How To Start a Financial Planning Business




Learning how to start a financial planning business can be one of the most challenging businesses to start. But those challenges, should you choose to pursue this, will establish for you the momentum you need to be successful.

If you do decide to do this business, let me say, first it is a great option. Why? More people are looking for financial planners every day. Instead of looking at the past, they want your services to project what will happen in the future, forecasting income and expenses. 

Projections can be used as an early warning system to help them plan for cash flow dips and identify financing requirements.

They can also use it to monitor their finances. This will allow them to quickly assess their progress and avoid any problems. 

Where does this leave us with the whole idea of creating your own business? Simple: you know you will have people trying to get access to your services. 

This is all thanks to the fact that financial advisors should create a business plan to help them know where they want and how to get there and for it, it is natural to go to a business like yours. 

That being said, how can you get started with this company? Is it that simple if you know how to work with your finances? 

There are a couple of steps you can follow, but if you want to establish everything, we recommend focusing on these: 

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Do Your Research First

Research is the most important thing in a business plan. There is a huge difference in the quality and quantity of your research. You can’t just do research for hours on end. At some point, you must take action.

When you are planning your business, it all comes down to the same. This is why we recommend doing this research to find out your demographics, psychographics, and where all the people you will be aiming for are hanging out. 

Based on your research, you want to be able to make informed decisions.

Experience has shown that the best financial advisors are meticulous in choosing whom they will work with. They know how to serve their clients best and how many they can serve.

Financial advisors often aim to get as many clients as they can. This is a bad approach, and the reason why you should keep this in mind for your business is simple: because you don’t want your financial planning business to work with everyone. 

Your business will become chaotic as it becomes a volume practice rather than a calmer, service-oriented one. 

Your research also involves updating yourself with the business trends. Do you know what it takes to have this business? If so, how will you handle them? 

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Based on That, Do You Need Your Business Plan?

Some people will say a business plan is useless. Others? They will set they are the foundation of any business. 

It’s true whatsoever that even if your plan isn’t written, it is important to think about how you can capitalize on opportunities, establish a foundation, and start marketing. 

This takes us to the same premise: each business must have a plan. It can be a simple mental structure or a detailed description that spans over ten pages. A fancy business plan template for financial advisors is not necessary.

While some people don’t believe a business planning plan can have much impact on a company’s success, we believe it can increase the likelihood that the plan is followed through. 

Does this mean the plan will be implemented exactly as written? No. It makes people more likely not to execute the plan but get off their backs. In the end, however, you will have a good idea of how to handle your business and project to ensure you don’t fail in the process of starting and growing.

Written plans force you to assess multiple areas of your business simultaneously: your value proposition and your operations, as well as your marketing strategy.

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Make Financial Projections

You can create monthly financial forecasts by using sales forecasts and expected expenses for labor, supplies, overhead, etc. Now add the costs of the projects that you have identified in step 1.

You can either use simple spreadsheet software or other tools in your accounting program. Do not assume that sales will immediately convert to cash. You should only enter them as cash if you anticipate getting paid based on previous experience.

Prepare an income projection (profit or loss) and a balance sheet projection. You can include multiple scenarios, including optimistic, pessimistic, and most likely. This will help you anticipate the impact of each scenario on your projections.

Your accountant may be able to help you with your financial projections. As your banker or investor will need financing, it is you who must discuss the plan with your accountant.

And not, it is better if you work with an accountant and other professionals instead of trying to rely on this process with your abilities only.

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Licensing & Training Come Before or Next

A professional designation is something that rookies should look into, in addition to obtaining all the required licenses. These credentials can provide valuable credibility and educational training to those who are just starting out in the business or want to expand their knowledge.

If you’re an experienced business owner, licensing and training might not be necessary unless you are moving into a new field of work. If you own an insurance company and want to make investments or provide financial planning services to your clients, you will need the required license (and possibly certification).

In this case, we are talking about licensing and training as a financial planner, but we are assuming you’re already familiar with those when considering starting your business. 

If not, it’s better to stop for a minute and make sure your education and licenses are on point. Otherwise, you are mostly bound to fail in your business as people are trying to find reliable and certified planners.

