This year, while the Covid-19 pandemic caused millions of Americans to lose their jobs and others risked their health to stay employed, financial advisors have fared relatively well. Wealth managers quickly adapted to stay-at-home mandates and their business models have proved resilient.
As a result, there’s been an enlightenment of sorts. Wealth managers (or at least the ones who finally downloaded Zoom) have realized they can largely do their job from anywhere and the technology-savvy are rising to the top. Executives at Hightower, a $61.6 billion RIA in Chicago, haven't been to the office since March and the company is still humming along, acquiring other businesses.
“2020 has been the year of adaptation for the financial services industry. The technology enabling remote work has been available for years, and advisory firms were able to quickly transition to work from home during these uncertain times,” Brian McLaughlin, the chief executive of Redtail Technology, a client relationship management software company, wrote in a recent report.
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Prior to the pandemic, working from home was uncommon in wealth management. In 2019, 66.7% of wealth managers “never or rarely worked from home,” according to a report by Redtail that surveyed more than 1,750 wealth management employees in the U.S.
“While the industry has historically been an in-person business, I think we all discovered that clients can still be serviced effectively, regardless of where their advisor is located.”
Working from home — or from one’s mountain cabin or Hampton’s cottage — has perks, too. “Business casual” attire has taken on a whole new meaning. Workers are saving time commuting to and from the office, freeing up time to work more or do other things. Some employees say they are more efficient working at home.
Still, advisors aren’t planning on the wholesale change of scenery to be forever.
In the future, advisors expect they will work outside their home as many as four days per week. It was a complete reversal in 2020 — 64.7% believe they will work from home at least one day a week in the future — but in the long run, home is not where most expect to work.
The reason is that working from home is challenging for advisors: 43.5% experienced social isolation or disconnect from co-workers and 41.7% dealt with family distractions. The majority of respondents were prepared for the shift to work remotely but 35.2% cited a lack of office supplies as another challenge.
How many days they actually return to the office will be interesting — employers might have a hard time arguing against a greater percentage of work-from-home days.
"A vast majority of respondents (74.3%) did not experience an interruption of their revenue stream by working from home, and nearly 5% of respondents actually grew their revenue."
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.