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How to Start a Financial Advisor Business in 8 Easy Steps

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Free Financial Advisor Business Plan Template

April 15, 2024

11 Min Read

how to start a financial advisor business
Table of Contents
Writing a business plan?

Ever feel lost in the world of money? Most of us do! We know saving and planning is smart, but figuring it all out can feel impossible. That’s where financial advisors come in, with their tricks and knowledge, to help us avoid money troubles.

Good news! This booming field isn’t just for big firms. You can actually become an independent financial advisor, be your own boss, and help people master their money magic. Sounds cool, right?

This guide will tell you exactly how to start a financial advisor business. Let’s ditch the confusion and get you started!

Primary Responsibilities of Financial Advisors

Financial advisors are pros at helping you handle your money and hit your monetary targets.

They guide you on investing, saving for big stuff like houses or college, and making retirement plans.

Here’s what they do in simple terms:

  • Chat about your money goals: They first get to know what you’re aiming for and when.
  • Plan your finances: With your goals in mind, they help map out a plan, often suggesting where to invest.
  • Watch over your money: They monitor your investments, making changes if needed.
  • Get more clients: They also work on finding more people who need their help by going to events and networking.
  • Buy and sell for you: Some advisors also handle the buying and selling of stocks and bonds.

Now that you’re familiar with the responsibilities of a financial advisor, let’s explore how to become one in 8 simple steps.

1. Choose a business niche

In the world of financial advisors, standing out is crucial because it’s really competitive. Here are some niches to look at finding your unique spot:

Shared Interests Groups

This is about connecting with people who share common interests or are in the same social circles, like golf buddies or parents you meet at your kid’s school events. It’s about trust that comes from being part of the same group.

Help New Parents

Parents, especially new ones, need help planning their kids’ futures. If you can offer both financial and personal advice, you’re golden. Parents appreciate guidance from someone who understands what they’re going through.

Teach Money Smarts

Being someone who can teach financial literacy puts you in a great spot. You’re not just selling; you’re helping people learn, naturally leading to trust and business.

Stick to the Classics

Some people, especially older ones, prefer the personal touch over tech. They like things done the old-fashioned way. If you can offer that, you’ll stand out to them.

Get Techy with Millennials

The younger crowd digs tech. You might want to steer clear if you’re not up to speed with the latest tech and slang. But if you are, there’s a lot of potential to tap into automation and online services.

The ideas above are just the beginning! Your true niche might be way more specific. Think about it – maybe your past job or life experiences give you a special edge. Be creative in finding what works best for you.

2. Create a detailed business plan

Your business plan is the blueprint for your financial advisor firm. It’s where you map out your services, how you’ll run things day-to-day, and your strategy for attracting clients.

Want to save time and ensure your plan hits all the right points? Grab this financial advisor business plan template – it’s the perfect starting point.

A solid plan should cover:

  • Exactly what you’ll offer clients – what sets you apart?
  • The nuts and bolts of your operation
  • Your marketing strategy to stand out from the crowd
  • Where do you fit in the market – who are your competitors?
  • Financial forecasts – it’s about making money, after all!

The coolest thing about writing a plan is that it forces you to really define your ideal client.

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3. Register your Financial Planning Business

After you register your financial advisor business, it’s time to make things official and protect your assets. This might sound difficult, but it’s like building the walls around your business castle!

Here’s what you need:

Choose your business entity

The most common business structure types are:

  • Sole Prop: You and your business are one, good for simplicity but riskier.
  • Partnership: Team up with someone and share profits and risks.
  • LLC: Protect your personal stuff if things go south; it’s a popular choice.
  • Corporation: More complex, best for bigger businesses.

Register for taxes

Before opening your doors, you must register for different state and federal taxes. It’s like getting your business license. You’ll need an EIN (Employer Identification Number), which is easy and free to obtain from the IRS website!

Open separate bank accounts

Keep your business finances separate from your personal life! Imagine having two wallets – one for work, one for yourself. This protects your personal belongings if someone sues your financial planning business. It’s like building a wall between your work life and personal life.

4. Get financial advisor licenses

Financial planners have to pass the Financial Industry Regulatory Authority Series 7 Exam. It is essential to become a registered investment advisor.

However, The Series 7 isn’t the only exam on your journey. Depending on your specific goals and compensation style, you might need additional licenses like:

Series 6: This lets you sell packaged investments like mutual funds. It’s a good starter if you want experience while studying for the more challenging exams.

Series 63: Every state requires this license, covering the legal landscape and essential rules of the game. Think of it as your state-specific add-on.

Series 65: This one’s for fee-based advisors, focusing on regulations for non-commission pay structures. It’s like learning different rules for a different game mode.

Most financial planners tackle Series 7 first, followed by Series 63 and Series 65. It’s a strategic approach to level up your skills.
Consider professional designations like CFP or CLU. These are like extra badges that boost your credibility and knowledge, making you an even more valuable financial advisor.

5. Secure funding for your startup

Funding can vary greatly depending on your vision – a cozy home office or a team setup.

If you’re starting small, a home office will cost between $10,000 and $15,000. But for bigger dreams, factor in office space, staff, and marketing costs.

Now, how do you pay for it all? There are three main options:

Your Savings: Tempting, but remember, unexpected bumps are part of the journey. Don’t risk a financial meltdown.

Friends & Family: Feels safe, but potential awkwardness if things get tough.