Decide on Services & Your Business Model

It is important to decide what type of financial planner you are. The type of service you provide to your clients and your compensation method are important factors in this decision. On average, financial planners who are paid on commission earn more than those who are paid a fee.

Customers who are looking for impartial advice usually look to fee-based organizers. Your personality type may influence this decision. 

If you are analytical and don’t like high-pressure sales, you might feel more comfortable running numbers and making recommendations.

If you’re a Type A personality who enjoys working with people, you might have greater success using a sales-based approach. You may need licenses depending on the type of business you choose to run.

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Don’t Over-Analyze Your Process

Do not spend too much time trying and perfecting the process. You will need clients and a test lab to help you develop your approach and refine it. This means you should work on a plan and the best possible outcome, but don’t try to be a perfectionist with it. 

Many of your clients are new to working with a financial advisor, especially if they’re younger. This means that if you do something new with your clients, they won’t know it is new for you. 

Don’t be afraid of taking risks, asking new questions, trying new techniques, and delivering new products to your clients to find what resonates.

Taking it easy and working around opportunities makes you more productive and empowers your clients. 

Just plan in terms of structure and let time and experience build your perfect business.

Open A Bank Account for Your Business

Separate your personal money from the money of clients

Make sure to create a system and ensure that you are not spending funds on your business. Software for tracking client payments is helpful.

Excel is an excellent tool to accomplish this task. If you lack the skills, you can hire someone to do it for you. 

If you find that hiring someone is off-limits, you can always focus on taking a free course that teaches you the basics. In this way, you will have the essentials without paying any money.

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Register & Creating Business Entities

Register as a financial planning company owner in the state where you operate.

Your legal name will be the full title if you are a sole proprietor. This name must be used to fill out all government and legal forms.

If your business uses a different name, you must file a registration at your government agency.

After you have selected your business name, you need to decide the type of entity you want to create (sole proprietorship or partnership, corporation, limited liability company, corporation, etc.).

This is also important to register for local taxes and how you will work with your business in the future.

Start Looking for Financing Options

Once you have completed this stage and your business plan is complete, it’s time for investors to show interest in your business… as long as you start looking for them. 

Small businesses need funding to grow, start and keep operating. We don’t need to tell you why. We want you to know that now is the best time to begin looking for financing.

There are many funding options available to you. We will choose the most popular ones based on your financial situation and access to funding for your financial planning business:

  • Traditional banks.

Banks can lend capital and finance if you have good credit and collateral.

Traditional banks are good because they can help determine your eligibility for financing. A representative can help determine which documents you need and what options are best.

You can still apply even if your company does not have sufficient assets or a track record of being eligible.

Local banks are a great source for small-business financing because they often get involved in economic development. A 2021 Federal Deposit Insurance Corp report shows that 32% of small business loans are held in community banks.

Small businesses have many funding options, including credit lines, term loans, and SBA loans. 

  • Small Business Administration.

If banks make it difficult to meet their requirements and criteria, they can be ignored.

The U.S. Small Business Administration will provide federal guarantees to traditional lenders when you apply for one.

SBA loans are more likely than banks to provide the funds you require. SBA loans are linked to traditional lenders at attractive rates, and they can be guaranteed. SBA loans can be used to finance startup ventures, unlike bank loans.

Although the application process can be difficult and may require a lot of paperwork, getting the financing you need is worth it.

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  • You can trust online lenders.

To be eligible for quick funding, you will need great credit ratings. People with low credit ratings can apply for this option if they have the need and need to find some alternatives for the regular funding options. 

Online lenders are increasingly popular due to the fact that traditional banks don’t have as much capital access as online lenders. This is particularly true for people who are just starting out in the startup world or who have innovative ideas that aren’t financially feasible.

Online lenders can be more beneficial to your business type, in our view. Online lenders can provide fast cash and can approve funds in as little as 24 hours.

Peer-to-peer lending eliminates the need to have institutions or banks connect investors and borrowers.

But you might not realize that borrowing costs can be much higher than you think. It is worth considering whether it is worth the risk. Lenders can charge as high as 80% per year.

