Published On: Mon, Jan 9th, 2017

Your Guide to Opening an Independent Advisory Firm

Financial advisors are in constant demand; there will always be individuals that need guidance on managing their finances and investments, from those just starting out in their careers to retirees looking to make the most of their savings. According to recent statistics, over 10,000 U.S. residents will reach retirement age, every single day, for the next 15 years. With so many potential clients to consider, many financial advisors have made the move to their own practice. If you’re considering joining the ranks of independent advisors, consider the following facets of the process.

Consider the Startup Costs

photo 401(K) 2012 via Flickr

How are you going to get your firm off the ground? Do you have enough personal capital set aside to start your own small business, or will you need to secure loans from outside sources? These questions must be answered before you can even begin to work on your wealth management firm dreams. If you’re looking for a loan to acquire the initial capital, consider where you’ll locate this money. There are numerous upfront costs inherent to financial firms. As an advisory firm, you’ll be required to meet a bevy of regulatory requirements, none of which come cheap. Not only will you be required to set up an ADV and state licensure, but you’ll also need to concern yourself with office expenditures, website creation and maintenance, insurance issues, marketing costs, and more. You’ll also need to keep the loss of opportunity cost in mind. When you make the move to your own practice, you’ll likely lose a good chunk of clients, meaning you’ll lose that income for the time being. Approach lenders like Sterling Finance Company that offer personal loans on flexible payment plans to ensure you have the amount of capital required to make your firm a success from the onset.

Utilize Setup Assistance

There’s an unlimited amount of facets involved in the setup of a wealth management firm, and if you’re going it alone, you may find yourself running into legal issues down the line. To avoid this reality, and save yourself a headache or two, you may consider hiring a company that’s designed to help financial advisors start their own practices. While these services don’t come cheap, you’ll find that the initial investment is more than worth erring on the right side of legality. From compliance issues to regulatory factors, office setup to marketing help, these companies are often full service and can help you get your firm up and running in a quicker amount of time. Many financial advisors find it hard to navigate the rules regarding the departure from a previous employer. These companies can help you traverse these intricacies, ensuring you don’t burn any bridges and keeping you on the right side of the law.

Internal Improvements

If you have a small investment team, consider what you can do to improve your company from within. You may consider encouraging employees who are still in the early portion of their career to pursue their CFA. The prestige associated with this title, along with the practical application of the knowledge covered in this system could see your firm attracting higher paying clientele. Beyond verbal encourage, you can consider funding your employees’ testing materials. The average test taker may find themselves retaking certain portions of the test, and this can add up for an individual; if you cover the costs of study resources and actual test fees, your employees may be more inclined to continue on their path. Whether you shell out a few hundred dollars for CFA Level 1 study material for the employee just starting out, or pay for your seasoned employee to take the exam for the second time, you’ll find these small investments are more than worth the payoff in the long term.

Opening up your own independent advisory firm is no walk in the park, but if done correctly, you stand to make an amazing profit and catapult your career to heights you may have never before considered.

Author: Zainab Sheikh

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About the Author

- Writer and Co-Founder of The Global Dispatch, Brandon has been covering news, offering commentary for years, beginning professionally in 2003 on Crazed Fanboy before expanding into other blogs and sites. Appearing on several radio shows, Brandon has hosted Dispatch Radio, written his first novel (The Rise of the Templar) and completed the three years Global University program in Ministerial Studies to be a pastor. To Contact Brandon email [email protected] ATTN: BRANDON

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