How to Create a Financial Advisor Business Plan

To get from point A to point B, it is best to have a map to define the optimal route. To achieve your business goals and vision, it is essential to have a business plan to define the optimal strategy. In this post, we’ll walk you through the key items you should include in your financial advisor business plan so you can hit the ground running.

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What Is a Business Plan?

You can think of your business plan as a roadmap, providing you direction and focus to work toward your overall goals. Don’t be intimidated though. Your plan can be as long or as short as you need it to be. To begin, try putting together a quick plan with bullet points—a high level overview. Over time, you can build out sections of that plan in greater detail.

One of the most important things to keep in mind is that this is a living document. Your goals and business objectives will change over time, so it’s important to update your plan accordingly. While your plan should provide a comprehensive structure for your business, it should also be flexible.

What Should You Include in Your Business Plan?

Here are some of the most important sections to include within your financial advisor business plan:

Your Vision

This portion of the business plan is also known as an executive summary. It should include a high-level overview of your vision for your business. You may also define your company name and mission statement here. To get started, ask yourself the following questions:

  • What is the overall purpose of your business?
  • Who will you serve?
  • What services will you provide?
  • What are your short-term goals (i.e., in year one or two)?
  • What are your long-term goals (i.e., 5+ years down the road)?

Keep things relatively succinct in this portion of your business plan. This should be a quick and definitive overview of your business purpose. You can elaborate on items in more detail later in your plan.

Target Market & Demographics

Having an ideal client in mind can help to tighten your focus and set up your business to best target a given market. Your ideal client’s demographics should inform your marketing decisions as well as the products or services you intend to provide your clients. While it’s not necessary to focus all of your efforts in a given niche, building your business to target a few select markets can help to give you a competitive edge in those areas. Specializing in a given area can also allow you to build up the expertise to stand out from your competition.

Ask yourself the following questions:

  • Who do you want to serve? Why?
  • What problems will you solve for your clients?
  • How will you stand out to your target market?

Services & Pricing

Once you’ve settled on your target market, you can build out a plan to best serve their needs. In this stage, you will outline the actual services you will provide. Having the ideal client in mind first will allow you to build your business up around their needs. For instance, if you want to target retirees, you may build your service plans around retirement portfolio management, income distribution planning, social security strategy, estate planning, etc.

Of course, it is also important to consider your pricing structure for your services. How do you want to get paid—commissions, fees, retainers? Are you willing to underprice your services to attract new clients? If you were to increase your prices later, how will you initiate that plan without deterring clients? These are all important considerations to plan for as early as possible.

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Budget & Financial Plan

Practice what you preach, right? When putting your business plan together, it is essential to get the financial side in order as well. Be conservative when projecting costs, take your current assets into account, and make a plan for any financing you may need to take on to meet your goals. As you budget, be sure to consider both your startup costs and long-term operation costs. Do your research, and don’t be afraid to ask other independent advisors about their expenses so you can get a better idea of what to plan for.

When budgeting, it’s important to project your revenue realistically. Keep in mind that it can take time to build up a stable client base, so just breaking even in your first year may be a realistic goal. Just as with your expenses, pad your projections for revenue conservatively so you have some wiggle room in case things don’t go quite as planned.

Key Differentiators

Consumers have many options. It can be easy to get lost in the crowd. Be sure to do your research first. Take a close look at the advisors in your local market, and examine top-performers outside your local market as well. What are they doing, and what can you do better?

What defines your business, and what competitive edge can you offer your clients? And no, “providing exceptional customer service” is not a competitive edge. Virtually all financial advisors claim to do this. Instead, focus on what makes you different:

  • Do you have any key certifications or advanced degrees?
  • How long have you been working in the field?
  • What unique tools and resources do you provide your clients?
  • How many clients in your niche have you worked with—and do you have any great testimonials or case studies to share?
  • Do you provide any unique services, like virtual planning sessions?

Marketing Plan

Now that you have a solid foundation for the clients you wish to serve and the services you will provide, how will you actually reach new clients and build your book of business? Having a comprehensive marketing plan in place prior to launching your business can help you to start growing as soon as possible.

From branding and website design to content marketing, social, media and more, Good Life provides robust marketing services for financial advisors. Learn more.

SWOT Analysis

A SWOT analysis is an essential component of any financial advisor business plan. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is important to consider each area carefully so you can make plans for your business. Identify your key differentiators as well as the areas that could hold your business back from growth. Make plans for how you will overcome your weaknesses and any obstacles that stand in the way of your short- and long-term vision. Thinking carefully about these items from the planning stage of your business can help to prevent some major headaches down the road.

Good Life Experts Can Help

Good Life provides a full range of services to help establish, support, and grow independent financial advisor practices. If you are in the planning stage for your business, our business development experts can help you to draft your business plan and create a strategy to work achieve your goals.

Learn more about our financial advisor business development services, and get in touch today to get started.

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