Start Your Financial Advisory Business in 9 Easy Steps: Ultimate Checklist

  • SWOT Analysis
  • Business Model
  • One Page Business Plan
  • Value Proposition
  • Home
  • To walk
  • To walk
  • To walk
  • To walk
  • To walk
  • To walk
  • To walk
  • To walk
  • To walk

Starting a Financial Advisory Firm: Your Path to Success

Are you passionate about helping individuals and businesses achieve their financial goals? Do you have the expertise and the drive to make a difference in people’s lives? If so, starting a financial advisory business may be the perfect opportunity for you.

The financial advisory industry is experiencing tremendous growth, driven by the increasing demand for professional financial advice. According to the Bureau of Labor Statistics, the number of financial advisor jobs is expected to grow 7% from 2018 to 2028, faster than the average for all occupations. With a market ripe with potential, now is the time to embark on the journey of opening your own financial advisory firm.

Although the process may seem daunting, we’ve broken it down into nine manageable steps to help you establish a successful financial advisory practice.

But before we dive into the details, let’s take a closer look at the most popular business model in the industry – the fee-based model.

  • What is a fee-based model?

In the fee-based model, clients pay fees for services provided by the advisor. These fees can be a flat fee, an hourly rate or a percentage of assets under management. Not only does this model provide transparency and clarity to clients regarding the cost of services, but it also aligns the interests of the advisor and the client.

As an advisor, your earnings are directly tied to the growth of your client’s assets under management. This inspires you to work diligently in growing their investments, ensuring both their financial success and yours. Also, by eliminating commissions and incentives for recommending specific financial products, you create a conflict-free environment, building your customers’ trust in you.

Now that you have a better understanding of the fee-based model and its benefits, let’s dive into the nine steps you need to take to launch your financial advisory business successfully.

Conducting market research, developing a comprehensive business plan, and obtaining necessary permits are just some of the crucial steps that will pave the way for your business success. By following this checklist, you can navigate the complexities of starting a financial advisory business with confidence and prepare for a successful future.

9 Steps to Starting a Financial Advisory Business: Checklist

Starting a financial advisory firm requires careful planning and consideration. Before launching your business, there are several important steps you must take to ensure a successful and legally compliant operation. Follow this checklist to guide you through the process:

To walk Description Average time (in months) Cost (in USD)
1 Conduct market research and identify target customer demographics 1-2 500-1,000
2 Develop a comprehensive business plan outlining services, target market and competitive analysis 2-3 1,500-3,000
3 Create a financial model that projects revenue, expenses, and growth potential 2-4 1,000-2,500
4 Determine appropriate funding sources, such as investments or loans 2-6 Varied
5 Securing the necessary permits and licenses to operate legally as a financial advisory firm 3-6 500-2,000
6 Register the business entity and obtain all required tax identification numbers 1-2 200-500
7 Partner with custodians and brokers to facilitate asset management services 2-4 1,000-3,000
8 Develop a marketing strategy to attract customers and build brand awareness 2-6 1,000-5,000
9 Hire and train a team of qualified advisors and support staff 3-6 5,000-10,000
Total ,700-,000
READ:  How to Value a Dollar Store Business: A Guide for Buyers and Sellers.

Conduct market research and identify target customer demographics

Before starting a financial advisory firm, it is essential to conduct thorough market research to understand the needs and preferences of potential clients. Identifying your target customer demographic allows you to tailor your services and marketing efforts to effectively reach and serve your ideal customers.

Here are some steps to help you conduct market research and identify your target customer demographic:

  • Define your niche: Determine the specific area of financial advisory services in which you wish to specialize. Whether it’s retirement planning, investment management or estate planning, focusing on a niche will help you attract clients who have specific needs in that area.
  • Analyze Competing Firms: Research existing financial advisory firms in your target market. Understand their strengths, weaknesses, and types of customers they serve. This analysis will help you identify gaps in the market where you can differentiate yourself and attract a specific customer base.
  • Survey of potential customers: Conduct surveys or interviews with people who could potentially be your customers. Ask them about their financial goals, challenges and preferences regarding counseling services. This will provide valuable insight into the value of your target customers and how you can tailor your services to meet their needs.
  • Explore Demographics: Analyze demographics related to income levels, education, occupation, and age ranges in your target market. This information will help you better understand who your potential customers are and how to effectively reach them with targeted marketing efforts.


  • Consider partnering with market research firms or consultants specializing in the financial services industry. Their expertise can provide valuable information and save you time.
  • Attend industry conferences, networking events, and seminars to connect with professionals who can share their experiences and knowledge of target customer demographics.
  • Use online tools and platforms that provide data on consumer preferences and demographics, such as social media analytics or market research databases.

