Financial Advisor Business Plan Template
If you want to start a Financial Advisor business or expand your current Financial Advisor or Financial Planning Business, you need a business plan.
Fortunately, you’re in the right place. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of financial advisory company business plans.
Sample Business Plan For Financial Advisors
The following financial advisor business plan template gives you the key elements you must include in your plan.
I. Executive Summary
Business Overview
[Company Name], located at [insert location here] is a new wealth management firm providing financial advisory and investments to its clients. The Company will operate in a Professional setting, conveniently located next to [notable bank] in the center of the financial district. [Company Name] is headed by [Founder’s Name], an MBA Graduate from UCLA with 20 years of experience working as a financial advisor in such firms as Merrill Lynch Wealth Management.
Products Served
[Company Name] will focus on close client relationships. It has a full time assistant who, among other things, will focus on answering client’s daily questions and drafting newsletters to increase client communication.
The founder, [Founder’s Name], will also focus on answering his clientele’s needs. In addition to newsletters and email updates, [Founder’s Name] will hold seminars on financial strategies and investment presentations for his clients.
[Company’s Name] services include private wealth management, retirement services and other financial planning, and life insurance offerings.
Customer Focus
[Company Name] will primarily serve the residents within a 20-mile radius of our location. The demographics of these customers are as follows:
- [Number of residents]
- [Average or median income]
- [% married, % families]
- [% professional occupations]
- [Median age]
In addition to this prime adult demographic for a wealth management firm, there are four large banks in the area. Working professionals, especially those in the financial sector, realize the importance of early retirement planning and investment advice and create a perfect target market.
Management Team
[Company Name]’s most valuable asset is the expertise and experience of its founder, [full name]. [First name] has been a certified financial advisor for the past 20 years. He has spent much of his career working at Merrill Lynch’s Wealth Management division. He spent the more recent portion of his career at a smaller firm, Century Asset Management, where his client base doubled and his assets-under management tripled in 8 years.
[Company name] will also employ an experienced assistant to help with various administrative duties around the office. [Assistant’s name] has experience working with C-level executives and has spent significant time as an administrator
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The Company will fill a specific market niche in the growing community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to make use of our services when launched.
- Our location is in a high-volume area with easy access from multiple residential and commercial district zones.
- The management team has a track record of success in the private wealth management business.
- The local area is currently under served and does not have specialized financial advisors.
Financial Highlights
[Company Name] is currently seeking $125,000 to launch. Specifically, these funds will be used as follows:
- Store design/build: $60,000
- Working capital: $65,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Topline projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,080,000 | $2,472,768 | $2,830,825 | $3,240,728 | $3,709,986 |
| Total Expenses | $962,000 | $1,539,107 | $1,719,742 | $1,901,321 | $2,112,641 |
| EBITDA | $118,000 | $933,661 | $1,111,082 | $1,339,407 | $1,597,344 |
| Depreciation | $25,600 | $25,600 | $25,600 | $25,600 | $25,600 |
| EBIT | $92,400 | $908,061 | $1,085,482 | $1,313,807 | $1,571,744 |
| Interest | $29,946 | $26,202 | $22,459 | $18,716 | $14,973 |
| Pre Tax Income | $62,455 | $881,858 | $1,063,023 | $1,295,091 | $1,556,772 |
| Income Tax Expense | $21,859 | $308,650 | $372,058 | $453,282 | $544,870 |
| Net Income | $40,595 | $573,208 | $690,965 | $841,809 | $1,011,902 |
| Number of locations | 1 | 1 | 1 | 1 | 1 |
| Average customers/day | 20 | 22 | 23 | 25 | 27 |
| Number of orders | 3,600 | 7,776 | 8,398 | 9,070 | 9,796 |
II. Company Overview
Who is [Company Name]?
[Company Name], located at [insert location here] is a new wealth management firm providing financial advisory and investments to its clients. The Company will operate in a Professional setting, conveniently located next to [notable bank.] [Company Name] is headed by [Founder’s Name], an MBA Graduate from UCLA with 20 years of experience working for Merrill Lynch.
[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the financial services sector for some time, it was in [month, year] that he decided to launch [Company Name]. Specifically, during this time, [Founder] met with a former friend and fellow independent financial advisor in Fort Lauderdale who has had tremendous success. After discussing the business at length, [Founder’s Name] clearly understood that a similar business would enjoy significant success in his hometown.
Specifically, the customer demographics and competitive situations in the Fort Lauderdale location and in his hometown were so similar that he knew the business would work. After surveying the local population, [Founder’s name] went ahead and founded [company name].
[Company Name]’s History
Upon returning from Fort Lauderdale, surveying the local customer base, and finding a potential retail office, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
The business is currently being run out of [Founder’s Name] home office, but once the lease on [Company Name]’s office location is finalized, all operations will be run from there.
