Business Plan For Financial Advisors

The easy answer is “anyone who will pay me”, but in practice I find that one of the most common reasons a new advisor fails is that their initial outreach is unfocused, there’s absolutely no possibility to gain any momentum over time.

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Yet the reality is that crafting a business plan is about more than just setting some business goals to pursue.

Like financial planning, the of thinking through the plan is still valuable, regardless of whether the final document at the end gets put to use.

As the famous military saying goes, “no battle plan ever survives contact with the enemy”, because the outcomes of battle contact itself change the context, and it’s almost impossible to predict what exactly will come next.

Nonetheless, crafting a battle plan in advance is a standard for military leadership.

Given that the overwhelming majority of financial advisors essentially operate as solo practitioners or small partnerships, this perhaps isn’t entirely surprising – when you can keep track of the entire business in your head in the first place, is there really much value to going through a formal process of crafting a financial advisor business plan?

Having been a part of the creation and growth of numerous businesses, I have to admit that my answer to “does a[n individual] financial advisor really need a business plan? But not because you’re just trying to figure out what the basics of your business will be, which you may well have “figured out” in your head (or as the business grows, perhaps figured out in conversations with your partner).So who, for them – in other words, what services will you deliver. ).3) How will you for them, it’s time to figure out how you will reach them – in other words, what will be your process for finding prospective clients you might be able to work with?The reason it’s necessary to first figure out who you will serve, is that the nature of your target niche clientele may well dictate what kind of services you’re going to provide them; in fact, part of the process of identifying and refining your niche in the first place should be to interview a number of people in your niche, and really find out what they want and need that’s important to them (not just the standard ‘comprehensive financial plan’ that too many advisors deliver in the same undifferentiated manner). If you’re targeting a particular niche, who are the centers of influence you want to build relationships with?As the included sample template shows, there are six key areas to define for the business: who will it serve, what will you do for them, how will you reach them, how will you know if it’s working, where will focus your time, and what must you do to strengthen (or build) the foundation to make it possible?Ideally, this should be accompanied by a second page to the business plan, which includes a budget or financial projection of the key revenue and expense areas of the business, to affirm that it a financially viable plan (and what the financial goals really are! And in fact, because one of the virtues of a financial advisor business plan is the accountability it can create, advisors should not only craft the plan, but it – with coaches and colleagues, and even with prospective or current clients.Financial advisors just getting started launching a new RIA face very different business and growth issues than a solo advisor who has been operating for several years but now hit a “wall” in the business, and the challenges of a solo advisor are different than those of a larger firm with multiple partners who need to find alignment in their common business goals.Nonetheless, the core essential elements that any business plan is required to cover are remarkably similar.And the business plan serves the exact same role within a business.Because the reality is that in business – as in battle?In fact, for many advisory firms, a simple “one-page” financial advisor business plan may be the best output of the business planning process – a single-page document with concrete goals to which the advisor can hold himself/herself accountable.So what should the (one-page) financial advisor business plan actually cover?