Can an adviser thrive in a virtual office?

A young planner is shutting down his offices, saying his clients prefer working in a virtual world

Mar 19, 2014 @ 1:11 pm

By Joyce Hanson

+ Zoom

Alan Moore is a young adviser with an unusual plan for the future — it involves shutting down his year-old office in Bozeman, Mont., this week.

Come May, a month after he turns 27, he will then take the plunge and permanently shut down the other office he opened in Milwaukee 18 months ago, when he founded Serenity Financial Consulting. In seven weeks, he and his wife will move to Bozeman, where Mr. Moore can pursue his dream of running a virtual office out of his new home.

When he started his firm in August 2012, he took a “traditional approach.”

“I opened a shop in Milwaukee and got a coffeemaker and everything,” Mr. Moore said. “Now, I've got my clients used to meeting with me virtually.

“I've told them, 'I'll be in Bozeman, so let's meet by Skype,'” he said. “I haven't lost any clients.”

While running his two offices, Mr. Moore paid about $1,400 a month combined for rent, utilities, Internet, phone and insurance.

To be sure, not many financial advisers have the courage or desire to shut down a bricks-and-mortar space in order to inhabit an all-virtual world. But many young advisers such as Mr. Moore are convinced that it's a business model that can work. As younger generations of investors embrace technology, they say, advisory clients actually prefer a business relationship that largely can be conducted online.

Mr. Moore, who has a master's degree in family financial planning from the University of Georgia, professes a passion for providing individualized financial advice to clients, regardless of their net worth, income or investible assets. He is the current chairman of the National Association of Personal Financial Advisors' Genesis group, which seeks to foster professional growth for advisers age 33 and younger through networking.

Serenity Financial Consulting has approximately 15 retainer clients, and the firm has worked with about 40 clients on a fee-only basis in its first year and a half. He estimates annual gross revenue at just over $100,000.

Mr. Moore has had virtual meetings with prospective clients in four states, and his client base resides in a total of eight states.

“I have a handful of clients I've never met and some I've never even seen,” he said. “One is a sales rep who phones me on the road, and someday I'll actually meet her in Denver if I'm at a conference or have a long layover.”

Sophia Bera, 30, founder of the virtual financial planning firm Gen Y Planning in May 2013, is in an information-sharing group with Mr. Moore. Like him, she views herself as an entrepreneur who uses good financial management to keep her expenses low.

Her 20 regular clients are young investors who pay a monthly fee of between $99 and $199.

“These people are used to paying monthly cell phone fees or gym memberships, so why not a monthly financial planning fee?” said Ms. Bera, who credits low-cost online tools with helping her sustain her virtual business model.

Not surprisingly, Mr. Moore is a big fan of online technology, and he's always on the lookout for new tools. He has written an e-guide, “25 technologies under $25 per month that will transform your practice today.”

His five favorites are ScheduleOnce, for booking meetings electronically; EchoSign, for electronic signatures; RescueTime, for tracking how time is spent; Meldium, for sharing access to websites without sharing passwords; and Talkwalker, for alerts.

Inexpensive and efficient technological innovations provide Mr. Moore plenty of support for running his business in a virtual world, and what he can't do himself can be outsourced, he said.

Craig Pfeiffer, founder and chief executive of Advisors Ahead, which places students and graduates in structured internships, said he likes Mr. Moore's business model and website because they help young people focus on financial literacy and personal financial responsibility with a disciplined and structured process.

“He's a pioneer,” Mr. Pfeiffer said. “There are others, but he seems to be energetic about it. For the right market, it's a good model.”

But Mr. Pfeiffer, a former Morgan Stanley Smith Barney executive vice president, said there is vast space between the goal posts of a high-touch office in the physical world and an all-virtual world.

“If you're going to be exclusively virtual, which I think is viable, this model limits you to an all-virtual client base,” he said. “For a certain client population, I suspect there is a correlation between sophistication and level of assets and the level of physical engagement.”

While Mr. Moore admitted he has received some negative feedback from other advisers about his decision to shut down his office, he said all his clients “get it.” His clients' positive response is due partly to the trend of “geo-arbitrage,” he said, which lets them pay less for services that might cost more close to where they live.

“For clients in California, I'm a steal of a deal,” Mr. Moore said. “My pricing is lower because where I live is cheaper.”

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