Brokers Take Their Business to the Bahamas, Motorcycle Rallies in Remote Era
A motor boat plowing through waters near the Bahamas. A Harley-Davidson at the Sturgis motorcycle rally in western South Dakota. Or just resting beside your pool.
Many financial advisors had prior to the pandemic seized the increasing opportunities that technological advancements allowed them to serve clients from remote locations. But the Covid-19 shutdown expanded the definition of advisors’ remote offices—and expanded their willingness to share with clients their locales, even when they are exotic, often expensive, and not previously deemed haunts ideal for achieving tasks efficiently.
“Clients don’t care anymore and that’s a huge plus for us advisors. They don’t care if we are wearing a suit either and that is also a huge plus for lifestyle,” said Ross Gerber, the president and founder of Santa Monica, California-based Gerber Kawasaki Wealth & Investment Management, a registered investment advisory firm with more than $2 billion in client assets.
His comments echoed those of the typically buttoned-up wirehouse crowd, including some who have traipsed to far-flung offices.
“I travel a lot. In fact, I’m currently at the Sturgis motorcycle rally but checking emails twice a day. Most communication is email and I have an ‘out of office’ on it. Clients don’t seem to care. If they ask, I tell them,” a veteran Merrill Lynch advisor, who didn’t want to be named, wrote in a text he sent earlier this week.
A few weeks earlier, the same advisor had sent a photograph of his then-remote office—an arrangement of deck chairs on a boat on the water in the Bahamas.
Cheryl Holland, who tends to work in her office and did so throughout the pandemic, also has found her clients rarely focus on her location—or, for matter, the other parts of her personal life that may identify her own disposable income and wealth.
“You’re assuming clients are actually interested in the details of their advisor’s life,” joked Holland, the founder and leader of Columbia, South Carolina-based Abacus Planning Group, a registered investment advisory firm with more than $1.4 billion in assets.
“All kidding aside–honesty absolutely is the only possible option,” when clients pose personal questions, she said.
Before the pandemic, only 29% of employers had at least 60% of their employees working from home at least once a week before the pandemic, according to a PricewaterhouseCoopers report. Now 69% of companies expect at least three-fifths of their workforce to telecommute at least once a week.
“Flexible work was far from the norm and remote work was the exception for most financial institutions before COVID-19 forced shelter-in-place orders in March,” PwC researchers wrote in a report issued earlier this year based on a survey of 50 executives and 144 employees at U.S. financial services firms in the first two weeks of June 2020.
Advisors are by and large expecting the remote angle to last. One Merrill broker in New York said his branch was a “ghost town” with only around 10 of the 300 brokers typically in the office at their desks.
Among the largest employers of advisors—Edward Jones, Merrill, Morgan Stanley, Raymond James, Wells Fargo, UBS, and Ameriprise—managers have sent throughout the past 12 months mixed messages about remote work options for all employees or been relatively quiet.
In June, UBS Wealth Management USA gave its roughly 6,000 advisors carte blanche to make their own rules.
“Our FAs have an entrepreneurial spirit and are enabled to make decisions that are in the best interest of their clients,” a UBS spokesman said. “Many FAs already adopted a hybrid approach pre-pandemic, thanks to technology and global capabilities that allow them to stay connected and execute from anywhere, any time of day or night.”
In February, Raymond James Financial Private Client Group President Scott Curtis told recruiters during an online call: “We’re in an environment now where there will be advisors who come into the office maybe a few days a week, or maybe they don’t come into the office at all. We’re kind of indifferent about that.”
Despite the opening managers are creating for advisors to take their laptop and bolt to a Hawaii beach, the impracticality of that tact has kept many advisors simply in their homes.
“If I was on a boat in the Bahamas every month and I called the client, I’m sure that would, you know, annoy them a little bit,” said one UBS veteran advisor who also asked not to be named. He often works remotely from his home, and said his clients understand and accept that level of remoteness now.
The Merrill broker said the remote days will likely end for many colleagues when their children return to school and they are back in their hometown.
Regulators responded to the pervasive necessity for remote work during the pandemic by waiving some requirements, including such practices as on-site inspections, making compliance under remote conditions more feasible for brokerages, according to Chip Jones, executive vice president of Global Relay, a Vancouver-based company that provides technology to help brokerages with compliance.
In the future, Jones expects the Financial Industry Regulatory Authority to extend those waivers. Finra may also possibly seek the Securities and Exchange Commission approval for more permanent changes to some of its definitions within its rules, including what constitutes a branch office and the regulator’s tweaking of its language could make fewer remote locations require inspections, Jones said.
“The pandemic has demonstrated that financial advisors can work remotely, and that may trigger regulators to look at the definitions and possibly change those definitions, so they would not require on-site inspections,” he said.
Although his firm’s clients have little interest if his advisors and support teams work remotely, Gerber said his firm has established a rotating schedule for those groups. Veteran advisors, however, set their own rules about their remoteness, he said.
But even for the senior advisors, limits exist, he said. The Bahamas, Rome, or some other far-flung locale will not work, he said.
“We’re in a very difficult business with constantly changing factors and money is involved and so if you want to live your life and build your career sitting somewhere like Rome, you’re not the right guy for this firm,” Gerber said.