Networked drive or local for media

If I have a hard drive plugged straight into my router that has all of my movies on it, would I be better off by taking that drive any plugging straight into my Plex server machine? Wondering if there is a performance degradation by not having the media local to the server. Everything is w-fi, which I know already has the cards stacked against me.

Yes, you would be better plugging it into your PMS server, the way you have it configured at the moment is adding a performance degradation:

Current: Rasplex->WiFi->PMS->WiFi->USB HD->WiFi->PMS->WiFi->Rasplex

Proposed: Rasplex->WiFi->PMS->WiFi->Rasplex

Regards