Congratulations on deciding to start your own financial planning business. This is an exciting opportunity and a significant undertaking all at once. If you’re an independent financial advisor (IFA) or registered investment advisor (RIA), you may have imagined the freedom of building a firm around your values, serving clients your way, and shaping your own financial future. These potential rewards also come with challenges. It can be tricky to navigate complex regulations, build a client base from scratch, and make important decisions about your tech stack, compliance, and marketing.
It is normal for advisors to feel both inspired and overwhelmed by the process. That’s why this guide exists, to walk you through every step of launching a financial planning business, from registration and compliance to choosing your niche, building your tech stack, and scaling sustainably. Whether you’re just exploring the idea or you’re ready to take the leap, this article will equip you with actionable strategies, industry insights, and practical tools to help you launch and grow your firm with confidence.
Register your business
The first step is to choose a business structure. Will you create a sole proprietorship, LLC, partnership, or a corporation? Each format has its own legal and tax implications, so it would be beneficial to consult with a business attorney or CPA to select the best option for your goals. Register your business with the appropriate state and federal authorities and obtain an Employer Identification Number (EIN) from the IRS.
Comply with regulations and legal requirements
Financial advisors must adhere to strict regulatory requirements. If you’re launching as an RIA, you’ll need to register with the SEC or your state’s securities regulator, depending on your assets under management (AUM). You’ll also need to:
Obtain the necessary licenses
Draft and file your Form ADV and Form CRS, if applicable
Set up compliance policies and procedures
Secure business insurance such as professional liability or cyber insurance
Create a business and marketing plan
A solid business plan can help successfully launch your new financial planning firm. Outline your mission, target market, service offerings, pricing, and marketing strategies. Include financial projections, such as cash flow statements, balance sheets, and profit margins, to forecast your business’s financial health and set realistic business goals.
For your marketing plan, consider a mix of digital marketing strategies, such as content marketing (blogs, guides, webinars), social media outreach (including vertical video), email campaigns, and referrals. Track your efforts to see what drives the most business growth.
Choose a niche
Selecting a niche can make your financial planning business more profitable and help you stand out in a crowded market. Consider a focused market, such as: small business owners, medical professionals, retirees, or high-net-worth individuals. A well-defined niche allows you to tailor your financial planning services, marketing strategies, and pricing to meet the unique needs of your target audience. To get some ideas, this advisor focuses on future or recent inheritors and this one’s client base is full of firefighters.
Match your services to niche needs
Once you’ve chosen your niche, align your service offerings accordingly. For example, if you aim to serve retirees, focus on retirement planning, estate planning, and risk management. Here’s an article about what you should make sure your financial planning software can handle if you cater to millennials, who may need extra help with student loans, debt management, and home ownership scenarios.
Choose a custodian
A reliable custodian is essential for safeguarding client assets and ensuring regulatory compliance. Compare custodians based on their technology integrations, pricing, service levels, and reputation. Your choice will impact your business’s operational efficiency and client experience. You can find a number of custodians who RightCapital integrates seamlessly with on this page.
Select the right financial planning software for you
The right software can make launching your financial planning business much easier. Look for solutions that integrate with your other tools, offer robust cash flow projections and financial planning services, and will help you along your journey with 100% human support.
In this article, you’ll find a breakdown of some of the top financial planning software platforms, including RightCapital, eMoney, and MoneyGuide, often considered “the Big Three” in the industry. Market reports such as the T3/Inside Information Software Survey and the Kitces report, “How Financial Planners Actually Do Financial Planning” can also help you narrow down the choices. Schedule demos with your top few, ask as many questions as you can think of, trial the software if it’s available, and make the decision from there.
Set clear objectives
Set and track key performance indicators (KPIs) to measure your progress. Common KPIs for financial planning businesses include cash flow, client retention rate, operating expense ratio, and net worth growth. Choose metrics that align with your business goals and review them regularly to stay on track.
Maintain ongoing licensing and compliance requirements
Compliance doesn’t end after launch. Stay up to date with regulatory changes, renew licenses as required, and conduct regular compliance reviews to avoid costly penalties.
Stay up to date with continuing education
Depending on your chosen designation, there may be a requirement for a certain number of educational credits each year. Various companies throughout the industry offer Certified Financial Planner or CFP® CE-credits, but it’s important to note that some do charge a fee. At no cost to you, RightCapital offers monthly CFP® CE-credit webinars. If you’d like to receive emails about upcoming webinars and other events, you can sign up on the resources page.
How to scale your financial advisor business
Once your financial planning business is up and running, it’s time to focus on growth. Here’s how to scale effectively:
Refine your financial planner tech stack
As your business grows, your technology needs will evolve. Hopefully you’ve tried many tech platforms at this point so you can determine which ones can grow with you versus those that are unable to keep up with you. Remember to look for tools that:
Automate routine tasks
Offer comprehensive financial planning and cash flow management
Integrate with your CRM, custodian, and portfolio management systems
Provide customizable reporting and client portals
Support secure document sharing
RightCapital’s robust features help you streamline your financial planning process, improve client communication, and deliver more value. Here’s an example of an advisor who upleveled the client experience while saving $8,400 a year consolidating his tech stack.
Automate routine tasks
Automation can save you time and reduce errors. Use software to automate:
Appointment scheduling
Data entry and account aggregation
Client onboarding and document management
RightCapital’s Tasks module and RightFlows, the workflow management tool available with Platinum subscriptions, can help automate repetitive processes. Here’s a breakaway RIA advisor who uses RightFlows to streamline his onboarding.
Expand your services
Consider adding new services to meet evolving client needs, such as:
Business financial planning for small business owners
Prioritize client retention
Acquiring new clients is important, but retaining existing ones is necessary for long-term success. Focus on delivering exceptional service, regular financial plan reviews, and proactive communication to build lasting relationships. Another bonus of pleasing your current clients is that they will be more likely to refer friends and family who are also in need of your services. Referrals can especially come in handy if you’ve established a specific niche and can prove your expertise to people working in a certain industry, for example.
RightCapital’s RightIntel business intelligence dashboard could help you deliver white-glove service to clients by providing key metrics on clients such as those with the highest debt, with the highest cash balances, or those about to reach the age of required minimum distributions (RMD).
Conclusion
Starting a financial planning business is a rewarding journey, but it requires careful planning, regulatory compliance, and the right technology. By following the steps outlined in this guide, avoiding common pitfalls, and leveraging powerful tools such as RightCapital, you can launch and grow your business with confidence.
Ready to launch or grow your financial planning business with confidence? Schedule your free RightCapital demo today.