As a financial advisor, you aren’t just in the business of managing money; you’re also in the business of building relationships—which may include clients who aren’t physically very close to you. That means technology has to be a key consideration for your office, whether you’re just beginning to break into independence or are expanding your firm’s footprint. Be sure to consider the setup of your new working environment carefully, to ensure it’s ideal for all and that everyone—you, your team, and your clients—can connect effectively.

Before making any decisions, be sure to work on your preferred arrangement with your firm partner’s compliance team or a securities attorney. Regulations were initially designed with the expectation that employees would be in an office, but the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) have made adaptations to allow for remote work setups as well.

Here, we look at the pros and cons of a traditional in-office setting, a remote-only work environment, and a hybrid model that allows for both.

In-Office: The Traditional Approach

The pros:

Shared devices and supplies. A central location allows employees to share necessary equipment such as printers, copiers, and office supplies.

Secure document filing. You may still want to keep copies of important data within cloud storage, but having a secure, in-office area for hard copy files may come in handy during power outages or other emergencies.

Easier collaboration. Interactions can become richer in person as shared spaces foster informal conversations that in turn may lead to significant business discoveries or breakthroughs. When interacting with clients, body language and unspoken cues are part of deciphering mood and disposition. And many people are more likely to exhibit interpersonal strengths with people sitting near them.

More accessibility to your team. It’s easier to notice how your employees are doing when you’re in the same building with them. You can see who is overloaded and catch tension that might arise between team members, helping you address issues before they become conflicts.

Rallying the troops is also easier when you have impromptu moments to praise a job well done. Small actions that foster camaraderie, like sharing snacks or offering small tokens of appreciation, work better when people are physically together, too.

Most important, the model you set for how to treat other people and the respect you give to each client, prospect, and team member is powerful when others see it firsthand.

The cons:

More overhead costs. Opening an office carries major expenses such as rent and utilities. The need for office furniture and cubicles also leads to start-up costs you wouldn’t have if you began your new practice from a home office.

Commutes that deplete employee time and energy. Starting the day with the frustration of traffic may not be a recipe for success for you or your employees. Commuting time directly reduces the hours your team could otherwise spend on productive work or relaxing and recharging.

Top talent’s desire for more flexibility. Expecting staff to be in the office 100 percent of the time may limit the talent you can attract. In fact, research shows that some employees would consider switching employers if their organization returned to entirely on-site work.

Business scaling challenges. Having a physical space restricts how far you can expand your practice. Unless you open branch offices or are willing to meet with clients virtually, your growth will be limited, geographically.

Remote Work: A Virtual Experience

The pros:

Ability to work from anywhere. When all you need is an internet and phone connection to be productive, you and your staff won’t be tied to one location. You can travel, move to a lower-cost area, and ensure that you never miss another family event—all while still connecting with your team and your clients.

Lower start-up and overhead costs. You can set up a relatively inexpensive home office space without the need for costly configurations and furniture. Although you may need to provide equipment for employees’ remote spaces, you won’t have the added costs of rent, utilities, and the other expenses that come with running a traditional office.

Potential for productivity. Instead of wasting minutes or hours on commuting, you and your staff can use working hours to get more work done. A recent study on remote worker productivity and work trends found that employees are more productive when working from home.

Expanded talent pool. A truly virtual work environment allows you to look for the best employees, regardless of where they’re located.

The cons:

Less personal connection with staff and clients. Digital connections are not the same as real-life interactions. Some may find tuning in to the needs of staff and clients challenging over the phone, by email, or in videoconferences.

Team-building obstacles. You’ll have to find alternative ways to create team-building moments by recognizing accomplishments, expressing gratitude for hard work, or allowing for moments of fun and frivolity. Planning in-person get-togethers throughout the year may be beneficial for building connections between team members.

Regulatory requirements. Certain activities require you to register a location as a branch. For example, if you present your address to the public (e.g., on business cards or your website), if you or a member of your team regularly meets with clients at that location, or if records are retained there, then that address needs to be registered. Registering will result in added branch fees and subject the location to regular audits.

Training and professional development complexity. Training new employees on systems and procedures can be difficult over the phone or in a video meeting. It can also be tough for an instructor to spot and address issues when someone falls behind if they cannot watch their progress in person.

Hybrid Model: The Best of Both Worlds

The pros:

Top employee preference. More than half of respondents to a McKinsey survey said they’d prefer a flexible hybrid working model in which employees sometimes report to premises and sometimes work remotely. Hybrid work combines the advantages of both environments. Employees and clients in a hybrid work paradigm can meet and connect on-site while also having the flexibility that remote work offers.

Lower costs. When fewer employees work in the office at once, equipment, desk space, and other necessities can be shared. You’ll still have to pay rent and utilities for your office, but a more modest space can save you money.

Flexible company culture. Having a central location for in-person employee get-togethers and important meetings can build a stronger bond while still offering the flexibility many employees want and need. Offering a hybrid model can also make attracting and keeping top talent much easier.

Ability to offer client engagement on their terms. No matter how clients want to interact—in person or virtually—you’ll have the space and resources to accommodate their needs.

Regulatory flexibility. Within a hybrid framework, your brick-and-mortar office can serve as a registered branch while remote locations may be nonbranch offices. You can retain branch office records and conduct mandatory activities (e.g., regular customer meetings) at registered branches. This format can alleviate the challenges associated with having multiple registered branches yet provide the flexibility for remote activities.

The cons:

Stifled productivity. If your office space is limited enough to require people to share a workspace when in the office, they may be less productive. A hoteling workspace limits employees’ options for organization, storage, and work preferences. Having employees working in close proximity can also interfere with client phone calls and meetings—for example, if background noise can’t be minimized.

Hiring pool limitations. If you expect all employees to keep some in-office hours, they’ll need to be local. Consider whether you are open to letting certain employees work fully remotely while others split their time between office and home.

Scattered team calendar. Keeping track of the days when team members are in the office or at home can be confusing, especially at first. You’ll need a system that designates who is in the office and when—and whether you let your employees decide.

Regulatory constraints. Having a remote office requires an assessment of the activities and records kept remotely to determine how to meet various regulatory requirements. With two or more locations, you may create complexity and added cost versus choosing one model type.

Let Your Work Environment Pave the Way for Success

Only you can decide the most productive way to set up your office. If you’re new to running your own business, or you’re looking for a new way to run your practice as efficiently as possible, you may find it helpful to seek guidance.

A good firm partner has been through it before, with many other advisors. The lessons that come with experience can eliminate some of the obstacles you might otherwise encounter along the way. Partnering can make this exciting adventure smoother for you, your team, and your clients—whether it’s in person, remote, or both.