“If you fail to plan, you are planning to fail” — Benjamin Franklin
One of the first steps in going independent, whether captive, hybrid or turn-key with an IBD or RIA, is making sure you’ve got the right plan in place. Creating a business plan is a critical component in getting ready to move to a Hybrid (dual registered) or Registered Investment Advisor business model, but many Advisors fail to give this step in their transition the attention it deserves. After all, a business plan can be an intimidating document, filled with assumptions and, let’s face it, some educated guesses about what might happen. Many Advisors, knowing the uncertainty they’re likely to face, especially in the first year, may be tempted to create a cookie-cutter plan that isn’t of much use as they venture into the unknown.
However, taking your business plan seriously can pay dividends. Your business plan is your roadmap. It can help you clarify and sharpen your goals, understand where you’re making great progress and where you’re falling short, and help you identify opportunities to best direct your efforts. As an Advisor, your business plan can either be a document that gets stuck in a drawer or it can be your biggest asset as you move through your career. No one is born knowing how to create a Financial Advisor business plan that sets them apart, but by following a few general rules, you can get the most out of your new business plan.
Think About How Long Or Short You Want Your Plan To Be
It may seem like the only way to create a business plan is to focus on a long, detailed document with a lot of goals and targets. In reality, though, this kind of document doesn’t work for everyone, and the most critical part of creating your plan is making it work for you. While a detailed plan may work for some Advisors, a short, one-page summary of your goals and objectives may be more effective than a long document that needs to be changed frequently as your business grows and develops.
A one-page plan can also serve as a useful template for expansion over time. Once you’ve committed a general summary to paper, it can be easier to expand and elaborate on individual sections as you get a feel for how things are going.
Your Business Plan Is A Living Document
Your business plan should grow and evolve with your business. Setting quarterly, or even monthly “sub-goals” that are a part of reaching your ultimate goal can help you to understand where you are exceeding your own expectations and where there are opportunities to refocus your resources or effort. Making a regular practice of revisiting your plan can help to make sure you’re on the right track and create a sense of momentum toward your goals.
The Essentials — Things To Always Include In A Business Plan
Whether your business plan is long or short, there are a few key elements that should appear in all successful financial Advisor plans. Think of your business plan as your mission statement.
Your Target Audience
Your target audience refers to both your existing clients and the client demographics you wish to target. Understanding the demographics of both your current and target markets can help you assess which products and services to focus on, create marketing materials that speak to your core demographic, and focus your client outreach and marketing through the right channels. Understanding who you want to serve can help to save you from using cookie-cutter marketing techniques that may not be finely targeted to your core audience.
Services Offered
Deciding the services, you will offer to your clients is a crucial step in developing the initial business plan since the other business components result from this. You can offer targeted or variety of consulting services from Estate Planning, Asset Management, Wealth Management, Accounting Services, Tax Consulting and Retirement Investment Services.
Core Competencies
Include a list of the differentiators that set you apart. Things like certifications or advanced degrees, work experience, or professional accomplishments can be important to a potential client in determining whether to work with you — putting these items in your business plan will help you in creating a client “pitch” and marketing materials.
Pricing
As a financial advisor, you’ll have a fairly good sense of what, and how, competitive firms are charging for your services. Determining what you want to charge for your services, and how you want to charge (be it a fee structure or commission) will help to determine what kind of model you want to use and how to structure your firm’s offerings. If you want to offer price discounts to entice existing clients to transfer their business, consider how your pricing will affect your competition for new business.
Including a list of your new RIA business’s offerings will also help you in determining sub-tasks that can get your business where you want it to be in terms of compliance, licensing, technological setup, and business structure.
Budget and Financial Plan
Your business plan should also include a budget, as well as a plan for any financing you’ll need to help you get through the early days of your financial Advisor practice. Talking to experts can help you understand your financing options, and get financing in place before you make the leap to independence.
Want to Keep the Conversation Going?
Need some advice on how to draft a killer business plan you’ll actually use? All of us at Terrana Group welcome the opportunity to consult with you to determine the right platform for you going forward — one that satisfies your long term objectives and is also best for your clients!
Over the course of nearly 30 years, we have helped facilitate thousands of professional placements for Advisors, with client assets transferring exceeding $62 billion dollars. We have completed placements in most every major city throughout the United States, while building deep relationships with the advisory world’s most sophisticated and notable firms — including Wall Street brokerages as well as most Regionals, Boutiques, Banks, Independent Broker Dealers, and RIAs. We have a broad knowledge of the deals that are currently being offered and will ensure that you are being presented with the offer which will be best for you.
Confidentiality, professionalism, and respect are protocol to our practices and beliefs; we handle each and every step of the placement process with complete communication, keeping you informed while making the process smoother from beginning to end.
We are proud to always be considered as a great asset by our clients because of our proven expertise, many years of knowledge, and acute attention to detail. Financial Advisor Recruiting Services are not all created equal; we guarantee that the TG experience for clients and candidates is always world class.
We are based in Chicago, with a nationwide reach. Let us know you are interested by contacting us today. To get the conversation started, email info@terranagroup.com or give us a call at 312.655.8380 today.