  • Credit unions.

Like banks, credit unions offer loans at attractive interest rates and support SBA. The number of small business loans has increased in credit unions.

According to the Consumer Finance Protection Bureau, there was a double-digit rise in small business financing credit cooperatives between 2004-2021. Even though financing options are readily available, it can be difficult for small businesses to access them.

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Include A Plan for Hiring People

Many financial advisors are excited about setting goals and creating a plan. But when it comes to their business plans, they focus only on themselves. This is fine for a while, but eventually, they will regret not having planned out the hiring process.

Here’s why: Most financial professionals won’t think about hiring another employee until they really need one. You’re more likely to make mistakes, and it will cost you when you don’t rely on someone else when needed. Also, a bad hire can result in a loss of many times the salary.

Financial advisors who want to expand their business beyond what they can produce need to find people who can do it better than them. This could include asset management, financial planning, market analysis, and financial planning. 

Focus on what you are good at and enjoy, then hire the rest. 

If you have a team, make sure to set aside time for your business plan discussion with them. They can ask questions, offer suggestions and make any necessary changes.

Develop & Follow Your Marketing Strategy

Your company could be the most trusted in the area and may offer the best services to anyone. But you must learn how to market your services in order to maximize your potential and gain more clients.

No matter what niche, referrals are an integral part of any company. Referrals can be a threat to your company, as inconsistency could cause feast-and-famine cycles.

It is essential to have a solid marketing strategy in place and stick to it to get steady work.

How do you make yourself stand out from other financial planner professionals? This is the most important question to ask.

Customers who don’t know your reputation won’t be able to help you get work.

What can you do to make your brand stand out? Always focus on the obvious yet important questions if you want to work around the best strategies.

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Tips to Start Your Financial Planning Business

As you can see, there’s a lot to consider, and to help you alleviate the task for your business; we can provide some tips to help you boost your efforts: 

Remember to Consider Displacement 

The idea of displacement is when you stop doing one thing and start doing another. It is the opportunity cost associated with all of life’s activities.

As you create your business plan, remember that you may have to give up other options in order to follow a certain route. This powerful technique will help you to map your most important business-building elements.

Many financial advisors become obsessed with expensive software and tools as soon as they start their business. They realize that they don’t use these tools nearly as often as they thought. The opportunity cost is high, and the money is gone.

These advisors would have been better served if they had recognized the opportunity cost at the beginning and allocated their resources to higher use.

Be Conservative 

Although it is good to have big goals and never discourage people from them, it’s important to set your mind to what is possible and work around conservativeness. 

Be conservative when putting together a financial adviser business plan. Write down that you will make less and that you will spend more. This way, no matter what happens in life, you’ll still be okay.

Be careful not to anchor your business plan too strongly within industry norms. Marketing is a small part of the overall budget for financial planning firms. This is a shame, especially considering that marketing should be a revenue driver.

Consider this: If you spend $1 on marketing and get $2 back, would that limit you to a “budget” you set? Not really. Once you see marketing working, don’t be afraid of allocating more money. I will be your friend later.

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Compare with Your Competitors

Although we believe you should always keep an eye on your paper, it is foolish to ignore your competition.

You’re bound to have service providers from your office as financial advisors within a short distance. Spend some time getting to know what they are doing to market and grow their business. These are some questions you should answer:

  • How do they get new clients?
  • How does their website look?
  • Are they able to offer a unique selling proposition?
  • Do they have an email list? If so, you should sign up.
  • Do they host any events to show appreciation for clients?

These are just some of the questions you should ask when you conduct your competitive analysis. It is a good idea to identify your top ten competitors. This shouldn’t consume too much time. However, it isn’t a solid analysis if you only analyze ten competitors.

You should also pay attention to your top ten competitors if you are looking to enter that market. If someone is looking for a financial adviser, they will compare the top players in the field. You should compare your competitors’ offerings and learn how you can offer your clients better service.

The Local Lead Generation Process for Your Financial Planning Business

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All right! So, everything is about building properties and generating leads. But how does the process actually take place? Are there other steps I need to know?

