Creating Your Financial Advisor Business Plan: Tips for Success
A business plan is a bit like a roadmap that outlines your business goals and the strategies you'll use to achieve them. It guides you through each step of the process and ensures that you never miss an important stop along the way.
If you’re a business owner or entrepreneur, you might already be familiar with business plans. But as financial advisors, you may have never learned that you’ll need one—and certainly not how to create one.
So in this article, we’ll show you the key elements of a business plan, as well as how to make sure that your business plan will be useful and not just gather dust somewhere.
Key Elements of a Financial Advisor’s Business Plan
There are reasons why companies create business plans. Some startups create business plans when they’re trying to get funding to show their potential as a company. Some do it to measure their success and adjust their plans as needed.
Both are legit reasons, but the most important reason might be that companies with business plans have a 30% higher chance of growing. Businesses with a plan know their priorities, and written plans cement their tasks in a set timeline and context.
The same applies to financial planners. At the end of the day, building your career as a financial advisor is similar to growing a small business.
You need to attract people to your financial services, create an outstanding experience to retain clients, and build your authority in the industry.
You can find plenty of financial advisor business plan templates online, but here are the key elements that should be included in your business plan:
An executive summary is a brief overview of your business plan. Executive summaries provide your potential management team or investors with an overview of your objectives and plan. The goal is to make your summary interesting enough to make them want to learn more about your advisory firm and future plans.
Business descriptions and mission statements outline who you are, what you do, and why you’re offering your services. This is a good place to weave in your value proposition.
Target market analysis helps you describe your ideal audience. Aside from demographics, you should also include information that will provide more context for your plan. For example, you may include what your target market needs help with and the characteristics they often have. You can also share a competitive analysis so you know who your potential users currently prefer and what they think about said competition.
The services and pricing section is where you’ll describe your offers and packages, including the time and money investors will have to dedicate and the value they’ll get from working with you. Show how you can bridge the gap for your clients—from where they are right now to where they want to be after experiencing your services.
An operational plan outlines everything you need to run your financial advisory business. This includes your business structure, location, equipment, software, compliance requirements, and staffing needs.
Your marketing/sales strategy shows how you plan to get more clients through the door. Outline the whole process, from how you can attract prospects into your world to how you convert those interested into long-term partners.
Financial projections should be something you’re familiar with. This includes a forecast of your KPIs, cash flow, revenue, expenses, and profitability over the next three to five years.
Having a risk analysis/mitigation plan will help you identify potential threats to your business. After you know what might hinder your progress, you can develop a plan to solve the problems that might stand in your way.
Tips for Creating an Effective Financial Advisor Business Plan
It’s easy to fall down the rabbit hole and create ineffective plans that you’ll forget after a couple of weeks. Here are a few tips to help you create—and implement—plans that will work for your advisory business.
Start Simple
While the complexity of the financial planner business plan would vary depending on your objectives, it’s best to start simple if you’re starting from scratch.
Rather than getting stuck on creating the perfect plan, try to create a minimum viable plan that will give you a starting point.
In any case, your business plan is a living document, so it’s not necessary for the first version to be perfect.
More importantly, you need to make sure that everyone who will contribute can understand your plan. Avoid industry jargon as much as you can and prioritize clarity over anything else.
A simple, actionable plan will help everyone follow and execute your vision.
Carefully Research Your Target Market
Knowing your target market is the foundation of your business plan. The more you know about your target market, the better your financial planning business plan will be.
As a financial advisor, you need to know about your clients, including things like what clients are looking for when they work with you, their thought process, and the requirements when they’re looking for a financial services provider.
A more specific definition of your target market will help determine your niche and create a more focused and effective business plan.
Let’s say you’ve chosen wealth management as your niche as most of your clients are high-net-worth individuals who are looking for guidance on how they can grow wealth. Once you know their goal and challenges, you can adjust your current offers accordingly.
In addition, you can configure your business plan to prioritize your client’s success and preferences using this data.
If you know that your target market usually does their own research before seeking help, being active on finance forums will land you in front of your ideal clients. Build your authority and focus on highlighting your experience, but don’t try to go for the hard sell right away—let them do their research.
Try to be as specific as possible when defining your target market. Of course, you need to make it realistic as well, so you will need to do a lot of research to accurately describe your ideal client.
Establish a Unique Value Proposition
As the industry becomes more competitive by the second, differentiating your services from others is becoming more important.
This is where your unique value proposition comes in.
To put it simply, a unique value proposition is the reason your clients choose you among the endless other options they have.
A unique value proposition separates you from your competitors, including from other financial advisors, DIY solutions, or robo-advisors. It helps you position your services as the only option to achieve their financial goals.
Implementing your value proposition in your business plan will help you emphasize this difference across everything you do. This makes it more evident to clients who connect with this value proposition that you’re the right partner for them.
Let’s say that your value proposition is creating personalized plans that make it effortless for clients to reach their financial goals.
With this in mind, you can create a business plan that’s dedicated to doing just that. Use tools that make it easier for clients to work with you, like Asset-Map. Streamline each of your client touchpoints into experiences that clients will look forward to.
In addition, you can present your advice as a visual map using Target-Map so your clients won’t have to process their financial plan on their own. Turn client meetings into a collaborative experience to make things more rewarding for your clients so they don’t feel like they’re expending too much effort to work with you.
Develop a Strong Marketing Campaign
There’s a section to outline your marketing and sales strategy in your business plan—make sure you don’t forget about it! Your target market and value proposition are a foundational portion of your business plan. But your marketing strategy is the fruit of those efforts that will help you get more clients through the door and grow your business.
Naturally, your prospects need to know about your services before they can consider doing business with you.
Create a detailed marketing plan that will work for your business instead of against it. To start with, you should pick marketing channels that will allow you to build authority with your audience or have a higher success rate.
For example, you can build your authority with content marketing and social media. Make sure that your ideal audience can connect with you through these channels. For content marketing, you can lean on search engine optimization (SEO) to increase the likelihood that your target market can find you through search engines. Figure out topics your clients care about through customer research and share your expert insights about these things.
Regularly Update Your Business Plan
Your business plan is not a static document.
It's not something you write once and then store in a Google Drive folder for a lifetime. You’ll need to revisit these documents and update your business plan as you grow.
Just like how your goals change, your business plan will also adapt as things change in your business. That isn’t the only factor either; changes in market trends and your client’s needs and goals will also affect your business plan
It’s essential to regularly review and update your business plans so it still aligns with the situation you’re in.
For example, when you start your advisory, your priority might be to gain loyal clients so you can collect case studies and proof of your expertise. But as you grow, you won’t need to prove your expertise as much, so your focus may shift to increasing your assets under management (AUM).
Or maybe your inbox is too busy with inquiries. You might want to switch to gaining new clients through referrals only to narrow your clientele. Alternatively, you can look for additional advisors to keep up with the demand.
Whatever your next plan of action may be, your business plan should reflect your current situation for it to be effective.
Track Your Financial Advisor Business Progress With Asset-Map
A business plan isn’t mandatory for your business, but having one makes it much more likely for your advisory to grow.
That said, creating a business plan is just the first step. The hard part is actually using your business plan to guide your decisions.
Most business plans aren’t practical. While they’re great for communicating your intention, the document usually isn’t good enough when you need to revisit and revise it time and time again.
Asset-Map makes it easy for you to monitor your progress as well as your clients' financial health vs. your business plan using intuitive visual maps. When it’s easy to track your business and client progress, you’re more likely to follow through with the business plan you’ve created.
Get your demo and see how Asset-Map can help you guide your business in the right direction.