The ClientWise Blog

The 9 Elements in Every Successful Financial Advisor Business Plan

Posted by Ray Sclafani on Dec 16, 2015 12:14:55 PM

advisor business planIn our last blog, we focused on the turning of the calendar as an ideal opportunity to revisit your business plan, with an eye towards capturing more meaningful business metrics. A number of you, however, asked us to take a step back and devote some time to outlining the essential elements that make up any effective business plan.

While there are no defined rules regarding crafting a plan, keep in mind that your plan is intended to map out your future business – the clients you want to work with, the needs and challenges you’re uniquely suited to address, the processes around solutions, and the team you will surround yourself with to deliver those solutions.

Every strategic business plan must be unique – a reflection of what makes your firm stand apart. Nevertheless, there are certain core elements that are essential to a sound and well-thought-out plan. How you flesh out the underlying specific details is what will ultimately differentiate your practice from other similar firms.

  1. Financial Advisor Mission Statement: Define your ideal (but achievable) future business and articulate your goals, ambitions, beliefs and values. Clearly spell out the business that you want to create and the life you want to live. (Coach Note: A clear mission/vision statement is a “beacon” that guides you forward. Without one, it will be difficult to align your business goals with your life goals.

  2. Executive Summary: This section serves as a brief highlight of your plan details, and if intended for potential investors, should serve as a hook that grabs their attention. Include a short description of the firm and its objectives, an outline of your service offering, a well-defined target market, a glimpse at your competitive advantage, and finally an overview of your growth potential and funding requirements.

  3. Service Offering: Describe the unique opportunities you offer prospective clients, and the processes by which you will do so. Highlight elements of your service offering that will differentiate the client experience. Define how you will be compensated for particular services (asset fees, commissions, and hourly fees) and what your time and your team’s time costs.

  1. Target Market/Niche: Who is the ideal client for your services? Define their financial needs, challenges, age and wealth level. Are there specific professional or life stage niches that you are targeting? Be as focused as you can on defining these individuals and include any meaningful demographics about market size and growth potential, geographic concentration, etc.

  2. Acquisition Strategy: How will you directly and indirectly reach out to and connect with potential clients? What centers of influence (Loyal Client Advocates and Professional Advocates) will help you in connecting with your target market and how will you go about building and cultivating those referral relationships? Identify target goals for number of new relationships and expansion of existing ones. Make sure your processes are scalable and repeatable.

  3. Competitive Analysis/SWOT: Once you’ve identified whom you’re ideally suited to serve, you need to gain a strong understanding of who else serves this market. Strive to create a side-by-side SWOT (strengths, weaknesses, opportunities and threats) analysis to help you better differentiate your offering and craft a compelling story about what sets you and your team apart from the competition.

  4. Operations: What are the documented and repeatable processes and procedures that you and your team will follow to deliver on your service promise? What systems and operations will be kept in-house and what will be outsourced? What sort of oversight will be applied? And as your practice continues to grow, how will you ensure that operations are sufficiently scalable?

  5. Team Development: Discuss not only your vision for the continued growth of your team from a hiring perspective (net new additions by job function) but also how you will partner with and develop team members to become future leaders. How will you work with team members to serve existing clients, and help them acquire the skills needed to succeed in the future business? Do you envision a future internal succession, and if so, how do you plan on facilitating it?

  6. Financial Analysis: Provide the current and project the future financial status of your practice through a balance sheet, income and cash flow statements, an operating budget, and a break-even analysis. This financial analysis will serve to provide you with the guardrails for running a profitable business, as well as provide potential investors with the information they need to accurately determine the value of your firm.

Interested in a Benchmark Asessment Report to jumpstart your new Business Plan? 

swot analysis for financial advisor practice

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Topics: Organizing Priorities, Financial Planning, financial advisor business plan