Is an Online Financial Adviser Right for You?

Wealth management is moving to the Web. Will your portfolio move with it?

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In an effort to address those issues, some online financial advising companies offer virtual sessions where clients can see their financial adviser and have a conversation like they would have if they met in-person. "Prop up an iPad and turn on iChat and you get the convenient anytime, anywhere experience without having to pay for parking," says Bill Harris, CEO of Personal Capital. According to Harris, another advantage to Personal Capital's business model is that its employees are registered investment advisers (RIA).

Moreover, judging from his prior experience as CEO of Paypal and Intuit, the company that created TurboTax, Harris says tax preparation, brokerage, and banking have made a logical transition to the Web and that it's only a matter of time until the majority of consumers get their financial advice online.

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Personal Capital also targets a wealthier demographic than most of the other emerging online financial advising companies. It's geared toward the mass affluent (U.S. households with between $250,000 and $1 million in investable assets), a group Harris says has been historically underserved by traditional wealth-management services. Nonetheless, Harris admits some consumers with more complex financial needs will continue to prefer taking their business to a financial adviser at a brick-and-mortar store.

Although online financial advising has its drawbacks, companies including Personal Capital, LearnVest, and FutureAdvisor are banking on the growing desire among consumers for convenience to fuel the shift from in-person to online financial advice. Says von Tobel: "Access is as easy as getting a gym membership."