By conducting thorough market research and identifying your target client demographic, you can position your financial advisory firm to effectively meet the needs of your ideal clients and differentiate yourself in a competitive industry.

Develop a comprehensive business plan outlining services, target market, and competitive analysis.

Developing a comprehensive business plan is an essential step in launching a successful financial advisory business. This plan will serve as a roadmap for your business, outlining the services you will offer, identifying your target market and analyzing your competition.

1. Define your services: Start by clearly defining the range of services your business will provide. This can include financial planning, investment management, retirement planning, estate planning, tax planning, etc. Clearly outline the value proposition of each service and how it will benefit your customers.

2. Identify your target market: Determine the specific demographic or market segment you will serve. Consider factors such as age, income level, occupation and financial goals. Understanding your target market will guide your marketing and customer acquisition strategies.

3. Perform Competitive Analysis: Research and analyze other financial advisory firms operating in your area. Identify their strengths, weaknesses and unique selling propositions. Understand what sets your business apart and how you can provide a competitive advantage to potential customers.

By developing a comprehensive business plan that clearly describes your services, your target market, and a competitive analysis, you will establish a solid foundation for your financial advisory firm. This plan will guide your decisions and strategies as you work to launch and grow a successful business.

Create a financial model that projects revenue, expenses, and growth potential.

Developing a financial model is crucial for any financial advisory firm as it helps determine the viability and profitability of the business. This model serves as a roadmap for managing financial resources, setting revenue goals, and understanding the expenses involved.

To create a robust financial model, follow these steps:

  • Describe sources of revenue: Identify sources of revenue, such as client fees, investment management fees, or advisory fees. Determine the pricing structure and estimate the potential revenue generated from each stream.
  • Estimate Expenses: Consider all expenses related to running the business, including employee salaries, office rent, technology costs, marketing costs, and professional services costs. Make sure both fixed and variable expenses are accounted for in your model.
  • Projected Revenue Growth: Analyze market trends, competition, and your target market’s potential to project revenue growth over time. Use historical data, industry benchmarks, and market research to make educated guesses.
  • Monitor Profitability Ratios: Calculate key financial ratios such as gross profit margin, operating profit margin, and net profit margin to gauge business profitability. Regularly review and update these ratios to determine if adjustments are needed.
  • Consider potential risks: Identify potential risks that could impact your financial model, such as regulatory changes, market volatility, or unexpected expenses. Develop contingency plans to mitigate these risks.


  • Consult a financial advisor or accountant to ensure the accuracy of your financial model.
  • Regularly review and update your financial model as your business evolves and market conditions change.
  • Consider creating multiple scenarios in your financial model, such as a best-case, worst-case, and base-case scenario, to assess the potential impact of different outcomes.
  • Use financial modeling software or spreadsheet programs to streamline the process and make adjustments more manageable.

By creating a financial model that projects revenue, expenses, and growth potential, you can better understand your business’ financial health, plan future investments, and make informed business decisions.

Determine appropriate funding sources, such as investments or loans.

Once you’ve done some market research, developed a business plan, and created a financial model, the next step in starting your financial advisory business is determining the appropriate funding sources. This step is crucial because it will determine the financial resources you have to start and grow your business.

Here are some key considerations for determining sources of funding for your business:

  • Assess your personal savings: Before exploring outside financing options, assess your personal savings and determine the amount of capital you can contribute to the business. This will help you understand any additional financing you may need.
  • Consider Investments: Look for potential investors who might be interested in backing your business. Present your business plan and financial projections to demonstrate the potential return on investment. Investments can provide you with additional capital while bringing in experienced people who can offer valuable information and connections.
  • Explore loan options: Research loan options available to small businesses, such as Small Business Administration (SBA) loans or commercial bank loans. Compare interest rates, terms and repayment options to find the loan that best suits your needs.
  • Network with industry professionals: Building relationships with professionals in the financial industry can provide opportunities for joint ventures or partnerships that could contribute to your funding sources. Attend networking events and join industry associations to meet potential partners who might be interested in supporting your business.
  • Consider alternative funding options: Explore alternative funding sources, such as crowdfunding or specific grants from financial advisory firms. These options may provide additional financial support or assistance without requiring reimbursement.
READ:  Invest Wisely: Discover the Benefits of Owning Class A Shares


  • Prepare a thorough and compelling business plan that clearly outlines the potential for growth and profitability.
  • Consider seeking advice from a financial consultant or Certified Financial Planner (CFP) who can provide guidance on funding sources specific to your industry.
  • When approaching potential investors or lenders, demonstrate a solid understanding of the financial advisory industry and how your business will differentiate itself in the marketplace.

