Financial Advisor Business Plan



Financial Advisor Business Plan

As a financial advisor you will offer advice and guidance on financial products and services, including pensions, savings and investment options and personal tax issues. You will examine an individual's income and expenditure, and will provide advice on saving schemes and products to suit that individual. The advice you offer will be accurate and independent and will never favor one financial product provider over another.

In the current climate of fierce competition between advisers, and with the media's frequent criticisms of unreliable guidance, the need for credible advice is extremely high. Many consumers choosing to consult independent advisers do so after becoming disillusioned with large financial corporations, while others are confused and intimidated by the complex array of financial products on offer.

As a financial advisor you will sell the products of financial service providers and offer appropriate advice. The main types of services you will provide are

  • Mutual Funds
  • Segregated Funds
  • Tax Planning
  • Estate Planning
  • Life Insurance
  • Disability and Group Insurance
  • GIC's
  • Registered Education Savings Plans
  • Registered Retirement Savings Plans
  • RIF's, LIF'S and LIRA's


An independent financial advisor offers advice and guidance on financial products and services, including pensions, savings and investment options and personal tax issues. They will examine an individual's income and expenditure, and will provide advice on saving schemes and products to suit that individual. The advice they offer must be accurate and independent, and cannot favor one financial product provider over another.

In the current climate of fierce competition between advisors, and with the media's frequent criticisms of unreliable guidance, the need for credible advice is extremely high. Many consumers choosing to consult independent advisors do so after becoming disillusioned with large financial corporations, while others are confused and intimidated by the complex array of financial products on offer.

Financial advisors sell the products of financial service providers and offer appropriate advice. The main types of services sold by advisors are life assurance, mortgages, pensions, health insurance, unit trusts, investment trusts, direct investments (stocks, shares, debentures) and tax efficient investments. Some advisors are involved in corporate finance and other investment activities e.g. planning for school fees. The range of services will depend on the client base and the specialism of the advisor, and may vary from simply advising on a particular area to a comprehensive financial planning service.

All financial advisors are required under local financial services act to state clearly whether they are ‘tied’ or ‘independent’. A tied agent or salesperson is committed to a single financial institution and may only sell the product of this organization and no other.

Alternatively, the independent financial advisor should consider the entire market place when making recommendations. Commission on sales is generally the largest source of income for financial advisors, although this varies between different providers. There has been significant growth in the independent advisor sector and a reduction in the number of tied agents. Independent Financial Advisors usually offer clients the choice of payment by fee or commission. Although there is a trend in some areas towards payment by fee, commission is still the most common payment method.



Financial services refers to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are banks, credit card companies, insurance companies, consumer finance companies, stock brokerages, and some government sponsored enterprises. The financial services industry represents 20% of the market capitalization of the S&P 500 in the United States.

Investment management is the professional management of various securities (shares, bonds etc) assets (e.g. real estate), to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. mutual funds).

The term asset management is often used to refer to the investment management of collective investments, whilst the more generic fund management may refer to all forms of institutional investment as well as investment management for private investors. Investment managers who specialize in Advisory or discretionary management on behalf of (normally wealthy) private investors may often refer to their services as wealth management or portfolio management often within the context of so-called "private banking".

The provision of 'investment management services' includes elements of financial analysis, asset selection, stock selection, plan implementation and ongoing monitoring of investments. Investment management is a large and important global industry in its own right responsible for caretaking of trillions of dollars, euro, pounds and yen. Coming under the remit of financial services many of the world's largest companies are at least in part investment managers and employ millions of staff and create billions in revenue.

Fund manager (or Investment Advisor in the U.S.) refers to both a firm that provides investment management services and an individual(s) who directs "fund management" decisions.

Recent years have seen the financial advice industry coming under greater scrutiny and considerably more detailed regulation. These moves come in response to criticism from customers about biased or misleading advice. There are new requirements for independent financial advisors, including the completion of adequate training prior to practicing. These measures were introduced after the widespread mis-selling of high-profit bonds and endowment mortgages undermined the credibility of the profession.

The process of 'depolarization', which has seen changes in the law designed to make it clearer to the customer whether an advisor is genuinely independent or not, has been implemented throughout the world. It saw the creation of the multi-tied advisor allowed to advise on the financial products offered by a small number of providers, and the requirement that all advisors must make their customers aware of certain key facts about the advice they receive. Key facts concern both the advisor by clarifying their status, the type of information they offer, and the actual information itself.

As a consequence of the mis-selling noted above, professional indemnity insurance premiums are becoming prohibitively high for some advisors.

