How To Start A Financial Planning Business | Easy Steps to Follow

Starting up a financial planning business has been the dream of most financial planners.

This article on how to start a financial planning business is especially for financial planners who want to work independently but do not know how to start a financial planning business. 


Financial planners are financial experts saddled with the responsibility of helping businesses and individuals to invest their money wisely. They do this by analyzing financial products such as budgets, insurance, etc.

Because of their broad knowledge of finance, they play a very vital role in the business world.


While the concept of finance could be a very daunting one, a lot of financial planners are still thinking of how to start a financial planning business. However, that is what this article is just all about. 

As a financial planner who wants to start up a good financial planning business, keep in mind that you must sell beyond products and services.

By this, we mean you should be able to affect the lives of people on money and transform their mentality about money by exposing them to the nitty-gritty of financial management.

Check Out: What Licenses Do I Need to Start a Business?

How to Start a Financial Planning Business

A financial planning business is a venture that helps people plan their financial goals and plan how to achieve them. 

People who work as financial planners help their clients to plan their budgets, investments, insurance, etc. financial planners also act as financial coaches or guides to their clients. 


A financial planning business is important because it helps people to think deeply and seriously about how money works and how it affects the surrounding people. Starting up a financial planning business is not as difficult as you think. 

So, if you still have that dream of building a financial planning business of your own, then follow the steps below to know how to start a financial planning business. 

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1. Plan The Business

Kicking off our list of how to start a financial planning business is planning. For every business to succeed, planning is essential.

It gives you a draft of what you want your business to be like and helps you discover the things you don’t know yet as well. When there is a clear plan, it makes everything easy to execute. 

At this stage, you should consider some factors like the startup cost, the expenditure involved, how much profit you will make, your target market, the service fee you will charge your customers, your business name, and ways to make your business profitable. 

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2. Startup Cost

To run a financial planning business you have to think of the cost associated with running such a business. This cost includes certification costs and running costs.

As a financial planner, you have to register as a registered investment advisor(RIA) with your state. Your startup cost will also be around $10,000 to $20,000. This includes your rent, legal documentation, etc.

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3. Expenditure Involved

This includes costs associated with the upkeep of the business such as insurance, rent, account maintenance, and labor cost for the staff.


4. Target Market

The target market for this business is usually the middle earners but it is also known that in business, you should go for those who can afford the services.

However, in this case, it is not the middle earners but the high net worth market because they have money to invest and can also afford the services of a financial planner.


Ways to Make your Business Profitable

As a financial planner, you make money through the service fee you charge your clients. You can also charge your clients a percentage of their assets for management.


The service fee you will charge your customers

The standard fee for investment management is between 1% to 2%. Asides from investment, other plans can cost between $1800 to $10,000 depending on the client’s portfolio.


1. Business Name

A business name is very important for every business and it is challenging to get one. This is because your business name should send a message to your clients concerning your brand and it should make them like and trust your brand.

Before registering your business, visit the national and state records to search for the names you have in mind, social media platforms, and web domains.


This is the next entry on our list of how to start a financial planning business. At this stage, you will have to consider the kind of business you want.

Is it a sole proprietorship, limited liability, or corporation? Decide the one you want.

Creating a business entity is very crucial for every business and if you choose LLC or corporation, it will protect your business from financial court cases.


3. Register for Taxes

Here’s another important part of how to start a financial planning business. When it comes to taxes, every country and state has a portion of tax allocated to them.

Pay your tax, it could be either a federal tax or state tax before you can even begin operating your business.

Every business has a tax they pay and these taxes are shared differently between a sole proprietorship and a corporation.


4. Open a Business Account

Every company requires an account for smooth operations and asset protection. When you use the same account with your company, it can affect your assets in a case where you are sued.

There are benefits of opening a business account for your business and there’s no doubt that this should be on our list of how to start a financial planning business.

These benefits include:

  • It separates your personal properties from that of your company.
  • It makes accounting and taxing easier.


