Since the turn of the 20th Century, brick and mortar has played an important role for financial service companies. From metropolis to small town, many of the most prominent and iconic buildings shaping U.S. skylines have been banks, trusts, insurance companies and brokerage firms.
These buildings had use value. They housed staff, management and operations and provided suitable delivery platforms to serve clients. But utility did not explain their architectural presence and grandeur. Beyond the practical, they seemed designed in large part to concretize what were essentially abstract and ephemeral services. From Greek Revival, to Deco, to modern steel and glass, the size and solidity of these structures were expressions of strength, longevity, stability, commitment, sophistication and success. They were built to engender trust, respect, and even awe among those who experienced them and they served as tangible proof statements of companies’ substance and stature in the marketplace.
Fast forward to today. The virus has accelerated a technology driven trend already afoot, to move away from the physical office. Many wealth managers, among other financial service providers, are realizing that operations can successfully be managed remotely. Perhaps, more importantly, recent experience is leading organizations to conclude that current client relations may also not be compromised by relying solely on electronic interactions. Virtual personal relationships with clients seem as strong as in-person ones. The result is that organizations are considering downsizing their office presence or even eliminating maintaining an office at all. Since leases tend to be the next highest expense for most RIAs behind comp, and travel and scheduling can be a drag on productivity, the decision to go fully remote may be a win-win.
But, before we give up on offices altogether, there are some intangibles that a physical “storefront” offers. It can play an important role in legitimating the firm to new prospects, giving it a concrete and undeniable reality. A well-architected office at a desirable address can convey prestige and trust to an otherwise wary prospect. And while Zoom, GoToMeeting, Teams and other technologies have undoubtedly made viable what would otherwise have been an untenable business situation, there is still much to be said for those in-person casual ad hoc conversations that take place and often are the source of some of the best ideas. It remains to be seen how many advisory firms and wealth managers, particularly the larger ones, will be willing to risk these apparent advantages to abandon brick and mortar entirely.