Now is a great time to get into the financial planning business. Many people are planning for or getting into retirement and need experts to make sound financial decisions about their future. Studies have also shown that millennials tend to favor traditional financial advisors over automated options, which should guarantee demand in the next coming years. However, the financial planning industry is tough to get into and has many regulations.
But, if you plan properly, you’ll be able to capitalize on the great possibilities this market offers. Let’s take a look at how you can start a financial planning business in five steps.
Start Looking at Startup Costs and Licensing
First, you must study the business model and how you will make money. You also need to start looking at your startup costs. Know that you’ll have to become a certified RIA (registered investment advisor) to lawfully operate as a financial planning firm. You can then expect to pay anywhere from $10,000 to $20,000 in startup costs on things like office space, legal documentation, and vendor fees. You’ll also need to contract a good custodian service.
Find a Name and Create a Legal Entity
You will then need to find a name and verify that it’s not already taken. Check your state’s business records, state and federal trademark records, social media platforms, and run a domain search as well. It’s very important to register the domain name as soon as possible if it’s not already taken. You will then need to choose the proper structure for your business. Starting as an LLC is the simplest option and will protect you from personal liability, but S-corps are also very common in this space, so look at the specificities of each and see which one would be the best for you.
Register for Tax and Open a Bank Account
You will then need to get your employer identification number (EIN) from the IRS. The EIN is like a social security number but for businesses. You will need it to register for the variety of federal and state taxes you’ll be subject to. You must learn what those are too and how they need to be collected and filed.
Find a Location
Once you have your paperwork in order, you will need to find a location. Some of the best locations for financial advisor firms are strip malls with lots of foot traffic and centrally located buildings that house other related services.
Market Your Firm
Now comes probably the toughest part of running a financial planning business – getting clients. These days, one of the best ways to attract clients is by using content marketing. Bringing clients to you through valuable and meaningful content is the best way to show your expertise and hopefully convert a few clients on the back end.
Digital marketing for financial services deserves a blog in itself, but you can learn more about marketing strategies for financial advisors in this helpful article. You’ll learn about things like search engine optimization and pay-per-click advertising which could allow you to harness the power of search engine traffic.
These are the steps you’ll need to take to get your financial planning business off the ground. The rest is all about giving your clients the best service possible and looking after their best interests.
