How to Become an Independent Financial Advisor

Have you considered becoming an independent financial advisor? In this guide, we’ll walk you through everything you need to know to plan, launch, and grow your business.

Good Life Companies is an industry-leading independent financial advisor network offering a full suite of services and tools to transition and support independent advisors and insurance agents. Learn more.

Why Transition to Independence?

Here are just a few benefits of becoming an independent financial advisor:

  • Be Your Own Boss. Independence allows you to build your business through your own vision and to become your own boss. Focus on the niches you care about and make the decisions that you believe will promote the success of your business.
  • Product Flexibility. Under a Hybrid RIA model, you can offer both commission-based services and fee-based services. This flexibility allows you to better serve your clients while keeping your own business goals in mind.
  • Greater Revenue Potential. You won’t have to rely on a small cut from a broker-dealer. You can set your own rates and can raise as needed while also taking on as many new clients as you’d like.
  • Client Relationships. Build strong and lasting relationships with your clients as the face of your brand while also having the flexibility to introduce them to new markets and products to better serve their needs.

For a deeper look into the advantages of independence, read our blog post on The Benefits of Being an Independent Financial Advisor.

Create a Business Plan

You can think of your business plan as the map for your business. Do your homework and take the time to think about the niches you are most interested in and how you want to structure your business. You should also consider your business infrastructure and start planning out technology in this stage.

Your business plan should include:

  • Your business legal structure
  • Business name and brand
  • An assessment of your current assets and clients
  • How you will map assets between platforms
  • Plans for your office space, technology, and equipment
  • Your current financial state and how you intend to finance the business
  • Hiring and training plan for new staff

The Business Development team at Good Life can provide everything you need to establish your business and get up and running as quickly as possible. Learn more.

Financing the Transition

Before deciding to become an independent advisor, it is important to perform a thorough assessment of your financial situation. Start-up costs can pile up, and it can take some time to build up the revenue for your business. A realistic goal for your first year should be to break even, and you should plan your finances accordingly.

Set up a business banking account and apply for business credit cards. If you do not have adequate savings, you may also want to look into financing options in the form of a bank loan or line of credit. Before launching your business, ensure that you have an adequate emergency fund saved up. Something in the way of a 6-12 month emergency fund can provide cushion and peace of mind while you begin to grow your business.

Begin Sourcing Clients

Launching your business with a stable of clients is essential for early success. One avenue that many advisors overlook is to tap into their existing client base. If it is within the terms of your contract with your existing broker-dealer, you may be able to encourage your existing clients to transition with you. Prepare messaging to help them understand the value of moving with you and clearly outline what you will provide as an independent financial advisor.

In addition to maintaining your existing client relationships, now is the time to start planning how you will actively source new clients. What will be your niche? What is your target demographic? How will you market your business to your audience?

Setting Up Your Office

A welcoming office space can be great to build client confidence while serving as a hub for all business activity. When setting up your office, it’s important to consider both the physical space as well as all of your equipment and technology needs:

Real Estate

Working from home or from a remote workspace is an option that can help you to keep costs down as you get started, but a dedicated office space is a great way to establish your business in the community, attract quality clients, and build client confidence in your offering.

The Real Estate team at Good Life can help you with all of your office needs. From consulting to lease negotiations and technology outfitting, let us help you build your dream office. Learn more.

Equipment & Technology

Here is a quick look at the most important equipment and technology to help establish your office:

  • Computers, furniture, etc. You’ll need all of the office basics including desks, chairs, computers, printers, scanners, and more.
  • VOIP. Call routing, voicemail, faxing, and softphone capabilities are a must-have.
  • CRM. A customer relationship management (CRM) platform is essential to help you manage client accounts and track new leads.
  • Client billing/invoicing system. You need to get paid after all.
  • Cloud document storage service. Tools like Dropbox can help your team to stay organized.
  • Presentation and/or conference room setup. Presentation technology can help you wow customers while presenting information in clear and understandable ways.
  • Financial planning software. There are tools available to help make your job easier and more efficient while providing informed advice to clients.

Good Life can provide all of the technology you need for your new office. Learn more.

Build Your Team

You have several options for staffing. You may choose to handle all administrative tasks in-house or outsource to other service providers—or some mix there-of. Managing administration in-house can be challenging, especially for new business owners. If you decide to go that route, take the time to vet and hire quality talent.

While you’re getting started, it may make more sense to supplement your internal staff with outsourced services, especially for areas like compliance. You may even choose to outsource financial planning services to augment or replace your own services.

Good Life can provide the following administrative services on a full-time or as-needed basis to support your business:

Promote Your Business

Marketing and promotion is essential to grow your business. You should prepare a comprehensive marketing plan to start drawing in clients as soon as possible:

  • Branding and design. Choose a brand name that will resonate with your target client base, and hire a professional designer to create your assets.
  • Website. A well-designed website is essential. You can think of your site as your virtual office-space. It will be the first impression that many clients have of your business, and without an online presence, it will be very difficult for new clients to find you.
  • Email marketing. Start building an email list as soon as possible, and be sure to create a business email account. Regular newsletters and targeted offerings can be a great way to build a community and open new lines of business with both new and existing clients.
  • Social media. Social media is a great way to build and nurture a community with your clients while improving your firm’s visibility to draw in new business. You can leverage paid ads or build a presence organically.
  • Events. Hosting events can be a great way to educate clients and prospects on new product areas and make connections with people in your local community.

Good Life offers robust financial advisor marketing services tailored to your specific needs. Learn more.

Good Life Makes Becoming an Independent Advisor Easy

Becoming an independent financial advisor can be challenging. At Good Life, we are here to support you throughout the entire process, help to ensure it is as efficient and stress-free as possible. From pre-transition planning and consulting to transition services and post-transition support, we will serve as your dedicated partner.

Let us help you launch, manage, and grow your business. Contact us today for more information.

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