External Funding: 

  • SBA Loans
  • Govt Grants.
  • Crowdfunding

To get external funding for your financial planning firm:

  • Research to find potential investors and lenders.
  • Get recommendations from clients or financial planners with experience in securing funds.
  • List potential lenders and investors to share your financial planning business plan with.
  • Create a marketing strategy to attract customers and make money.
  • Be ready to discuss your services, target market, startup funds needed, and their use.
Many financial advisors love the SBA 7(a) loan program for its flexible repayment options and support for a small financial planning firm like yours.

6. Prepare a customer acquisition plan

With over 283,000 pros already out there, how do you stand out and build your client base? Don’t worry, we’ve got some insider tips to help you make your customer base:

Expand Your Network

Sure, social media helps, but building real connections goes further—target groups like accountants, lawyers, and business networks.

As Donald Reichert, an expert in “exit planning,” says: “Leverage these ‘centers of influence’ and use social media, but remember, relationships take time, so start networking early!”

Serve Untapped Markets

While retirees are familiar clients, they cater to underrated demographics, too. As wealth management director Matt Cosgriff shares: “I focus on young professionals, a group often neglected by advisors.”

Be a Community Hero

Give back to your community! Volunteer for causes you care about. It’s a great way to connect with like-minded individuals who might become future clients, and it doesn’t cost a dime!

Share Your Expertise

Host online webinars on financial literacy. Educating others and building your brand as a financial expert is a win-win.

Think of yourself as a mini-financial influencer! Share valuable content online to position yourself as a trusted professional.

Build Your LinkedIn Profile

This platform is a goldmine for connecting with potential clients. Create valuable content, engage with others, and watch your network grow.

Consider Paid Advertising

Targeted digital ads can be surprisingly affordable and effective. Plus, you can retarget people interested in your website, keeping you top-of-mind.

7. Hire initial team members

Do you want to start a successful financial planning firm from your home office? Great! You might not need employees right away. But as your business grows, you’ll need help to keep things running smoothly.

Here are some roles you could consider:

  • General Manager
  • Marketing lead
  • Clerk

Remember, you don’t need to hire them all at once! Start with what you need most, whether it’s one person wearing many hats or a dedicated team.

But how to find the right candidate? Here are some options:

  • List your openings on popular platforms like LinkedIn, Facebook, or Jobs.com.
  • Consider paid options like Indeed, Glassdoor, or ZipRecruiter to reach a wider talent pool.
  • If you have the budget, a recruitment agency can search for you.

8. Start marketing your business

Being a financial planner means finding new clients, but how do you do it without bugging your current ones or resorting to outdated methods? It’s time to get creative!

Here are a few unconventional ways that most experienced financial advisors use to attract new business:

Host Client Events

Instead of asking for referrals, host a client event. It’s a fun way to show appreciation, build relationships, and meet potential clients all at once.

Plus, who can resist a good party? Remember, people they trust bring a guest: more potential clients for you!

Find Your “Client Connectors”

Some clients love recommending services. Identify them and send a personalized message: “I’m looking for clients like you, and you’re one of the few I trust to recommend.” It makes them feel special and opens the door to referrals.

Be a Social Media Star

Share financial tips on platforms like LinkedIn or YouTube. Don’t go wild with production, but keep it exciting and relevant.

Talk about hot topics, share updates, and answer questions with real-life examples (without revealing names). Then, send your videos to your client list. Engaging content attracts followers and leads!

Join Mastermind Groups

These online groups connect you with other advisors for sharing best practices, brainstorming, and collaboration.

Learn new things, mentor others, and grow your network virtually! If you can’t find one, start your own!

Network Like a Pro

Attend local events or join online groups related to the financial services industry. Connect with other professionals, answer questions, and share your expertise. It’s a cost-effective way to build relationships and get your name out there.

Teach the World

Hold workshops or webinars on financial topics. Sharing your knowledge positions you as an expert and attracts clients seeking guidance. It builds trust and lets you connect with potential clients more deeply. Webinars reach even more people!

Tips for Growing a Financial Planning Business

Financial planning services are changing fast, and advisors need to adapt. But with limited time, how do you find growth strategies that work?

Here are a few simple steps to boost efficiency, improve client experience, and take control of your future:

Know Your Clients

Start by analyzing your client base and services. This helps you find your most profitable areas and identify challenges. Ask yourself:

  • What type of client should I focus on?
  • Who aligns best with my approach?
  • How many relationships can I manage while keeping quality high?
  • What about clients who don’t fit well?

Partner with Influencers

Next, think beyond solo efforts. Teaming up with professionals like lawyers, accountants, or trust officers creates a support network for your clients.

You’ll offer a wider range of expertise and attract higher-value clients.

Engage Consistently

Have systems in place for every stage of the client journey, from that initial contact to onboarding to celebrating big wins with them. It shows you’re invested, not just interested.

Build Your Brand

Make sure your brand reflects your value! A great website, insightful content, and helpful resources aren’t just promotional, they position you as the expert clients seek out.

Automate Processes

Automated tools for cloud storage, business planning, and communication free up your time, so you can focus on what matters: your clients.

Next Steps?

Starting your own financial planning firm is tough and has its challenges. However, with sound research, a strong business plan, and the proper paperwork, you can launch your financial advisor business and succeed.

Keep in mind that your client’s needs should always come first. This means you should make choices and give advice that’s best for them, not just for you.

Your commitment to putting clients first should be reflected in your business plan. Also, be prepared for rejection, as some clients won’t follow your advice.

The Quickest Way to turn a Business Idea into a Business Plan

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About the Author


Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more


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