How to be a successful financial planner

How to Become a Successful Financial Advisor – Tips You Don’t Want to Miss!

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Financial Advisors often play the role of a therapist. They get to know about their clients’ worries and insecurities and accordingly work out the right solution for money problems. As you become a successful financial advisor, your responsibility towards clients increases manifold!

How to be a successful financial planner
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Financial planning for others is undoubtedly a rewarding career option. However, the profession can be quite challenging before you start earning money as a financial planner.

Before I discuss the tips for becoming a successful financial advisor let me share some interesting statistics which explain why the financial planning industry looks so lucrative right now.

Statistics that Encourage You to Become a Successful Financial Advisor

It is anticipated that the need for financial Advisors will rise significantly in the coming years.

In fact, more than 66000 financial Advisors are needed in the United States alone in 2020. The financial advisor industry caters to more than 34 million clients worldwide.

At present more than 50% of industry professionals are more than 50 years old. Many of them have accumulated enough wealth and now plan to retire with a lifetime allowance. These young professionals who have some knowledge of retirement planning, prefer to use the lifetime allowance calculator to do it on their own. 

And then there are individuals who rely on financial advisors only to stay safe. This opens up opportunities for young financial Advisors below 40. In fact, if you are a young woman planning to become a successful financial advisor then here’s a piece of good news for you. More than 55% of women aged 25 to 30 agree that they would prefer to take advice from women financial planners.

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Also there’s a significant rise in investment Advisors who cater to high net worth individuals.

So, now that you are convinced to become a successful financial advisor, let’s discuss some key questions and answers you might be having about this profession/business.

Who is a Financial Advisor or Consultant?

He/she is the one who helps people make smart money decisions to fulfil their financial goal. So, how do they do it?

Financial planners start by understanding the client’s money needs and goals. They do a thorough assessment of the person’s present financial situation.

Accordingly the financial planner suggests steps to achieve the financial goal, as per criteria set by the client.

financial planning starts by setting up a goal

There are financial advisors with varied backgrounds, well-equipped to provide a multitude of financial services. Then there are advisors who prefer to define own niche e.g. tax saving/retirement planning/child education and so on.

As a financial advisor you can chose to work with wealth management firms, insurance companies or established agents. And of course, you can set up own investment consulting firm or offer advisory services independently.

If you chose to start own investment firm, then you should be comfortable doing the following:-

Networking and communication

Willingness to build up a long-lasting relationship with clients

A smart talker who can speak fluently at seminars and networking events, if invited

Be Disciplined and patient

Proficient in Data crunching

And of course ability to work in an organized manner.

What Education Do You Need to Become a Successful Financial Advisor?

Generally speaking, you should have a Bachelor’s degree from an established institution/university. You can grab better work opportunities if have a specialization in Business, Finance, Economics, Marketing, Statistics or any other field related to your business/ profession.

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Nowadays, many students prefer to study trending topics in this field, e.g., tax consulting, small business risk and money management, personal financial planning & investments and real-estate planning. There are online institutes like Kaplan Financial Education which prepare you for licensing exams, while letting you study at your own pace!

If you decide to start own financial planning business then you can get high-profile clients quickly by obtaining any of these accredited certifications :-

Certified Financial Planner or CFP- educates you about how to adopt an all-inclusive approach to financial planning.

Chartered Investment Management Consultant or CIMA- makes you an expert in investment and portfolio study.

Remember, in order to sell investment products directly, you may need to clear certain exams as stipulated by the Financial Industry Regulatory Authority in your specific country/region. For instance,  mutual fund distributors in India need to clear the Mutual Fund Distributors Certification Examination/AMFI Mutual Fund (Advisors) Module/Mutual Fund Distributors Continuing Professional Education.

You should check out relevant certification programs that are recognized by your Country and State.

Do You Need to Acquire Experience Before Starting Own Financial Consulting Business?

