How to Launch Your Own Financial Planning Firm

how to launch your own financial planning firm 21591
how to launch your own financial planning firm 21591

Launching your own financial planning firm is exciting, but it can also be quite stressful. The best financial planning companies don’t just sell products and services; they provide extensive support and tools to help their clients better understand finance and get them to think seriously about how money impacts their life. 

Having a solid plan can help prevent lots of headaches and make sure that you are ready when you launch your business. These 6 steps can help you to successfully launch your own practice

1. Write a Business Plan

As with any other type of business, it is very important to start with a soundly written

building a business plan financial advisor business plan. If you invest some time into building a business plan, you could see a significant ROI. Research has shown that companies that plan grow 30% faster than those that don’t. Your plan should include: 

  • Mission and vision statement;
  • Goals of the business;
  • Strategies on how you will achieve your goals;
  • Clients and prospects demographics;
  • How you will differentiate from the competitors;
  • Marketing plan;
  • Probable costs. 

The purpose of your business plan is to help you articulate a clear strategy for starting your financial planning business. It will serve as a roadmap to success, providing clarity on all aspects of your business and become a reference tool to keep your business on track with operational milestones and sales targets.

​​2.  Define Your Financial Planning Niche

Determining your niche is essential to creating your practice. You should choose your target market based on either the expertise you have or the expertise you wish to gain. This will save you lots of time and help make you an expert for your niche.

Stretching yourself too thin between financial aid options, teacher or military retirement issues, special needs planning, and student loan consolidation will only leave you exhausted and inefficient. Focusing your research will make you a far more effective financial advisor and will increase your chances of getting referrals from satisfied clients. 

3. Consider the Costs

One of the most important things you need to find out is the costs involved in opening a financial planning firm so that you are well prepared. Starting a firm requires you to become a RIA (registered investment advisor) with your state. You’ll spend from $10k to $20k for basic startup costs, including legal documentation, vendor fees, and office space. You will also need a contract with a custodian.

Besides these initial costs, you should also consider the ongoing expenses. These include business insurance, errors and omissions insurance, office upkeep, rent, staff costs, as well as account maintenance fees for a custodian. 


4. Decide on Your Services and Fees

You need to be intentional about your client selection and client engagements. Some financial advisors like building long-term relationships, whereas others prefer a steady stream of new ones or a combination of both. Your pricing needs to go hand in hand with the clients you want to reach. 

For instance, if you prefer building long-term relationships, an hourly model isn’t the ideal fit. If, on the other hand, you focus on comprehensive planning with clients with lower investable assets, you should choose a subscription or retainer model. 

5. Licensing and Training

If you are new to the business, besides obtaining the necessary licenses, you should consider earning professional credentials like Chartered Life Underwriter or Certified Financial Planner. Certifications like this can provide credibility and academic training for both rookies, as well as those getting into a new line of work.

NAPFA, FPA, XY Planning Network, and Alliance of Comprehensive Planners all offer training, and a wealth of industry knowledge you can benefit from. 

If you are an experienced financial advisor, training and licensing might not be an essential requirement unless you’re looking to expand your offering.

6. Market and Promote Your Financial Firm

Promotion and development should be a part of your workday simply because more business equals a better bottom line. When it comes to financial planning firms, one of the easiest ways to get new clients is by asking for referrals from current customers. However, sometimes this isn’t enough. 

If you want your business to be successful, you’ll need to expand your marketing efforts and explore non-traditional ways of business development. This includes using social media, starting a blog, hosting client events, attending local networking events, joining small business think tanks, etc. 

Final Thoughts

Starting a financial planning firm does involve a significant amount of work but if you have a solid plan and take it one step at a time, you can manage to set strong foundations for a successful practice. The six tips outlined here cover only the basics but should be enough to help you get started and set you on a path to success. 



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