How To Start A Financial Advisor Business

Many times, as a financial advisor, you may be saddled with questions about how to start a financial advisor business. Well, this article will show you all you need to know concerning how to start a financial advisor business.

A financial advisor is an expert or professional that helps you decide on what to do with your money at a particular time. This decision has to do with investments, insurance, tax, savings, etc.

Regularly, a financial advisor checks in with the clients to know if they are enjoying their services and what needs to be upgraded, and also makes sure that the clients’ needs are met.

To be exceptional in the field, you need to have a strong foundation in mathematics, statistics, and software packages like Excel, SQL, etc.

Are you interested in being a financial advisor and want to run your own financial advisor business? Then you will have to consider how to build a financial advisor business and that way you know what you are signing up for.

If you are still interested after reading this article, then you are ready to set up your own business.


Being a financial advisor is a lucrative job especially if you are doing it in the long term. No matter how strong you are in the required subjects, you still need some important certifications to be recognized by clients.

There are a few steps that you will need to follow to have your financial advisor business up and running. If you want to know how to start a financial consulting business, then consider the steps below.

#1. Plan:

When there is a definite plan, success is guaranteed for any business owner. A good plan helps you know the hidden things in your business and also helps the employees to know the vision and mission of the company.

There are different business entities and I will mention the most common among all: sole proprietorship, partnership, limited liability company, and corporation.

There are advantages and disadvantages of each of these legal entities and you need to study them to know which one is best for your financial advisor business.

#3. Registration:

This is also part of how to start a financial consultant business. You must register your business at the state and federal levels to prevent being shut down by the government for not paying taxes.

You will be taxed depending on the type of legal entity you chose.

#4. Open an account:

This is normally the next step a business goes through because you will be required to bring a document from the government to prove you have registered with the government.

#5. Licenses and permits:

This is one of the most important things to consider when building your financial advising business. You will need to acquire certain permits and licenses from the state and federal government for you to run a safe and trusted business by your clients.

#6. Insurance:

If you want to protect your business from corporate evil, then you should consider this particular step. General liability insurance is the most common type of business insurance and it is very necessary to take out this insurance.

You should also consider workers’ compensation insurance. This is also good since you will have employees and it is required by some states as well.

#7. Contact system:

Establishing a contact system is very important for any business and this contact system can be in the form of websites, phone systems, or social media. You should have a regular contact address for your audience such that they can reach you at any hour of the day.


We often think about how to start a financial advisor business but we haven’t considered the costs of opening the business. It will cost about $10,000 to $20,000 for a normal financial advisor startup business.

This amount is just for the basics such as rent and maintenance but aside from both of them, you will have to consider the insurance, labor cost, account maintenance, etc.

It is just for the startup cost but the important thing is to source for clients because when you start a business with $10,000 or $20,000 and in a month you are paying out a salary of over $70,000 then the business will fold in a few months. 

A financial advisor who is competent enough and wants to start a financial consultant business should know that customers are the live wire of a business.

A financial advisor can charge up to $1500 to $10,000 depending on the customer’s portfolio and considering this amount, you can score a steady 10 clients every year for a startup company with fewer employees.

Generally, it will cost more than $20,000 to start a big financial advisor business and it is going to demand more funds for the employees and for yourself too.

Therefore, you will need about $200,000 for the first year with minimum employees and minimum wage to keep the business up and running.


Choosing financial advisory as a career is a very lucrative one. You can charge a client about $1500 to $10,000 for a job.

In relation to the job description of a financial advisor, he gets a percentage from the insurance a client buys, from the investment a client makes, and also from the tax a client pays.

So on a professional level, a financial advisor makes about $154,000 yearly and that is a huge sum, an entry-level advisor earns around $57,000 yearly, and then the average level earns about $87,000 annually.

According to statistics, it is known that the stress level attached with the job of a financial advisor is above average, while the flexibility is average and then the mobility is also above average.

The more you work as a financial advisor, the more successful you become and most of the workers in the financial advisors’ office are above 60 due to the level of stress attached to the job.