Yes, it is highly desirable that you gain some experience in your respective field before launching own investment advisory firm.

become a successful financial advisor

Since you have the requisite knowledge and qualification, you can consider an internship in any reputable brokerage firm /financial planning department of a bank or a smaller firm run by independently certified planners.

An internship or full-time job teaches you how to do cold calling, build customer trust and retain valuable clients. The work experience also helps you understand your specific areas of interest in managing investments.

Once you gain enough experience in handling a sizeable client portfolio, you can take the steps to start own business.

Few Practical Tips to Be a Successful Financial Advisor

Develop yourself as a champion of products you sell. Whatever products/services you offer, have a deep subject knowledge. Stay updated with latest plans, schemes, offerings etc. You must be knowledgeable about the basics of those financial products and also offer advanced level information, along with research & analysis.

Your business skills need to be perfect. You should learn the right selling skills while keeping in mind the changing dynamics of finance industry. Understand your customer needs. The best way to learn selling is by attending workshops which are custom made for finance professionals like you. Look for workshops/online courses that cover key topics like :-

How to grow your advisory business and acquire more clients ?

What are the latest marketing trends, tools and techniques that finance professionals should use?

How to boost profits quickly?

You should develop a never-ending hunger for knowledge and self-improvement. Remember, financial service is a sector which changes very fast and consumers keep changing too. If you don’t learn and can’t grow then your success is going to be short-lived.  I suggest reading some of these books about success and failure to stay motivated!

Don’t talk big, rather be honest with your clients. It doesn’t really help your business if you think it is easy to get clients by serving incorrect or false information. Remember, customers have become smarter as they “Google” it, every time you try to make it complicated or confusing for them!

What Are the Steps to Start a Financial Consulting Firm and Make Money Out of It?

Define a business model

start with a business plan to set up a financial advisor business

Just like any business, your financial consulting firm needs a clear plan too. This is the first step to successful entrepreneurship. So, don’t overlook it!

Here are few key topics to take into consideration during the planning stage:-

1. What are the initial and recurring expenses to run the financial planning business?

 2. Who do you plan to target with your services, e.g. young professionals, retirees, work-from-home entrepreneurs, etc.

3.  What will be the approximate timeframe to break even?

 4.  What will be the name your business?

5. Do you set it up as home office or rent a space? Will you be hiring full-time employess or working with interns?

Name Your Business And Get It Registered

Often financial advisers start the business in their own name. But if you really aim to become a successful financial adviser and run a profitable business then you have to make it sound more professional!

Names like “Quick Financial Services”, “Assist Financial Advisory Service” and “Capital Financial Services” sound much better, don’t they? You can try this business name generator to figure out an appropriate name for your business.

Now you need to acquire necessary registration from the financial regulatory authority in your State/region. For instance to offer services as a financial planner in India, you need to become a Registered Investment Advisor or RIA with SEBI. And then, if you plan to sell insurance products in India, you can’t do so without IRDA certification.

Besides this, you can register your company as a sole-proprietorship firm/Limited Liability Partnership or Private Limited Company. Most financial planners who plan to run a proper business, chose the One-Person Company or LLP model. (Ref. link apply-licenses-permits for more information.)

Not sure about the entire procedure? You can consult a legal professional who has handled registration and legal documentation requirements of financial advisors.

The alternate route many take to start a financial planning business is becoming a sub-broker or agent of any established brokerage firm in the locality. This way, you get all necessary support and training from the broker-dealer.

However, if you really want to become a successful financial advisor and sustain long-term, then we suggest starting it on your own rather than taking the short cut as a sub-broker.

Set Up Your Financial Consulting Firm

set up for financial planning business office

The best thing about consulting business ideas is that they can be implemented at minimum cost. The same applies for your financial planning business too!

You can set up the office with a work desk, a computer, and a stable internet connection. We also suggest investing in a good quality printer and scanner, if possible. You need a proper filing cabinet to maintain client files, applications and important information about latest financial products or services that you plan to offer.  Last but not the least, get a dedicated business phone connection as most of the communication will happen over phone.