The steps I mention below are what students from our local lead generation program follow to generate leads for businesses like yourself. So I’ll help you see what we do. And how if you join our program, you can simply generate leads for your own business (unless you want to start a side hustle and build a laptop lifestyle business).

Essentially, our lead generation can be divided into four steps:

The first is prospecting. You need to take the time to do market research on a niche (industry) and determine how many phone-driven businesses are there.

Keep in mind that this is local research as you need to know how many companies need leads. For example, you may search for “plumbing services Youngstown OH.”

You will find dozens or even hundreds of businesses trying to get themselves in front of the customers by ranking on Map Listings, organic results, and even Ad.

The second step, building. When you find a niche (plumbing, tree services, a software company, real estate…), you will need to start building your digital properties. You don’t need to be an expert in HTML or coding. It can be easy with the right tools.

The third step is now taking time to rank your lead gen website. With the site done, you need to work on SEO strategies and start dominating those Google search results. If you’re new to SEO, it stands for Search Engine Optimization.

To keep it simple, it consists of the entire process of growing a company’s visibility on search engines like Google and generating organic traffic. And remember this, local lead generation is part of the strategies.

Moving on to step four, once you rank the site, you will start getting your ROI and profits. You only need to rent it out to a local business interested in the leads the site generates. You can offer a couple of free leads to their move on with the actual pay per lead.

To review steps 1-4 above, I described it to a normal student who is building a lead gen business to help local service providers generate more calls. But replace the student with you as the business owner. And replace sending the leads to a business to simply siphoning the leads to your personal business.

By the way, fun fact, about 20% of our students in our local lead gen program are actually business owners who went through the program. And they use the skillsets we teach to generate leads for their own business.

An Example of Lead Generation: Home Advisor

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You must be thinking, “if lead generation sounds so good so far, how come I haven’t seen any company?” That’s the thing; there are many out there. You just don’t know they are dedicated to it.

HomeAdvisor is one of the best examples you can find on the Internet as it is a top lead generation company that has spent millions building its brand but also earned even more zeros for this same reason.

They started small as everyone else but invested in building their brand awareness to make people who are looking for home services go to their website and find what they need. They are over 75% of people’s first choice when they need those services.

If you don’t get HomeAdvisor that much or need a refresh, users need to submit their information to request a service and get a professional or expert who can provide it.

HomeAdvisor’s job is to share your information, which makes you a lead, with local companies so they can contact you and offer the service you’re requesting. For sharing this lead information, HomeAdvisor gets paid by the companies. This happens for every single lead they send to multiple businesses.

Business owners who don’t have marketing skills or don’t even know how to have any online presence will always rely on those pages to list their services.  They will save time and effort, but companies like HomeAdvisor can make them spend lots of money as leads aren’t exclusive (one lead is sent to multiple companies after all).

Using Facebook Ads aka Paid Ad Platforms: Do They Generate Leads?

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They DO generate leads. If not, no one would use them.

However, you need to remember two facts:

  1. Paid ads or platforms can be expensive.
  2. They don’t generate “natural” leads.

Whenever someone sees or clicks in one of those ads, over 80% of them did it by accident or are trying to close/report it.

Why? Because they aren’t looking for those services. At least not at the moment.

What those ads do instead is interrupt their time on the platforms. Users aren’t there to find companies or businesses unless they are searching for a specific company’s user, and for that, there’s a search bar. This is why it is hard to convert them to actual customers who will show interest in the companies’ services. Also, you’re limited by a budget.

When using lead generation, everything is organic. You aren’t forcing others to pay attention to your business but rather being there when they need you. This is why Google’s organic traffic will always beat paid ads, and the reason companies continue investing in it, which is a lot cheaper as well.

What Is Local SEO?

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Don’t worry… I didn’t get it at first either. Following the short explanation, local SEO focuses on scaling businesses’ visibility on search engines. However, this is only for those who serve their communities face-to-face.

What does this mean?

Experts and professionals like painters, plumbers, and dentists (but not only them) offer their services to their local customers.Why? Because they can’t deliver them unless they are located in the same area of their customers.

