Getting an advantage: 5 key elements of a financial advisor’s business plan


As a financial advisor, the idea of ​​developing a business plan can feel a bit like a physical exam. Ninety percent of the time it’s not on your mind. Every six months or so it comes back and you know you have to deal with it, but you also know it’s going to be uncomfortable. And just like avoiding your annual medical appointments or other medical appointments, not creating a business plan can really hurt down the road.

Fortunately, this is where the similarities end. Much of the anxiety financial advisors have about developing a business plan is completely unfounded. If they invest their time in developing a plan, they could see a significant return on their investment; research shows that companies that plan grow 30 percent faster than those that don’t. Despite these results, a study by the Financial Planners Association showed that only 28% of advisors actually have a business plan.

The first thing you need to do is give up what you think you know about making a business plan.

In this article, we’ll explore some of the common myths surrounding financial advisor business plans. We’ll also highlight some signs to watch out for that could indicate your practice needs a business plan. Finally, we’ll discuss what you need to incorporate into your new plan for the future of your financial advisory practice.

3 myths financial advisors believe in the business plan

1. “Business plans take a lot of detail and effort to do”

This myth is common because it is, in certain circumstances, true. For example, if you were just starting your financial advisory business and wanted to get a loan from the Small Business Administration, you would want to develop a very comprehensive business plan that covers everything from market analysis to your financial projections. .

Fortunately, most financial advisors’ business plans will be for internal use only and serve a more limited purpose. In fact, developing a business plan doesn’t even take a full day.

2. “I don’t need a business plan because I’m not trying to develop my practice right now”

Many financial advisors have settled into a lifestyle practice, plan to retire soon, or have a number of reasons why they might not want to grow their business. In fact, our data suggests that a third of advisors are not actively growing and prefer it.

But there is no law that says a business plan should be about growth. Ultimately, the goal of your business plan is up to you. Succession planning is a great reason to develop a business plan, as is wanting to maintain the same level of assets under management (AUM) or client load that you currently have. If you want to grow taller, that’s great; otherwise, that’s fine too.

3. “I know what my goals are, so I don’t need a business plan”

It’s important to have goals, but a business plan isn’t just about setting goals. It is about making a plan to achieve these goals, a defined set of goals and expectations that you can stick to, criteria for measuring success and defining those goals in detail.

Even if developing a business plan was just about setting goals, it would still be a useful exercise. External pressures and the difficult reality of change make it easy to let goals slip away or turn into something that seems more achievable. Six months later, you may find that the goal you are currently pursuing is nothing like the one you have set for yourself. Writing down your goal formally ensures that you have something to refer to when the going gets tough.

How to know if you need a business plan

Now that you are familiar with the common misconceptions surrounding a business plan, the next step is to determine if you need it. At AssetMark, we believe that any financial advisor, no matter where they are in their journey or at what stage in their career they are, can benefit from a business plan. Plus, it’s better to have a plan and not use it than to need it and not have it.

That being said, there are some common signs of distress in a practice that a financial advisor business plan can help with. Specifically:

  • Your projects tend to remain unfinished: When there are a lot of great ideas but not enough follow-through, a well-defined business plan can help you focus your efforts and ensure that you and your staff keep moving forward.
  • Your wishlist is growing: Similar to the above, there might be too many things you would like to do to even get started. Again, a business plan can help you prioritize your wish list and make sure you’re on the right track.
  • You and your staff are suffering from change exhaustion: In order to achieve their goals, many advisors take initiative after initiative, project after project, campaign after campaign – at some point, all of these efforts deplete any reserves you and your team had and it’s time to take a break. The first thing to do is take this break. Then, after recharging, a business plan can help you focus your efforts in a sustainable way.
  • Your advisors are starting to get frustrated: Frustration can come from many sources. Your advisors might feel like they have an unmanageable number of clients, that their hands are tied in the way they serve these clients, that their hours are too long, or their pay is not enough. Whatever the problem, a business plan can help you focus on solving the root cause.

What are the essential elements of a business plan for a financial advisor?

Knowing when you need a business plan isn’t very helpful if you don’t know how to create one. For most financial advisors, there are 5 key things to include in their business plan.

1. Your vision

Where are you trying to go? If you don’t have a desired future for your practice, then it doesn’t matter what you do and you don’t need a business plan. But, if you want to attract more clients, increase assets under management, maintain your current workload, or shift your practice to a promising junior advisor, defining that vision will give you point B to point A.

2. Objectives and goals

Take your vision and break it down into achievable goals. This could be, for example, an increase in your assets under management by 15% next year or the onboarding of 3 new high net worth clients. As a best practice, follow the SMART framework, i.e. set goals that are specific, measurable, attainable, relevant and time bound.

3. An action plan

In order to achieve these goals, you will need to establish an action plan. Assign responsibilities to different members of your firm, set priorities, identify requirements and document all of this so that every time the threads are crossed, you know who is supposed to do what and when.

4. Scheduled exams

You have to plan your action plan, of course. But, you should also schedule regular reviews and management sessions for your business plan. As you progress towards your vision, it is important to assess whether this vision still seems realistic or desirable, if you need to change measurements, reassign tasks, etc.

5. Measurability

Perhaps the most important element of any financial advisor business plan is the inclusion of metrics. Define the Key Performance Indicators (KPIs) that you will follow to achieve your vision and goals. Evaluate your progress against these KPIs and, using these metrics, determine whether you need to take corrective action or stay the course.

Build a plan that works for you

A financial advisor business plan doesn’t need to take weeks to develop together, and it’s not just helpful for advisers interested in growing their practice. The important thing to remember is that a business plan should be tailored to your goals. Whatever its form, it must serve these objectives.

If the prospect seems a little overwhelming, contact an AssetMark business consultant to walk you through the process. Any financial advisor can do a handful of business plans in their career, but our business consultants have worked with thousands of advisors on their business plans, so we’ve learned a few things about the practices that work best.

Take, for example, the experience of financial advisor Kit Tiell. “When I started working with AssetMark, my goal was to spend 80% of my time in front of clients,” said Tiell. In addition to outsourcing administrative tasks to AssetMark, Tiell also took advantage of our business advisory services:

I have also taken advantage of their practice management resources and business coaching to streamline office workflow, create business goals, and develop employee career ladders (among others). My continued engagement with AssetMark’s elite practice management team has allowed me to continue to develop the practice that evolves with today’s business environment.

If you are interested in developing a business plan that, like Tiell’s, lays the foundation for your practice, contact us today to begin your business plan, whatever your goals.


AssetMark Financial Holdings Inc. published this content on October 13, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on October 13, 2021 02:21:03 PM UTC.


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