By carefully evaluating various funding sources and selecting the most appropriate options, you can ensure that your financial advisory firm has the capital it needs to establish a solid foundation and successfully serve your target clients.

Secure the necessary permits and licenses to operate legally as a financial advisory firm.

When starting a financial advisory firm, it is crucial to ensure that you have all the necessary permits and licenses to operate legally. This step is critical to maintaining compliance with regulatory requirements and building trust with potential customers.

To secure the necessary permits and licenses, consider the following:

  • Research Applicable Regulations: Familiarize yourself with the regulatory landscape for financial advisory firms in your jurisdiction. Understand the specific permits and licenses required and any conditions or qualifications you must meet.
  • Consult Legal Experts: Seek advice from a lawyer or legal consultant with experience in the financial services industry. They can provide valuable information about the specific permits and licenses you need and help with the application process.
  • Complete the necessary applications: Obtain and complete the required application forms for permits and licenses. Pay attention to any documents or support fees that may be required.
  • Submit Applications: Submit your completed applications to the appropriate regulatory bodies or government agencies. Make sure all required documents and fees are included.
  • Meet ongoing regulatory obligations: After obtaining the necessary permits and licenses, you must meet ongoing compliance requirements. Stay informed of any regulatory updates or changes that may affect your business and take the necessary steps to stay compliant.

Tips for securing permits and licenses:

  • Start the process early: Permit and license applications can take time to process, so it is advisable to start the application process as soon as possible.
  • Stay Organized: Keep track of all documents, communications and deadlines related to your permit and license applications. Create a system that allows easy retrieval of information when needed.
  • Seek help if needed: If you find the application process complex or overwhelming, don’t hesitate to seek help from professionals who specialize in navigating regulatory requirements.
READ:  Understanding the Operating Costs of Starting a Jack in the Box Franchise

By obtaining the necessary permits and licenses, you demonstrate your commitment to operating within the legal framework and upholding the highest standards of professionalism and ethical conduct. This helps establish credibility and trust with potential clients, laying the foundation for a successful financial advisory firm.

Register the business entity and obtain all required tax identification numbers.

Once you have conducted market research, developed a business plan and determined the sources of funding for your financial advisory firm, the next step is to register the business entity and obtain the required tax identification numbers. .

Business Entity Registration:

First and foremost, you need to decide on the legal structure of your business. It could be a sole proprietorship, a limited partnership, a limited liability company (LLC) or a corporation. Each legal structure has its own advantages and disadvantages, so it is important to consider factors such as liability protection, taxation and ease of management.

Contact your state’s secretary of state to understand the specific requirements and procedures for registering your chosen legal structure. They will guide you through the necessary documents, fees and deadlines.

Obtaining tax identification numbers:

An Employer Identification Number (EIN) is a unique nine-digit number issued by the Internal Revenue Service (IRS) to identify your business for tax purposes. Even if you don’t plan to have employees, obtaining an EIN is important for opening business bank accounts, filing taxes, and performing other financial transactions for your business.

You can easily apply for an EIN online through the IRS website. The process is simple and you will receive your EIN immediately upon completion of the application.


  • Research the specific requirements for registering a financial advisory firm in your state, as regulations may vary.
  • Consider consulting a lawyer or tax professional to ensure compliance with all legal and tax obligations.
  • Maintain organized records of all registration and tax records for future reference.

By registering your business entity and obtaining the necessary tax identification numbers, you establish the legal framework and financial identity of your financial advisory firm. This step is crucial to ensure compliance, gain credibility with customers, and operationalize your business.

Partner with custodians and brokers to facilitate asset management services.

A critical aspect of starting a financial advisory firm is building partnerships with custodians and brokers. These partnerships are crucial as they allow the company to provide asset management services to their clients. Custodians are responsible for safeguarding client assets, while brokers facilitate the buying and selling of securities on behalf of the business.

Why are these partnerships important?

By partnering with custodians and brokers, your business has access to a wide range of investment products and tools. This allows you to offer a diversified portfolio to your clients, tailored to meet their individual financial goals and risk tolerance.

READ:  Bingo Hall Success: Boost Sales and Profits with These Winning Strategies!


  • Research and select reputable custodians and brokers who align with your company’s values and target market.
  • Make sure the custodians and brokers you choose offer a robust technology platform that integrates well with your business systems.
  • Consider the fee structure of custodians and brokers and the level of support they provide to your business and your clients.
  • Establish clear communication channels and build strong relationships with your custodians and brokers to ensure smooth transactions.

Also, partnering with reputable custodians and brokers can enhance your company’s credibility and reputation in the industry. Clients will feel more confident about entrusting their assets to your firm when they know their investments are held by a trusted custodian and executed by a reliable broker.

