Choosing to open your own financial firm is a big decision. In our last blog post, we touched on a few of the benefits of starting your own financial advisory practice. Though the benefits that we covered are legitimate advantages of starting your own practice, it’s important to note that it’s not something you can do overnight. Being able to be your own boss is a fantastic opportunity, but you want to make sure that you have a thorough understanding of everything it is going to take to open up your own practice.
In the next couple of blog posts, we are going to touch on a few tips that can help get you to a good starting point with opening your own financial advisory practice. From the expenses that you should be prepared to handle to the types of things that you will want to take into consideration along the way, our goal is to provide you with some additional information to help make this dream a reality. Let’s dive in.
The Initial Costs
As a financial advisor, you know that there are going to be a handful of costs that come with choosing to open your own financial advisory practice. Though the advantages can definitely get you excited about choosing to make this move, you want to make sure that you’ve spent some time laying out the costs and figuring out how you’re going to afford it.
From the cost of purchasing or leasing a building for your practice to the cost of employees, and everything in between, you need to spend some serious time sitting down and figuring out just how much opening your practice is going to cost. One of the biggest mistakes made by new business owners is low balling their expenses and winding up bankrupt.
Again, a private financial advisory practice is going to require the same thorough business plan that any start-up business would. A comprehensive business plan is something that every successful business starts with, which is precisely why you want to spend some time figuring out what you really want the focus to be for your business.
The business plan that you create is something that can be quite time consuming, especially when it’s done right. In most cases, there may even be revisions that you make to get it to a place where you are genuinely proud of the plan you’ve created. Some of the topics that you’ll want to take into consideration when creating your business plan will be:
- Goals of the business
- Strategies on how to achieve said goals
- Mission statement
- Demographics of potential clients
- Marketing and advertising plans
- Facility arrangements
- Primary competitors
- Initial costs factored
The points that we’ve listed above are definitely ones that will have a significant role in your business plan, but there may be additional factors that you need to figure out. If you feel as if there’s something that separates your business from other financial advisory practices, include that in your plan. Ultimately, let this be a resource that helps provide you with the success you’re seeking.
If you choose to open your own financial advisory practice, you are definitely going to need to figure out how to obtain licensing. Aside from that, you’re also going to want to look into the type of training that you’re providing members of your team with. These are both critical parts to running a successful financial advising office, and will also contribute significantly to the reputation that you have.
There are also some forms of licensing that can be nice for one or more members to have within the office. Whether you have someone that is a Certified Financial Planner or an advisor that specializes in retirement plans, looking into the various certifications associated with each position is definitely worth doing. Though it may seem like an additional cost up front, this is something that will help build your client base and can help ensure that your business is a reputable one.
Learn About Alpha Droid
Choosing to open your own financial advising practice is a tough thing, which is why there are so many steps that need to be taken into consideration along the way. Alpha Droid may not be able to help with everything, but we certainly can help by providing you with an incredible resource for your team to use.
The tools that you incorporate into your financial advising firm are yet another factor that you should spend some time looking into. Alpha Droid is a calculated algorithm that was designed with financial advisors in mind. This particular software provides financial advisors with updates on current market trends so that they are prepared and able to provide their clients with the very best service available.
If you’re starting your own financial advisory practice, adding Alpha Droid to your toolbox is a decision that you will be thankful for years to come. Learn more about the software that we’ve designed and start a 30-day free trial to get a feel for it. If you have any questions or inquiries, feel free to reach out to our team. Otherwise, keep an eye out for our next blog post, where we continue this series. We will touch on additional things that you need to be prepared for when you choose to start your own financial advisory practice so that you have the pieces that you need to build a strong foundation.