Start a Financial Planning Firm: Tools And Knowledge You Need to Know

Find out about the tools and knowledge you will need to start a financial planning firm, including what questions to ask so you start strong.
start a financial planning firm

Want to start a financial planning firm? It is a noble way to build a career in money management, as in the long run you’ll be able to help clients make the most out of their cash and give something back to the community as a result.

Of course it’s not necessarily going to be a cakewalk, especially in the early stages, so understanding the tools and training that are required to get ahead as a financial planner is essential.

Here are a handful of examples of the main milestones you’ll need to pass and solutions you’ll need to procure as you build your very own financial planning firm.

Getting Licensed & Accredited

Before you start a financial planning firm, you need to make sure you are licensed. Each state has its own licensing laws for financial planners, and so this is something you’ll need to handle first and foremost before your business can even begin to serve clients.

On top of this, it makes sense to seek out accreditation from respected professional bodies in this field, giving you a good level of knowledge in addition to a new string to your bow that can help with marketing.

The CFP Board provides a good example of this, both for building trust and gaining the competitive edge over rival firms.

Then there are the additional, more specialized licenses and certifications to consider. For example, getting a Series 63 license to sell securities might be on the cards, so long as you take advantage of Series 63 test prep solutions and materials.

It’s all about looking at what building blocks of knowledge you need, along with the licenses and recognized industry accreditations that will let you use this knowledge to its fullest, for the benefit of clients and the future viability of your financial planning firm.

Choosing Software Tools

Software has been an asset for financial planners for years now, and the latest solutions in this space offer all sorts of advantages, with a particular focus on automation.

Speaking specifically to the process of financial planning and the rigorous attention to detail this requires, flagship packages like MoneyGuidePro and eMoney Advisor are leading the pack.

As you would expect, as well as providing thorough analytical abilities in their own right, they also support integrations with other finance software and associated solutions you’ll need.

Software is also essential when it comes to tracking the assets of clients, and services like Quicken and Wealthtrace target individual users as well as financial planning businesses with different tiered packages.

Outside of these finance-focused tools, your fledgling financial planning firm will also have to explore additional platforms which are generally useful in businesses across most industries today.

For example, communication tools are a must-have, with messaging platforms such as Slack and video conferencing solutions like Microsoft Teams and Zoom allowing colleagues to collaborate.

Furthermore you should consider investing in a CRM so that your client relationships can be stewarded sufficiently over the months and years.

Clients are the lifeblood of every financial planning organization, and whether you are starting a business with a list of prospects already in hand, or you are starting from scratch, you cannot afford to neglect these relationships from day one.

By nurturing them, your clients will not only stay loyal, but also bring others into the fold.

Acquiring Insurance

Insurance is a tool that provides protection for businesses, and there are several types of insurance that you’ll need, such as property insurance and liability insurance.

Indemnity insurance is another must-have for businesses in this industry in particular, and errors and omissions insurance is also a powerful ally in the case that you are accused of malpractice.

Obviously it is best to take every precaution necessary to avoid having to make use of these insurance policies, but knowing that they are there for if the worst happens will give you peace of mind.

Considering Outsourcing

When you start a financial planning firm, know that it is impossible for any small business to take care of every aspect of its operations internally, and so being willing to outsource certain services is sensible.

This is another area in which you have a lot of options, enabling you to call upon the knowledge and expertise of third party specialists.

For example, you will almost certainly need the assistance of an experienced attorney to get your business up and running, and you might want to keep a lawyer on retainer if your firm grows beyond a certain size.

Likewise having a certified accountant to hand to help with things like taxes and payroll duties is a good move early on.

Then there are things like digital marketing, branding and even customer support, all of which can be outsourced to a lesser or greater extent.

Wrapping Up

Starting your own financial planning firm is easier with the right tools and knowledge, and yet you also need to be willing to ask for help and follow in the footsteps of those with more experience than you as you get your business off the ground.

A combination of hard work, diligence, strength of character and adaptability will be needed to make a success out of your intangible ambitions.

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