niche makes it easier to define what you do and who you do it for.

Reaching Gen X and Gen Y as a Virtual Advisor

The ultimate case for working virtually may lie with the fact that younger generations are comfortable with technology and find it accessible, sensible, and convenient in their everyday lives.

Gen Y is defined as individuals with birth years ranging from the early 1980s to the early 2000s. This is the largest generation in US history; consisting of 93 million Americans, Generation Y eclipses the the Baby Boomers by about 20 million people.

If you add in Gen X (or those aged between 34 and 50), which have adopted technology en masse as well -- you’re looking at nearly 50% of the US population. And these groups are not only comfortable with the kind of technology that allows for virtual planning -- they demand it.

According to the global information and measurement firm The Nielsen Company, “when asked what makes their generation unique, Millennials ranked ‘Technology Use’ first.”

“Given their fluency and comfort with technology, Millennials have more of a positive view of how technology is affecting their lives than any other generation. More than 74 percent feel that new technology makes their lives easier, and 54 percent feel new technology helps them be closer to their friends and family.”

If you want to reach one of the largest generations in history, a group eventually expected to hold $30 trillion in assets, it’s important that you maintain an open mind when it comes to technology -- and working virtually.

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