For promotion purpose, you should print some attractive business cards, and marketing collaterals like flyers, brochures, product data sheets, etc.

Open a separate bank account for your business and also get a business credit card, in case you feel like using one. If you plan to do the accounting on your own, then here’s a list of free accounting software packages for you to try. 

Spread the Word

Most people believe that a financial planner is the person who can show how to make money quick!

Therefore, to become a successful financial advisor you need to be really smart in offering financial education. Let them realize that you are here to help them enjoy better life while weathering financial shock.

start a niche consulting in 2020

To spread the word effectively, you can target the local community, friends and acquaintances. Financial advisors still rely on traditional marketing strategies like newspapers, leaflets and radio.

A good idea is to get yourself invited at a networking event, seminar, talk show or podcast. Offer to hold a free class at a local business management institute. Even you can organize own event where you educate attendees about the importance of financial planning.

These are simple trust-building measures which can really help land your first client!

Establish Your Digital Presence to Become A Successful Financial Advisor

Now that you have taken enough steps to spread the word locally, you should put equal effort to strengthen your online presence.

Here are few things you can do to establish your business online:-

  • Build a website and optimize it for SEO and voice search. Don’t try to do it on your own. Rather hire an expert who takes care of web design, content development and SEO.
  • Create business pages on Facebook and Twitter and serve useful information. Don’t always try to post about own product/services. Rather make the page interesting by sharing informative posts, and videos of experts in your field. Use Live video  to connect with followers and potential clients.
  • Use Linkedin to connect with influencers. Start by following their posts and putting up valuable comments. Then send a polite request expressing your intention to work with them.
  • Create videos and share them on YouTube.
  • Start a blog and share valuable inputs about financial products and services that you offer.

Make Sure They Keep Coming Back For More!

Once a client, always a client? Even after you become a successful financial advisor, you may not agree to this point! Because you already know how difficult it is to retain clients long-term.

So how do you get new business and referrals from old clients?

1. Keep it simple. Try to speak a language that your client understands. Be patient in handling client queries. This will encourage them to keep coming back to you.

2. Help them unconditionally. Let’s suppose you are into tax planning and a client of yours asks for help related to real-estate. You can always help by referring him to a trusted source of yours who is into real-estate planning.

3. Offer impeccable services which keep your clients happy. And we all know, a happy client can always direct you to some genuine referrals.

4. Keep in touch even after you get their portfolio. Few simple gestures matter a lot. Remember to send birthday and marriage anniversary greetings, wish them on special days and events (getting a new job, buying a new property, having a baby, etc.)

5. Simply send a polite e-mail requesting a referral or recommendation.

6. Keep them updated about their investment status. Show them real figures to explain how the financial planning has improved their portfolio.

7. Send them regular newsletters with news, tips and suggestions. This can encourage your clients to take further action, maybe, injecting fresh funds into their portfolio.

Decide the Right Way to Charge Your Customers

Reading till now, you must be wondering how much do I earn once I become a successful financial advisor?

make money as a financial planner

It all depends on how smartly you work out a payment model which keeps clients happy and compensates your hard work. Let’s explain it this way

You can decide a fees based model and charge clients a minimum of 0.75% of the total assets managed. Depending on the complexity of work, you can charge a maximum of 2% also. For instance, if the financial advisor is handling assets worth $50,000, then your client pays a fee of $1000.

Some financial planners maintain a payment model of charging lower percentage for portfolios where transactions happen regularly.

You can earn commission from the company itself, by selling their products. The commission structure varies between 0.5% and 8%, depending on the nature of instruments.

To Conclude

You have to devote quality time, and be patient, to become a successful financial advisor. Integrity is highly valued in this profession. Remember, financial planning is an on-going process which assures recurring income for advisors, provided you do it the right way. Keep learning and keep brushing skills to grow as a financial planner!

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