Startup cost
$10k–$20k
TRUiC Business Ideas
How to Start your own Financial Planning Firm
Decision Snapshot
Financial Planning Firm
Idea Score
69
Profit margin
22%
Break-even
4 mo–12 mo
Time to launch
2 wk–12 wk
Demand trend
Stable
5-yr failure rate
—
Capital intensity
Medium
Time commitment
Flexible
Part 1 - How to start a How to Start your own Financial Planning Firm business - Background
A financial advising business helps people set financial goals and plan out a course of action to realize it. Financial planners who work for the business help clients by analyzing budgets, investments, insurance, and other financial products. They make plans for clients and serve a vital role in today’s world, since they have advanced knowledge of both basic and complex financial concepts. They can also teach their clients how to make their own financial plans and act as a coach or guide.
Most people find finance inherently difficult to understand, so a financial planning business bridges the knowledge gap while providing extensive support and tools for clients. The best financial planning businesses don’t just sell products and services. They transform peoples’ lives and get them to think seriously and deeply about money and how it impacts their life and the world.
Our guide is in 3 parts:
- Part 1 - How to start a Financial Planning Firm business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
What are the costs involved in opening a financial planning firm?
Starting a firm requires you to become a registered investment advisor (RIA), registered with your state. You will spend between $10,000 and $20,000 for basic startup costs. Some of these include office rent, your legal documentation (including your form ADV client brochure and fee disclosure), and fees for your vendors. You’ll also need a good contract with a custodian.
What are the ongoing expenses for a financial planning firm?
Ongoing expenses include office upkeep and business liability insurance, rent, errors and omissions insurance, account maintenance fees for a custodian, and labor costs for any staff you retain.
Who is the target market?
The target market for most financial planners is middle-income. However, some advisors find that the upper middle-class or high net worth market is more worthwhile. Bottom line: choose a market that can afford your services and that has money to invest.
How does a financial planning firm make money?
Financial advisory firms make money by charging clients for financial advice, comprehensive plans, and modular plans. Many advisories also charge a fee for managing investments. The fee is usually a percentage of the assets held under management.
How much can you charge customers?
The typical fee for assets under management is between 1% and 2%. A typical comprehensive financial plan will cost between $1,800 and $10,000, depending on the client and his or her needs.
How much profit can a financial planning firm make?
A financial planning firm can be very profitable. Most firms have profit margins exceeding 10%, and the most successful ones have profits margins exceeding 20%.
How can you make your business more profitable?
Make your firm more successful by specializing in a specific type of financial planning. For example, you could choose to specialize in education planning, retirement planning, financial planning for millennials, or even non-investment planning.
Day-to-Day and Growth
What happens during a typical day at a financial planning firm?
Financial planners do a lot of different things during the day. One of the most important tasks is prospecting and marketing. Even large financial firms need to constantly bring in new clients and service existing ones.
Many firms focus on “assets under management” or “AUM”. The more assets under management, the more the firm makes. Thus, most marketing efforts are geared toward bringing more assets to the firm.
Whether that’s making phone calls every day to existing clients (or new prospects), sending out direct mailers, or giving talks and lectures or holding seminars, the principal advisor in a firm is busy.
A financial planner also meets with clients or oversees meetings with his or her top advisors (who meet with clients). A financial planner also sends faxes, drafts financial plans for clients, does a multitude of calculations on financial planning software, and spends time keeping tabs on the financial markets.
What are some skills and experiences that will help you build a successful financial planning firm?
Financial advisors typically have at least some formal education and training in financial planning. Some colleges, like the American College, are set up specifically for this purpose. The specific skills needed by a financial planner include basic and advanced money management skills, the ability to explain complex financial concepts in simple terms, and a deep understanding of financial math, financial markets, and its relevance to human life.
What is the growth potential for a financial planning firm?
A financial planning firm can be small or large. Many firms are one-person operations. However, some financial advisors grow their firms into multi million-dollar companies. Blue Ocean Global Wealth is one example of a large planning firm. Edelman Financial Services is another example of a firm that grew into a household name.
What are some insider tips for jump starting a financial planning firm?
Jump starting your business is easier if you’ve already owned or operated an RIA. Getting clients from existing business or moving clients over from your old broker-dealer relationships will help. Sometimes, however, this cannot be done. Leverage your relationships in your local community.
How and when to build a team
Build a team as soon as you can afford to do so. It doesn’t have to be immediately, however. Most professional financial planners can manage up to 200 to 250 clients without hiring help.
Part 2 - Is a How to Start your own Financial Planning Firm business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Financial Planning Firm business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Financial Planning Firm Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your How to Start your own Financial Planning Firm business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
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Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
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Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
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Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
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Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
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Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
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Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
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Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
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Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
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Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.