The question in the headline was recently posted on a website which helps people get answers about basic financial questions. It’s an interesting question. Here is my answer:
The question is a good one and influences both clients and advisors. Because the majority of advisors have limited budgets, they have a tendency to focus their outreach on the city or region where they are located. From the perspective of people seeking financial advice, most assume that they will have greater confidence in advisors they have been able to meet in person.
After decades in the business I can attest that many of my client relationships began with a personal meeting. On the other hand, I have some clients whom I have never met. Today many of my clients live far enough away that personal meetings are not practical. Some have changed jobs and moved to another state, others moved to be nearer to their children. They have all remained clients and almost all have become friends. Regular telephone, e-mail and other forms of electronic communication have made the old-fashioned personal meeting much less necessary or even desirable. Why drive or fly when you can have the same meeting from the comfort of your home or office?
Many of the people we advise are retired and a fair number of them are widows. For many of these we provide the investment management that was once the sole responsibility of the husband. We provide this critical support no matter where the widow lives, even if she moves to be nearer her children. We are frequently asked to mange the estate, and the investments of the children who inherit the estate, often despite the fact the we may never have met.
So the answer is: no; it’s not necessary to have a local financial advisor to have a successful relationship. What it requires is confidence that the financial advisor will work in your best interest, no matter where he is located.