To make sure those businesses get more leads, you need to rank them locally by claiming the business listing on Google to place them on Map Listings. Local SEO also involves online reviews, citation management, and how you manage your entire online presence in the local area.

If you are going to bet on lead gen, you need to adapt yourself to today’s world: The Internet.

Keep in mind that although traditional channels and methods like billboards, warm calls, and pamphlets still work, they aren’t part of your tools. Whenever someone needs a service, they go to Google and search for it.

“Dentist in Miami” or “plumbing services in Orlando,” etc. And you can keep coming up with services or professionals people need and look for. Thus, you need to make sure you’re using Google to get the companies in front of their clients.

Users will always click on the first search results (those near the top), and many of them will be either Ad links (people paid to place their websites there), Map Listing, and then you get websites. Almost all of them are your goal and where you should always aim to place yourself.

Can My Financial Planning Business Utilize a Local Lead Generation Strategy?

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If you want customers, you better know you need it. Following the previous explanation, lead gen is all about placing businesses in front of their customers, choosing them over their competitors.

Put it simply – it’s all about closing deals and having clients for those companies to make money. The main difference with the usual methods companies use for this is how lead generation approaches different channels to get them in the right place of the market to get customers.

Those channels are all focused on the Internet as most people are searching for products but also services across the net. The issue is that the Internet is way too broad, and businesses don’t know how to place themselves. They usually try, but they get one common result: losing money and time.

How Powerful Are Organic Financial Planning Leads from Google?

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For companies looking for customers, it’s everything. For you? Pretty much the same. When you build a business with digital properties, you get to make thousands of dollars a month.

This isn’t a “get started today and get rich tomorrow” thing, but it is HIGHLY scalable, and ROI + positive results are guaranteed. Learning a fairly decent and very needed set of skills to create your digital properties and start ranking them on Google is required.

I have invested in several online businesses over the years, and if there’s something uncertain, whether you will get your ROI or not, even more than the actual profit.

However, this business moved my earnings from five figures a year to a month in ONLY passive income while sitting comfortably at home.

On my laptop. Anywhere. Anytime.

You can look at one of the first sites I built back in 2016, and it continues making me over $1.000+ every month. The best part is that I don’t need to touch it or the rest I’ve built over the years, just like this digital property.

What Makes Lead Generation SO Alluring?

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Here it goes: you can work from home.

The main issue with regular business opportunities is how much you need to invest in staff, equipment, or rent to have a place to sell your products or offer your services.

We all know the hassles of traditional businesses that involve regular expenses, which are extremely high.  Can you afford it? I don’t think so, and even if you can, is it worth it? Now, it isn’t only about the money. You also need to put in a lot of work, and it isn’t only during the first couple of months or years. Usually, it is as long as you continue running it.

You can save yourself those headaches and bone-breaking tasks and expenses with lead gen since it is more about generating leads with digital channels—mainly websites.

Websites can be VERY cheap to build, and with many tools online, you get to do it in a couple of hours instead of days. Any virtual or digital business is scalable and won’t need constant maintenance.

So, let’s summarize this:

  • You save money in regular expenses with traditional and most online businesses as what you need is yourself and digital properties (websites).
  • You can bet on passive income.
  •  There’s no need to hire more people to get started.
  • You can generate leads in multiple industries, which allows you to work on any niche you want.

How Can I Get Started in the Local Lead Generation Program?

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Anyone can start and learn. That’s the beauty of this business model. I knew nothing about SEO, Map Listing, and everything I’ve mentioned so far. It is all about learning the skills, gaining experience, and deciding to take the step.

Remember that this business model will never get old as business owners are always looking for leads. They need to do business and scale their companies. Why not do the same while helping others and still making money?

You can start with this local lead generation course highly recommended for anyone wanting to grow in the business. It is a close training that will take you through each step and make sure you are able to get your ROI, profits and take control of your life.

You will be added to an incredible lead generation family ready to help you 24/7 when asking questions on the group. Anyone is welcome who’s willing to put in the work. Click here to watch the lead gen webinar.

Learn more about local lead generation below.

Take a sneak peek into our proven strategies to build a passive income by building a local lead generation business from your laptop...