There are many things you need to plan when moving around the state, and you often find a new financial advisor. But is it really necessary to switch advisors for distance as digital solutions such as secure video conferencing, digital signatures, and cloud-based financial planning platforms become more common?
Experts say the answer is not necessarily the case.
“Most financial advisors can apply for the licenses they are permitted to operate in multiple states or require to provide services to clients relocating,” said Jake Falcon, CEO and Founder of Falcon Wealth Advisors. “If your advisors are registered with the SEC (not just a state), they can usually work with US clients.”
Key takeout
When your financial advice relationship can go far
This is the route that more and more financial advisors seem to be taking. In 2024, a record number of investment advisors registered with the US Securities and Exchange Commission (SEC) saw a total of 15,870 people. That number has been steadily rising since 2011.
There are many reasons why financial advisors want to be agile enough to establish their roots in a new state. One of the main reasons is customer retention.
“If you have a strong relationship with your advisor, they already know your financial goals, risk tolerance, and long-term plans. That continuity can be difficult to replace,” Falcon said. “Advisors may have specialized knowledge and experience that are not easily seen in new locations, especially if they are moving to a small market.”
“It’s invaluable to be able to work with someone who knows your financial history, goals, obstacles and habits,” said Ryan T. McLin, founder and lead financial advisor of Impact Wealth Group.
“You already have someone you trust, they will respond to you and stay up to date with your needs, desires and wishes.
But just because advisors can work across state boundaries doesn’t mean they shouldn’t necessarily be.
Advantages and disadvantages of long distance advice related
According to Falcon, you should consider removing an advisor if the advisor is not SEC registered and is registered only by state. If that advisor is not registered in your state, they may do so illegally if they do not continue to advise you.
And even if your advisor offers to re-register in your new state, there is a significant risk that comes with it.
“Local advisors may be familiar with the real estate market that may affect state-specific tax laws, estate planning rules, or financial strategies,” Falcon said. “While virtual meetings are convenient, some clients prefer the trust and trust that comes from in-person meetings, especially for major life decisions.”
McLin also says virtual meetings can be great, but major time zone changes are a difficult hurdle to overcome.
“If you’re traveling from Oregon to Virginia, that three-hour time lag might be too cumbersome for a virtual relationship to work,” he says.
Pros and cons of sticking to the same advisor
Strong Points
Maintain a relationship with an advisor who already understands you
Your current advisor may have knowledge and experience that you may not find easily in your new location
Convenience of virtual meetings
Cons
Your current advisor can advise you illegally if you are not registered with your state
A familiarity with local advisors regarding state-specific tax laws, estate planning rules, or real estate markets.
Some clients prefer the trust and trust of face-to-face meetings
Major time zone changes can be difficult in virtual meetings
Conclusion
At the end of the day, the hassle of interstate movements doesn’t necessarily require the headache of finding a new financial advisor. However, the prospect of replacing your current advisor should be at least considered when creating a move plan.
“You don’t have to throw away an advisor just because you’re on the move, but it’s a great opportunity to reassess whether current advisors are best suited to their evolving needs,” Falcon said. “There’s no reason why distance should be a trader if they’re properly licensed and continue to provide value.”
