"Location, Location, Location", Does It Matter for Advisors?

1/10/2023

 The phrase “location, location, location” is very relevant when discussing real estate, but does it apply to the location of a financial advisor? With Zoom calls and other interactive communication becoming increasingly popular, does it really matter where a financial advisor is located? Can everyone just work from their homes, or do offices still matter?

Spectrem Group recently interviewed investors with $100,000 to $25 million of net worth and found that for more than half of investors (51 percent) it was still important to them that their financial advisor was within driving distance. Twenty-one percent of investors indicated they didn’t care while 28 percent said it didn’t matter if their financial advisor was within driving distance.

It’s interesting to note that feelings regarding whether their advisor is within driving distance vary significantly based upon profession and age.

  • Almost three-quarters of Business Owners (71 percent) think it is important for their financial advisor to be within driving distance. This may be because Business Owners often have complex financial planning issues that may be easier to discuss in a face-to-face meeting. Note that for Senior Corporate Executives, Educators and Professionals, it is still important for more than half of these investors that their financial advisor is within driving distance. In contrast, only 42 percent of investors in the Information Technology business care if their financial advisor is within driving distance. This reflects the comfort level of these individuals in using technology for multiple purposes.
     
  • Age plays a significant role in the importance of advisor location. Surprisingly, less than half of WWII investors care if their advisor is within driving distance. This may be because some of these affluent investors may have retired to a location that is not close to their financial advisors. It’s interesting to note that Gen X investors do not seem to care where their financial advisor is located. Surprisingly, almost three-quarters of Millennials (74 percent) want their advisors to be within driving distance. Perhaps younger investors, who are at the beginning of their financial journeys, want to meet face-to-face with their advisors more frequently than investors who have an established relationship.

Similarly, investors were asked how important location is when hiring a financial advisor. Sixty percent of investors indicated it was important for their financial advisor to be within driving distance if they are forced to hire a new advisor.

While investors are increasingly comfortable discussing issues via telephone or video-conference, a significant number of investors still want to meet with their financial advisor face-to-face on a somewhat regular basis. Unfortunately for those advisors who want to relocate and work remotely, a significant number of clients still want to meet regularly at a location that is not too far away.