As you establish these partnerships, it is essential to carefully review agreements and contracts to understand the terms and conditions, including the associated costs. By doing so, you can ensure that the partnership aligns with your company’s vision and goals while providing the support needed to deliver exceptional asset management services to your clients.

Develop a marketing strategy to attract customers and build brand awareness

Developing a well-rounded marketing strategy is crucial to the success of your financial advisory business. This strategy will help you attract customers and build brand awareness in a competitive market. Here are some key steps to consider when developing your marketing strategy:

  • Identify your target audience: Determine the specific demographics and psychographics of your ideal customers. This will help you tailor your messaging and marketing efforts to resonate with your target audience.
  • Create Compelling Content: Develop informative and valuable content that addresses pain points and challenges faced by your target customers. This can include blog posts, articles, white papers, videos, and podcasts. Be sure to highlight your expertise and differentiate yourself from competitors.
  • Establish an online presence: Develop a visually appealing and user-friendly website that showcases your services, team members, and successes. Optimize your website for search engines to improve your online visibility. Additionally, leverage social media platforms to engage with your target audience and share your valuable content.
  • Create strategic partnerships: Collaborate with complementary businesses, such as estate planning lawyers or accountants, to establish mutually beneficial referral partnerships. It can help generate leads and expand your network.
  • Attend industry events: Attend conferences, trade shows, and networking events to connect with potential customers and industry influencers. This will also allow you to present your expertise through speeches or round tables.
  • Offer Educational Seminars: Host informative seminars or webinars to educate potential clients on various financial topics. This not only positions you as an expert, but also allows you to build credibility and trust with attendees.
  • Leverage testimonials and reviews: Collect testimonials and reviews from happy customers and feature them on your website and marketing materials. Positive feedback from previous customers can significantly influence the decision-making process of potential customers.


  • Use targeted online advertising platforms, such as Google Ads or social media ads, to reach your specific audience.
  • Regularly analyze and measure the effectiveness of your marketing efforts using key performance indicators (KPIs) such as website traffic, lead conversions, and customer acquisition.
  • Stay up to date with industry trends and regulatory changes that may impact your marketing strategy.
  • Consider hiring a marketing consultant or agency specializing in the financial industry to provide advice and expertise.
READ:  Explore Key Performance Indicators for Tailless Salon Businesses

By implementing a comprehensive marketing strategy, you can effectively attract clients, build brand awareness, and position your financial advisory firm as a trusted industry leader.

Hire and train a team of qualified advisors and support staff.

Building a team of qualified advisors and support staff is crucial to the success of your financial advisory practice. It is important to carefully select people who have the qualifications, expertise and skills to provide exceptional service to your customers. Here are some steps to help you hire and train the right team:

  • Define roles and responsibilities: Clearly outline the roles and responsibilities of each team member to ensure appropriate division of labor and clarity in expectations.
  • Establish Hiring Criteria: Develop a set of criteria to evaluate potential candidates, including their educational background, certification, work experience, and background.
  • Advertise job openings: Use multiple channels, such as online job boards and professional networks, to attract a diverse pool of applicants.
  • Curate Resumes and Interviews: Review resumes and shortlist candidates who meet hiring criteria. Conduct in-depth interviews to assess their skills, knowledge, and cultural fit.
  • Provide Comprehensive Training: Develop a training program that covers the necessary skills and knowledge needed for the job. This could include financial planning techniques, investment strategies, and client communication skills.
  • Promote continuous learning: Encourage continuous professional development through seminars, workshops and industry certifications to keep your team up to date with the latest trends and regulations.
  • Foster a Positive Work Environment: Create a supportive and collaborative work environment that values teamwork, open communication, and a strong work ethic. This will help foster employee satisfaction and retention.


  • Consider hiring advisors who specialize in different areas of financial planning to provide a full range of services to your clients.
  • Provide mentorship and ongoing coaching to help your team members excel in their roles and achieve their professional goals.
  • Regularly review the performance of your team members and provide constructive feedback to help them improve.
  • Consider hiring support staff with strong organizational and administrative skills to ensure smooth operations and efficient customer service.

Remember that hiring and training a team of qualified advisors and support staff is an ongoing process. Continuously investing in the development of your team will contribute to the long-term success of your financial advisory firm.


Starting a financial advisory firm requires careful planning and execution. By following these 9 steps, you can successfully open your own business and start serving customers in the fee-based model. Perform extensive market research, develop a comprehensive business plan and create a financial model for the growth potential of the project. Secure necessary licenses and permits, register your business entity, and partner with custodians and brokers. Develop a strong marketing strategy to attract customers and build brand awareness. Finally, hire and train a competent team of advisors and support staff. With dedication and commitment, you can launch a successful financial advisory business and help clients achieve their financial goals.