Since incorporation, the Company has achieved the following milestones:
- Found office space and signed Letter of Intent to lease it
- Developed the company’s name, logo and website located at [website]
- Hired an interior designer for the decor and furniture layout
- Determined equipment and fixture requirements
- Began recruiting key employees
[Company Name]’s Products & Services
[Founder’s Name] will be able to provide clients with the following services:
- Asset Management: investing and managing client’s savings depending on portfolio preferences.
- Financial Planning: detailed planning and a structured layout for retirement or child’s funds for college.
- Hourly Advice: advising clients that do not have assets with [Company Name] on an hourly basis.
- Life Insurance: providing the option of life insurance to clients as part of their long term and retirement planning.
As [Founder’s Name] understands, the key to a successful advisory business is being accessible and staying in contact with clients. [Founder’s Name] will have a full time assistant on hand who, among other things, will manage client’s phone calls and answer questions as possible.
[Company Name] will also feature a Bloomberg Terminal and several major publications in order to stay informed on important news and market trends.
III. Industry Analysis
The financial advisory services industry is strongly correlated with the strength of the economy as a whole. Last year, industry revenues fell as the market fell, declining by 34% to $37.6 billion. Revenues are expected to recover again this year, reaching the $38 billion mark.
Most of the industry consists of small, independent financial advisors and firms. The lion’s share of the private wealth management industry is composed of these individual advisors. Large firms often pay significant amounts for an independent advisor to join them and bring their client base along. Overall, employment in the industry is currently declining. It is estimated that 225,000 people were employed in financial advisory services in last year, and that only 213,800 will be employed this year.
The market served by financial advisors is a diverse one. 47% of the client base is made up of High Net Worth Individuals, HNWIs for short. These are classified by the Securities and Exchange Commission as people with at least $750,000 in investment-ready assets, or $1.5 million in investment-ready assets held in a marriage. These clients tend to be aging individuals who are beginning to consider retirement. This fits with the industry trend toward retirement planning services. Financial advisory services are not reserved exclusively for HNWIs, however. There are an estimated 120 million households with $17 trillion in assets in the United States, many of which require such services.
The next largest customer segment served by financial advisors is made up of businesses and the US government, holding 23% of the business. Retail clients make up 13% of the business, followed by hedge funds and other clients with 7% and 10%, respectively.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the residents of [company location] and the immediately surrounding areas as well as those who work in [company location].
The area we serve is populated mostly by the middle- and upper-middle class; as a result, they have both the need for financial advisory services and the means to pay for it.
The precise demographics of the town in which our location resides is as follows:
| Wilmette | Winnetka | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
The Company will primarily target the following customer segments:
- Aging Baby Boomers: The area in which the Company will operate has a significant population of baby boomers. This generation is rapidly approaching their retirement age, and has a great deal of disposable or discretionary income. After experiencing a life of great financial prosperity, these are often married couples or empty nesters. They seek to ensure that their own nest eggs will support the lifestyle they want to live after they stop working, and that their wealth will be preserved appropriately for future generations of family members. These customers typically have extensive networks of individuals in similar economic circumstances, and as such will be an excellent source of referrals.
- Middle-aged Professionals: [Company name] is located along a well-traveled commute route. By offering a convenient location, effective advertising, and a strong product mix, the Company will draw in a significant crowd of professionals with rising earning power, who wisely seek to manage their money for the future.
- Young parents: There is a growing population of young parents with small children in the Company’s immediately surrounding area. These people will seek solutions to provide for the future economic well-being of their new families, purchasing services such as life insurance.
V. Competitive Analysis
Direct & Indirect Competitors
The following financial advisory firms are located within a 20 mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Prudential Financial
Prudential Financial is the city’s only major financial advisory firm. The company focuses primarily on the sale of life insurance however, and offers financial advice as a support to its primary business.
As the second largest US life insurer, Prudential focuses its efforts on maintaining top position through the sale of individual life insurance, long term care, and disability insurance.
Prudential also offers financial advice. This includes asset management services, mutual funds, and retirement services.
Internet Brokers
Many internet brokers have emerged since 2001 and cater to those individuals looking for minimal advice while having more felt control over their investments. These firms often offer personal banking and investment tools for stocks, mutual funds, ETFs, and other securities.
Furthermore, internet brokers offer professional advice and software products such as ratings on securities and articles from industry experts. However, they leave the final act of investing in the hands of the individual.
These online brokers commonly refer to themselves as discount brokers, and charge anywhere from $5 to $13 per trade. Premium accounts may be charged flat rates or given a number of free trades per month, but typically require a certain amount of account activity.
Some of the more notable online brokerage firms are E-Trade, Scottrade and Charles Schwab.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location is near the center of town, in the financial district of the city. It’s visible from the street with many working professionals walking to and from work on a daily basis; giving passerby’s a direct look at our firm, most of which are part of our target market.