Concern over the inadequacies of state and private pensions continues, and personal pension consultations are becoming one of the main sources of income. The Government has attempted to remedy the serious shortfall that will affect those planning to retire in the 2020s by encouraging a greater investment in private pensions, but so far this has not solved the problem. The stakeholder pension scheme has not attracted the numbers it was expected to, and public service pension schemes are in a precarious position. Hence, there are indications that private investment will become compulsory, with the Government legislating to make employers deduct sums from their employees' salaries.



As competition between the providers of financial products increases, imaginative new packages are being marketed for particular niches. Dedicated investment plans for specific future events such as children's weddings or education are now being offered. They differ little from many established investment and savings schemes, but they are being marketed in creative and appealing ways to target particular customer bases directly.

The market for independent financial advice is broadening year on year as increasing numbers of consumers have sufficient disposable income to invest a certain proportion of it every month. However, despite a wider variety of savings and investment programs, the level of consumer debt is growing, with more people using store cards, credit cards and loans to fund their lifestyles. Pensions, both state and private, continue to dominate the personal investment market and consumers are continually seeking independent advice to make an informed decision about their investment options.

Consumers are increasingly seeking advice on how best to save for their future. Investment bonds are frequently chosen by individuals wishing to invest a lump sum for a relatively long period, and are designed to appeal to those prepared to accept a greater risk in exchange for a greater return on their money than is offered by savings accounts.

You can also offer advice in corporate finance and other investment activities e.g. planning for school fees.

What should a client expect from you as a financial advisor:

  • A comprehensive assessment of their current financial situation;
  • Assistance in helping them determine their financial needs and goals;
  • An explanation of the available financial products (bonds, mutual funds, IRAs, etc.), including their income potential and associated risks;
  • Development of a written financial plan and assistance in its implementation;
  • Creation of a timetable for implementing the plan and helping them periodically review your progress.

Financial Advisors give advice regarding investments, insurance, taxes, wills & trusts, and mortgages — advice tailored to the customers needs to help them achieve their financial goals. If you choose your planner well, they will become an important part of your life, and you should be together for a life-time. After all, financial planning is a lifetime activity.

As a financial advisor you can make money in several ways but the best for keeping your integrity as a financial advisor is to act as a fee-only firm that provides comprehensive financial planning and investment advisory services to individuals and small businesses. Fee-only advisors do not accept commissions or receive any other compensation for recommending specific products.

By accepting fees only you work solely for the client to help attain their financial goals.

Whether a client actually needs an advisor depends on their own comfort level with making investment decisions, and how much time and resources they are willing to dedicate to maintaining their investment portfolio, keeping up with the market, and just plain doing their homework.

As a financial advisor you will want to increase your client list; and you can do this in many ways:

  • networking
  • monthly public seminars
  • word of mouth
  • local advertising

Your objectives should include:

  • To build a business based on repeat customers; these customers will recommend all the new business you can handle.
  • To increase your customer base by 25% per year.
  • To finance the business from your own cash-flow.
  • To create value for your customers as that will create value for your business.

Your keys to success will be in freedom of choice. This means independence, the ability to offer the widest range of products and services to your clients and the professional freedom to be the best we can be. For our clients freedom means a lifestyle built on financial security for the future and the opportunity to enjoy life along the way.

Your experienced advisors will work with a client to develop a comprehensive financial plan that will assist them in achieving their goals and dreams. A financial plan incorporates investment and insurance products, which are chosen specifically for them. Your advisors will discuss a full-range of products and services which may become part of their financial portfolio.

A clients financial plan will be designed to ensure their needs and the needs of their loved ones are met through every stage of life. Financial planning should give your clients peace of mind.

Your organization should be built on integrity, creativity and innovation.

The success of your clients long term financial planning depends upon you:

  • understanding their immediate and long range financial needs;
  • providing individually tailored, well researched independent advice;
  • offering a comprehensive range of superior products and services;

You will build and maintain trusting relationships with clients by providing this service consistently. You are in partnership with you throughout the many changes that occur in life. You know that people with sound financial plans are better prepared for the many events that occur in life such as marriage, job opportunities, unexpected death, divorce, birth of children, business opportunities and retirement to name a few. A financial advisor is there to help you make important decisions.

Why are you preparing it?

  • Desperation,
  • expansion,
  • opportunity,
  • threat,
  • time-of-life,
  • peer pressure,
  • spouse pressure or
  • it just feels right?

Who will read it? –

  • Grant managers,
  • bank managers,
  • venture capitalists,
  • trade financiers,
  • invoice discounters,
  • leasing managers,
  • business angels or
  • just you?

What is your timescale? – Next week, next month, next year, tomorrow or yesterday?

Writing A Financial Advisor Business Plan

Writing A Financial Advisor Business Plan

Writing A Financial Advisor Business Plan

Most Financial Advisor Business Plans fail. Why?

