From Startup to Growth: A Checklist for New Independent Advisors

Transitioning from employee to business owner is exciting, but—as you may be realizing quickly—it also comes with some new challenges.

Now is your chance to do all the things you said you would do if you were in charge. But, of course, making sure your business gets off to a good start and continues to thrive takes more than enthusiasm.

Here’s a checklist of six best practices that can help you set your independent advisory firm up for success.

Having an HR strategy is crucial; it will help ensure that you have the right employees doing the right jobs, contributing to a more efficient, profitable, and scalable practice.

Luckily, you don’t need to go it alone. The right firm partner can offer a road map and support you each step of the way. As you begin your search and start thinking about a move, here’s a primer for building an HR strategy that can help you manage your most valuable asset—the people on your team.

1) Create a Detailed Business Plan

A written business plan can drastically improve your ability to successfully run your practice and pursue your goals. By laying out a focused strategy, you’ll be able to drive daily business decisions and steer your firm where you want to go.

  • Prepare. Make sure you understand your market, your competition, and where your business fits within the industry.
  • Assess your organization. By conducting a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, you can identify what to focus on in your business plan.
  • Create a mission and vision. Detail, in one or two sentences, what you do and why (your mission) and what you want to become in the future (your vision). If you can’t define your business, your clients won’t know what you can do for them.
  • Define strategic directives. Outline how you want to move toward your vision and where you want to take your practice over the next few years.
  • Set your goals. Develop specific goals that will help you realize your vision. These goals should be SMART (Specific, Measurable, Actionable, Realistic, and Timely).

2) Build a Business Budget

As an independent financial advisor, budgeting and goal setting will be crucial steps to your success. Be sure to build out a solid and realistic financial plan that you can measure and adjust as you go.

  • Forecast projected revenue. Factor in existing revenue (fees from current clients), potential new revenue from clients (such as rollovers or inheritances), and any revenue from new clients you expect to take on.
  • Outline expenses. Estimate fixed and variable expenses, and consider what you may reinvest in the firm for long-term growth.
  • Set goals and measure performance. Identify key performance indicators (KPIs), such as operating profit margin, revenue per professional, or average household growth. These can help you track progress against your short-, medium-, and long-term goals and see where adjustments need to be made.

3) Determine Your Business Structure

How you set up your business will impact tax benefits, qualifications, and obligations, so it’s crucial to put some thought into this. It will also affect your potential liability, so you’ll want to consider separating the business’s tax and legal identity from your individual identity. Finally, you’ll want to think about where and how you’ll establish your place of business.

  • Seek legal counsel. As you prepare to leave your wirehouse, let an experienced securities attorney help you navigate your contract and advise on how to transition existing clients.
  • Determine your legal and tax classification. Decide whether to set up your business as a sole proprietorship, a partnership, a limited liability company (LLC), an S corporation, or a corporation. A tax attorney or CPA can help you select the best classification for your needs.
  • Plan for your new working environment. Weigh the pros and cons of a physical office, remote work environment, or hybrid setup. If you’re unsure which option is best for your new business, ask yourself the following questions:
    • What is your ideal working environment?
    • Will you be collaborating with others in a shared workspace, or are you on your own?
    • Are you, your teams, and your clients comfortable working from home and conducting business virtually?

4) Establish Your Brand

Your brand will be defined by what customers say about you and your company when you aren’t in the room. You can decide what attributes—both actual and aspirational—you want your firm to exhibit. Keeping those attributes in mind will inform the tone and style you adopt. Those insights can guide all client interactions, from the way you answer phones to the style and voice you use for financial advice columns in your local paper or client newsletters.

  • Build your brand basics. Choose a name that fits the image you’re trying to convey, hire an artist to design a logo, and then order business cards and stationery emblazoned with your new identity.
  • Determine your messaging. Consider the story you want to tell clients and potential clients about your firm and what your touchpoints will demonstrate. These interactions include what your clients will see in your office; how they will be greeted in-person or on a phone call; and what your emails, website, and social media interactions will look like.
  • Market your business. Begin promoting your brand’s services and the value offered to clients through digital channels by leveraging your online presence and a smart content marketing strategy.

5) Prepare for Growth

As an experienced professional in this business, you can be reasonably confident you will be able to make a successful go of your new, independent advisory firm.
Even while planning how you will get things started, though, it’s never too early to start thinking about how to manage the growth of your business. Considering these items ahead of time ensures that you are not scrambling when your business takes off.

  • Anticipate growing staffing needs. If a larger practice is the goal, you may want to consider a team of specialists, including people who interact with clients, manage investments, and handle ongoing operations.
  • Prioritize diversity. Effective teams are built when you bring in a diverse group with varied talents. Avoid the temptation to hire people who too closely match your own skills and background.
  • Think about your client service model. As your business grows, you may find it necessary to segment your business and tier the level of service you provide. Clients with less assets to invest may be well-served by straightforward financial plans, while high-net-worth clients with more complicated financial circumstances may require more frequent attention and higher levels of service.
  • Build efficiencies through scale. Even after segmenting, you may find it difficult to deliver the personalized level of service your clients deserve. You can increase advisory capacity and streamline your operations by organizing, delegating, or automating processes and tasks.

6) Plan for the Unexpected

In uncertain times, businesses are faced with the threat of an array of disruptions that could hurt their bottom line.

  • Devise a business continuity plan. Having a plan in place will help you keep your practice running and ensure that you are maintaining a high level of client service in the event of power outages, natural disasters, or any other unexpected situation.
  • Don’t put off continuity and succession planning. A responsible business owner will want their business to carry on without them in the event of a change in professional plans or retirement. If you do not plan to sell your practice to an outside party and want to turn it over to a member of your team, thinking ahead will give you time to pick the right successor and groom that person.

Your clear plan for how the business will change hands will ensure that everyone’s interests—yours, your clients’, and your successors’—are effectively served.

Need Help? We Can Be the Partner Your Firm Needs to Thrive

Even as the owner of an independent advisory firm, you don’t have to go it alone.
Finding a partner that has the resources to support you with all these decisions and the ongoing management of your firm can set you on the course for success. Contact us today to see how we can help ease the burden of starting your new business.

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