How to Start your own Financial Planning Firm

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.

Learn how to start your own Financial Planning Firm and whether it is the right fit for you.


Start a financial planning firm by following these 9 steps:

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your financial planning firm. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

STEP 1: Plan your Business


A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

  • What are the startup and ongoing costs?
  • Who is your target market?
  • How long it will take you to break even?
  • What will you name your business?

Luckily we have done a lot of this research for you.

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.

What will you name your business?

Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

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After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

STEP 2: Form a legal entity


Establishing a legal business entity such as an LLC prevents you from being personally liable if your financial planning firm is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.

You should also consider using a registered agent service to help protect your privacy and stay compliant.

A cube with LLC printed on its sides

For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?

STEP 3: Register for taxes


You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

A cube with LLC printed on its sides

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

STEP 4: Open a business bank account & credit card


Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

  • This separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.

Get a business credit card

  • This helps you separate personal and business expenses by putting your business' expenses all in one place.
  • It also builds your company's credit history, which can be useful to raise money and investment later on.

STEP 5: Set up business accounting


Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 6: Obtain necessary permits and licenses


Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a financial planning business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

For information about local licenses and permits:

STEP 7: Get Business Insurance


Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.

STEP 8: Define your brand


Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

How to promote & market a financial planning firm

Promote your business in your local community using business cards and attend networking events. Let friends, family, and business associates know that you’ve opened a new firm.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

Most clients are reluctant to leave a financial planning firm. However, you can increase the likelihood that they won’t leave by offering clients an immersive experience. Develop a unique culture that fits with your target market.

For example, if your target market is primarily millennials, or younger clients, consider offering perks that they might enjoy.

STEP 9: Establish your Web Presence


A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Start A Financial Planning Firm In Your State

A cube with LLC printed on its sides

Select your state below for an in-depth guide on completing each of these steps in your home state.

Is this Business Right For You?

A financial planner is usually the individual who owns a financial advisory firm. To sit in the CEO’s chair, you must be comfortable working long hours, have a passion for all things financial, and have a special interest in human psychology. 

Many financial decisions are not just about the numbers. They are about the client’s behaviors and how he or she views the world. For example, some investors are concerned about the environment and may eschew investments in fossil fuels, regardless of the mutual fund’s or stock’s long-term return to investors.

Other investors may be more concerned with protecting their principal and earning a conservative rate of return. These investors might only be willing to invest in bonds and bond funds, annuities, permanent life insurance, and conservative bank products.

Some clients may not be comfortable investing their money at all or may not be ready to. Others may need help reigning in spending, or they may be so focused on saving money that they’re living an unhappy life and are coming to you for advice on what to do. Understanding the psychology of different types of people and how each of your clients relates to money will enable you to gain their trust and best serve their long-term financial interests.

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.

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Take the Next Step

Find a business mentor


One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Resources to Help Women in Business


There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

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.

Next Steps

Get more ideas with our Business Ideas Tool.

Check out our How to Start a Business page.

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