5. Create an Accounting Record

A company needs to have an accounting record because it helps during taxing, auditing, and budgeting as well. This should not be neglected when planning how to start a business in financial planning.


6. Get the Permits and Licenses

At this level, you are required to acquire permits and licenses either from the state government or the federal government.

If these licenses and permits are not obtained, then you will have to pay heavy charges for operating without a permit and license and your business can be shut down at some point.

Therefore, you shouldn’t make the mistake of ignoring this when planning how to start a financial planning company.


7. Insurance

In planning how to build a financial planning business, insurance should be considered. As much as your business needs permits and licenses, it also needs insurance for proper operations.

This insurance protects your business from financial issues in case of loss. The different kinds of insurance for businesses are General Liability Insurance and Workers’ compensation insurance.

These insurances are both needed for the smooth operation of every business.


8. Define your Brand

Your brand should not be left out while planning how to build a financial planning business. What impression do you want to give to your customers?

This is an important question to ask yourself when defining your brand. Remember, every company needs a brand because it shows what your business stands for and how the public sees your business.

If your brand has a strong impression, then it will stand out from your competitors.


9. Create a Website

This is another entry on our list of how to start a business in financial planning. This phase is carried out after you must have defined your business.

When creating a website, you have to consider the user interface and user experience because your clients need to have a smooth and easy experience while using the website.

Having a website makes your company look legitimate. You can also create a Facebook page, a LinkedIn business profile, an Instagram handle, etc.


10. Set up your Business Phone System

This is the last phase you need to consider when setting up a financial planning business. It will be bad when a client needs your service but can’t contact the business.

Therefore, you should have an official phone number worth which your customers can reach your business directly.


Benefits of Having Financial Planners

Apart from the above steps on how to start a financial planning company. There are also benefits of having a financial planner work for you and these benefits are:

  • To keep you and your business in check during your plan, whether savings or investment.
  • To help you create a monthly or yearly budget for your pension, savings, or investments.
  • They help reduce financial risk for their clients.
  • They help their clients manage crises in their business or investment.


All these are the benefits of having a financial planner work for you and it helps if you can afford their services. This is why financial planners work hard to get high-net-worth clients.


There are skills required to build a good and fast-growing financial planning company and they are; formal education and training, money management skills, the capability to give explanations of complex concepts to clients, a good understanding of financial mathematics, financial markets, and their importance to human beings.

These firms also carry out day-to-day activities like focusing on Assets Under Management(AUM) because the more assets they manage the more money they make. They also bring in new clients by holding meetings, emails, and even through current clients.


Although the business is lucrative depending on the clients you have, not everybody is meant to run this kind of business.

As a managing director of a financial planning firm, you have to be able to work long hours, love anything concerning finance, have an interest in human psychology, and also have a high level of self-control and discipline.

For example, a client may need help controlling the way he spends money but because you didn’t understand that, you go ahead to invest the money which may be against the will of the client.


Frequently Asked Questions

It is important because it helps guide our day-to-day decision-making either in our business or in our personal lives.

It says that 70% of your earnings are for your monthly expenses, 20% is for saving and investment, and the other 10% goes to debts or donations.

The first key component is understanding your cash flow. Knowing your cash flow gives you the chance to apply the 70 20 10 rule of money.

This is the construction of budgets and then using them to control the operations of your business. Before you start budgetary planning, you need to first construct a budget.

Budgeting is what your financial picture looks like now and helps you choose how to spend and save every month, while financial planning is the bigger picture of your finances over time.

The most important part of financial planning for a client is budgeting. You may find it easy to set a budget, but sticking to it is another issue.


We have looked at how to start a financial planning business anywhere in the country. A professional financial planner can handle more than 200 clients without hiring help but can still hire when they deem fit.

You can also seek a mentor because running a financial planning business is not as easy as it seems. 

One person can handle a financial planning firm and can grow into a multimillion-dollar company.

Examples of firms that grew from one-man teams to million-dollar firms and they are Blue Ocean Global Wealth and Edelman Financial Services.



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