  • Unsustainable business proposition.
  • Inadequate management skills.
  • Unrealistic objectives.
  • Poor presentation, style and structure.
  • Weak content.
  • Insufficient market research.
  • Unsustainable financial requirements.
  • Inadequate financial information.
  • Unrealistic financial assumptions and projections. And, most importantly;
  • Lack of conviction.

Almost everyone the Financial Advisor Business Plan is given to wants to lend you money. Almost everyone you meet has targets to meet of their own and almost everyone would rather invest in a profitable, expanding business than put the money on deposit at the bank.

If you want the money, you will get it. Maybe not all you want, maybe with strings attached and certainly not without the expectation that the investor will see something in return. Lack of conviction is the main cause of plans failing.

It is the only reason for business failure that cannot be rectified.

The Financial Advisor Business Plan must radiate confidence. Yes, it must be realistic and the success you guarantee must have a reasonable chance of being achievable. That’s the easy part, if the business objectives have been set correctly and the strategy to achieve them has clearly been well thought out. But isn’t that the sort of thing you think about every day?

The Financial Advisor Business Plan must have balance, with both strengths and weaknesses identified. Think of any well-known business, McDonalds for example. There are clearly a lot of strengths in the underlying plans of that particular enterprise, but are there any weaknesses? Of course there are. Vegetarians are not keen on them, not many companies hold functions there, there is not much scope for the introduction of high profit luxury goods, the properties are of limited value to anyone but McDonalds and their major product is beef!

Would you go into the market selling beef, or even take a business plan to the bank which suggests that selling beef is a good venture to get into?

Don’t hide weaknesses. A discussion of your weaknesses can greatly enhance the Financial Advisor Business Plan as it demonstrates your ability to identify risk; it also has no little benefit in demonstrating honesty. Financial Advisor Business Plans should be realistic and the odd, clearly identified, weakness removes the accusation of being fanciful.

Think about your Financial Advisor Business Plan before you begin to set it down on paper, and when you are about to start writing it out, stop, and think about it again. Think through your Financial Advisor Business Plan and plan your success.

Try to describe the benefits of your services from your customers' perspective. Successful Financial Advisors know or at least have an idea of what their customers want or expect from them. This type of anticipation can be helpful in building customer satisfaction and loyalty. And, it certainly is a good strategy for beating the competition or retaining your competitiveness. Describe:

  • What you are selling.
  • How your service will benefit the customer.
  • Which services are in demand; if there will be a steady flow of cash.
  • What is different about the service your business is offering.

Your financial plan will be highly scrutinized by your Financial Advisor Business Plan reader. All the ideas, concepts and strategies discussed throughout your entire Financial Advisor Business Plan form the basis for, and should flow into, your financial statements and projections in some manner. When it gets down to it, your reader wants to know if and when you will make money and become profitable.

Financial statements and projections should follow Generally Accepted Accounting Standards and must (at a minimum) include properly prepared balance sheets, income statements and cash flow statements. Bankers and investors are familiar with the correct content, organization and presentation of financial statements, and expect to see them in your business plan. Don't cut corners or attempt to devise your own method of financial and pro forma statement presentation.

In most cases, capital sources expect financial projections for a three to five year period, and historical statements for the past three years (or since inception if operating period is less than three years).

Consider organizing your financial statements as follows:

Income statements:

  • Year 1 - monthly projections
  • Years 2 & 3 - quarterly projections
  • Existing Financial Advisors should provide income statements for the last 3 years if they are available.

Balance sheets:

  • Year 1 - quarterly projections
  • Years 2 & 3- yearly projections

Existing Financial Advisors should provide current balance sheet and balance sheets from the prior 2 years if they are available.

Cash flows:

  • Year 1 - monthly projections
  • Years 2 & 3 - quarterly projections

Other information that you may consider including financial assumptions as these are critical to properly convey the "reasons behind the numbers" for outsiders reviewing your financial projections. Explain how you calculated the numbers you used in your financial statements.

Break-even analysis:

These figures demonstrate the volume of sales, in units and dollars that must be generated to cover fixed and variable expenses. At the break-even point, you start becoming profitable. Normally this data is presented in a graph format with sales on the x axis and unit sold on the y axis.

Financial Advisor Business Plan

Financial Advisor Business Plan

Financial Advisor Business Plan

Now that your reader knows that you have a good product, that there is a market for it, and that you know how to run the business in an efficient way, you should explain, in fair detail, why you need his or her money and how you will spend it.

Emphasize how much money you and your colleagues are invest ing. No one is going to risk money on your project if you are not substantially committed. Having added up the sums you are putting in and all that you are hoping to raise, list the items you will be spending the money on, such as:

  • buildings (give some details);
  • equipment (specify major items);
  • cost of publicity for the initial launch;
  • working capital (reference to cash flow forecasts);
  • reserve for contingencies.

Great Financial Advisors do not just happen.

They are planned that way.


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