- Client oriented service: [Company Name] will have a full time assistant to primarily keep in contact with clients and answer their everyday questions. [Founder’s Name] realizes the importance of accessibility to his clients, and will further keep in touch with his clients through monthly presentations, seminars, and updates per email and newsletters.
- Management: [Founder’s Name] has been extremely successful working in the financial services sector and will be able to use his previous experience to grant his clients detailed insight into the financial world. His unique qualifications will serve customers in a much more sophisticated manner than [Company Name’s] competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows many of the local leaders, newspapers and other influences. Furthermore, he will be able to draw from his ties to the community in order to build up a heavy asset base in a short amount of time.
VI. Marketing
[Company name] will use several strategies to promote its name and develop its brand. By using an integrated marketing strategy, [company name] will win clients and develop consistent revenue streams.
The [Company name] brand
The [Company name] brand will focus on the Company’s unique value proposition:
- Client-focused financial services, where the Company’s interests are aligned with the customer
- Service built on long-term relationships
- Big-firm expertise in a small-firm environment
Promotion Strategy
Targeted Cold Calls
[Company name] will initially invest significant time and energy into contacting potential clients via telephone. In order to improve the effectiveness of this phase of the marketing strategy, a highly-focused call list will be used, targeting individuals in areas and occupations that are most likely to demand the services of a financial advisor. As this is a very time-consuming process, it will primarily be used during the startup phase to build an initial client base.
Referrals
[Company name] understands that the best promotion comes from satisfied customers. The Company will encourage its clients to refer their friends and family by providing economic or financial incentives for every new client produced. This strategy will increase in effectiveness after the business has already been established.
Additionally, [company name] will aggressively network with local area banks that do not offer the same product mix—banks that do not offer life insurance, in particular. This network will generate referral leads from banking clients. In return, clients who seek services that [Company name] does not provide will be redirected to these banks.
Internet
[Company name] will invest resources in two forms of internet promotion—organic search engine optimization and pay-per-click advertising. The Company will develop its website in such a manner as to direct as much traffic from search engines as possible. Additionally, it will used highly-focused, specific keywords to draw traffic to its website, where potential clients will find a content-rich site that presents [Company name] as the trustworthy, well-qualified financial advisory firm that it is.
Publications
[Company name] will place print advertisements in key local publications, including newspapers, area magazines, and local sport programs. Additionally, the Company will print brochures and place them in specific locations frequented by target individuals, such as premium stores and professional service providers.
Direct Mail
The Company will use a direct mail campaign to promote its brand and draw clients, as well. The campaign will blanket specific neighborhoods with simple, effective mail advertisements that highlight the credentials and credibility of [Company Name] as a financial advisor.
VII. Operations
[Company name] will carry out its day-to-day operations primarily on an appointment basis. Clients will make regularly scheduled appointments to review the contents and progress of their investment portfolio. These will primarily occur in-office or in-home in order to increase the strength of the client relationship. If necessary, appointments can be conducted over the telephone. Walk-in financial advice will also be provided on a limited basis. Walk-in clients will be billed on an hourly basis.
[Founder’s name] will work on an as-needed basis, but can be expected to be present in the office during normal business hours. The company will also employ an administrative assistant who will also support marketing and client relationship development efforts.
Milestone targets
Company name]’s long term goal is to become the number-one provider of financial advisory services and investment products in the [city] area. We seek to be a household name and the standard by which other providers are judged. We seek to do this by ensuring customer satisfaction and developing a loyal and successful clientele.
The following are a series of path steps that will lead to the vision of long term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] storefront |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Reach $10M of assets under management |
| [Date 6] | Reach break-even |
VIII. Management Team
[Full Name]
[Title]
[Company Name]’s most valuable asset is the expertise and experience of its founder, [full name]. [First name] has been a certified financial advisor for the past 20 years. He has spent much of his career working at Merrill Lynch’s Wealth Management division. He spent the more recent portion of his career at a smaller firm, Century Asset Management, where his client base doubled and his assets-under management tripled in 8 years. [Name] has acquired a reputation for success and has earned the respect and trust of his clients. Prior to working in the financial services industry, [name] worked for the private equity firm Bruns & Potter Partners, and earned his MBA from UCLA. He began his career as an intern at an integrated consulting and investment banking firm in El Segundo, California.
[Company name] will also employ an experienced assistant to help with various administrative duties around the office. [Assistant’s name] has experience working with C-level executives and has spent significant time as an administrator in the financial services industry.
IX. Financial Plan
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $125,000 of debt capital to open its office. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: $60,000
- Working capital: $65,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions & Forecasts
The following table reflects the key revenue and cost assumptions made in the financial model.
| Number of clients | Average |
|---|---|
| Year 1 | 42 |
| Year 2 | 57 |
| Year 3 | 69 |
| Year 4 | 78 |
| Year 5 | 86 |
| Hourly Fee | $150 |
| Life Insurance | $1,200 |
| Fee of Assets | 1.30% |
| Annual Rent | $60,000 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
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