There are different organizations you can belong to as a financial advisor and it can be beneficial to your career and the growth of your company. Such organizations include:

  • The Financial Planning Association(FPA).
  • The National Association of Personal Financial Advisors(NAPFA).
  • National Association of Insurance and Financial Advisors(NAIFA).
  • The Association for Financial Professionals(AFP)
  • The CFP Board.

The Financial Planning Association (FPA) is for professionals in the finance sector. If you are a financial planner looking for a community of like minds, then the FPA is right for you because everyone in the community joins for one reason or the other. It could either be for education, for support, for advocacy, etc.

To join this association will cost about $395 yearly although it changes depending on your location. If you are thinking of how to build a financial advisor business, then try joining this association. It will help your business. 

The National Association of Personal Financial Advisors (NAPFA) is an association representing many financial firms from startups to big conglomerates managing billions of dollars.

Members of this association swear an oath yearly to uphold the ethics of NAPFA. This membership costs about $35 for full-time students while financial advisors pay about $695.

The National Association of Insurance and Financial Advisors (NAIFA) is the only association that represents both insurance advisors and financial advisors.

Their members are insurance agents, financial advisors, and employee benefits specialists. They help your business grow and also make sure your company obeys the code of ethics in the industry.

Membership of this association costs about $10 per month for new members while professionals in the business with over five years’ experience pay $56 per month.

The Association for Financial Professionals (AFP) is for professional financial planners.

The benefits of this association include an online and in-person community, live and on-demand training, they also help you with your career decisions as well as tools and resources for work.

Every year, members of this association pay $495 as a membership fee.

The CFP Board is not an association for professionals nor does it offer help to upcoming CFPs. It is just a forum to help connect aspirants to certificate holders. All you have to pay is the exam fee which is $825 and you can get the resources for free.


These people are in charge of meeting up with clients and giving them financial advice concerning their retirement plan, investment, or insurance.

This job requires a lot and as such the pay is quite attractive, for those who wish to know how much a financial advisor makes.

The average financial advisor makes $87,000 annually while an expert level advisor earns about $154,000 annually then an entry-level advisor who is just fresh out of school makes about $57,000 annually.

The pay varies depending on how long you have served in the business and your level of expertise and experience as well.

When compared to other jobs, financial advisors earn more or less than insurance brokers, marketing managers, financial analysts, and compliance officers.

An average level insurance broker earns $67,000, an average compliance officer earns $72,000, an average financial analyst makes $94,000 then an average marketing manager earns $149,000.

FREQUENTLY ASKED QUESTIONS on How to start a financial advisor business

Financial advisors charge their clients either annually, hourly, or a flat fee. While those involved in investment earn commission from the investment they sell.

A financial planner helps an organization to meet its short or long-term financial goals while a financial advisor helps an individual or organization manage their investments.

To become a financial advisor you have to be licensed, have a relevant first degree or more, pass a professional exam. If you can’t meet these requirements, then you are not ready to become a financial advisor.

It will take a minimum of nine months to complete a certification. Whether or not you have a relevant degree, or you are just fresh out of school, once you have completed a certification you have a chance of landing a job.

This job is among the best you can find out there and also one of the best paying jobs.


It is expected that you have known how to start a financial advisor business after reading through this article. So many financial advisors have acquired technological skills because it is a necessary tool for them to make work easier, faster, and accurate.

Most investors don’t just judge from what is in your head but from the office, you work in.

For example, I once worked in an insurance company that never bothered to change the worn down vehicle their marketers use and they never knew that potential clients believe in “first impression” but when your company’s car doesn’t even speak well of your company then they can’t trust you to handle their insurance. 

Technology to a financial advisor is not just a mere tool but a strategic one at that. And you need to as a financial advisor capitalize on technology to make your work easier and faster.

As a financial advisor, you don’t have to jump to making profits so fast and forget to satisfy clients. You should consider your priorities, always be up to date with the laws guiding the financial sector, and always be up to date with the latest technology meant for your job.



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