Smarter faster financial advisor business plan - 5 tips [Checklist]

This blog post will provide five simple financial advisor business plan ideas to serve clients faster and smarter around non-core items. This post will cover:

• Solid core competencies of financial advisors
• Non-core aspects of financial advisors service model
• Five simple tips for a financial advisor business plan for optimization

Background on a Financial Advisor Business Plan

Nobody wants to write a financial business plan. Let alone the business owner of wealth management or financial planning firm. Yet their discipline knows that remains a cornerstone of their accountable annual success. Advisors breaking off from another firm or broker/dealer relationship will need to create a business plan from scratch. The hard part of any business plan rests on the accountability and review of the program itself. These plans exist in a dynamic world. They can pivot based on successes and failures. Just ask Jeff Bezos at Amazon how many times their business plans changed. Not the core focus but the strategies and tactics around the core focus.

They are talking to super successful RIA firms, their wealth management business models center on a 1, 3 5, 7, and 10-year plan. They break it down between revenue, expenses, net profit, marketing focus, client focus, and financial advisor services delivery. I always remember that President Reagan’s resume length - one page. If the President of the United States can condense achievements, etc., into one page, so can an advisor business model plan.

Background on our business plan

As an aside, the original business model and plan for Wealth Advisors Trust Company ignored everyone else or how our competition thought about trustee services for financial advisors and their clients. Our focus - what model and plan leveraged technology for efficiency and effectiveness without losing the human touch. Every year the business model and plans get updated but with a twist. The owners’ group starts the review with one question - knowing what we know today if we started a trust company that is advisor friendly, what would we do differently?  A dynamic business plan begins with the mindset that sacred cows cannot exist. All the financial modeling falls neatly into place. The ability to hire the right employees who share that vision makes servicing clients natural and comfortable.

Solid core competencies of wealth management or financial planning firms  

Any company offers solutions or products to customers. Those solutions or products depend on processes. Those processes follow a dynamic supply chain mindset of actions. Financial planning or wealth management firms have great discipline around the following core competencies:

• Asset management
• Liability management (Life)
• Budgeting (household focus)
• Behavioral finance (stay true to the plan by controlling fear and greed)
• Retirement planning
• Onboarding of new clients

Those core competencies depend on software tools and how they communicate to reduce repetitive or non-efficient actions. These firms’ staff has created financial advisor systems involving various employees or teams within these firms—simple stuff.

Non-core competencies of wealth management or financial planning firms

Wealth management and financial planning firms building out their business plans depend on a range of core competencies. Sometimes this rests on the AUM of the firm. Some firms employ these non-core competencies as a core competency due to their size, experience, and expertise level. Even if these are non-core competencies for these firms, using a few simple delegation ideas can heighten their value add and not straying out of their lane.

• Tax management
• Trust and estate planning
• Property and Casualty insurance
• Digital marketing
• Key Performance Indicator dashboard

The importance of building and reviewing the financial advisor plan depends on the admitting of core and non-core competencies, creating a supply chain process for effective decision making and advice to clients around a profitable firm.

These non-core competencies for most firms or even when they are core competencies become challenging to merge into standard software plans. They do not have neat and predictable If This Then That processes. Think of a tree diagram with spaces and distances increasing and decreasing in real-time. Makes even my head spin thinking about it. Creating a financial advisor business plan should rest on easy to implement and even easier to monitor and adapt around solid core and non-competencies.

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Five tips for smarter, faster financial advisor business plans

Everything I consider around decisions rests on thinking through what needs to be done via a supply chain mindset. That makes it easy for my ADD brain not to get distracted (e.g., like a puppy seeing a butterfly). Part of a business plan, from my perspective, centers on serving the client, finding new clients, and enhancing the client experience leading to healthy net profit margins for the advisor. If you have a different definition that these tips will not resonate. Here we go:

• Tax management: Your systems already calculate expected incomes and unrealized gains throughout the calendar year. Some of your clients have operating businesses, assets in qualified plans, trusts, and held outright. CPAs come in two forms: tax compliance (does just the tax returns) or tax compliance with tax planning (rare CPA breed). Your business plans should incorporate two meetings a year with your clients CPA: (1) Jan/Feb; (2) Aug/Sept. The CPA and you communicate on known knowns and can plan around unknowns. All of your CRM systems can set tasks and incorporate notes for further discussions with your client.
• Trust and estate planning: A very complicated topic, even for attorneys and trust companies. A financial advisor can not only add value to this topic but create a streamlined plan around it. When clients make a Will or Trust, the discussion rests on their wealth and family philosophy. Those questions are where financial advisors shine. A financial advisor cannot offer trust and estate planning from a legal perspective. They can help raise big and key questions without getting tripping into giving legal advice. I wrote another blog on how financial advisors can avoid losing control when working with an estate attorney.
• Property and Casualty insurance: Remember my definition plan of a financial advisor business plan incorporated serving clients and enhancing their client experience with your services. Build processes within your CRM system to formalize the critical point here, an annual review of their PnC insurance eight weeks before the end of the insurance term. Bring in the client’s PnC agent and create a collaborative moment to formalize the review. Very few advisors do this or incorporate it into their business models.
• Digital marketing: There are two types: inbound and outbound. Inbound marketing centers on people calling via referrals or finding you on the internet. For internet results, you need search engine optimization strategy, which requires writing lots of content optimized around keywords. I could write a book on this stuff. Outbound marketing covers webinars, seminars, lunches, etc. Pretty hard during COVID. The digital marketing plan must be tied to your overall marketing plan. The trick centers on knowing what value you get for the number of dollars spent acquiring new clients. You must track the data in a critical OCD way to ensure the value-add exists. Marketing firms are idiots when it comes to this point. Their people hate rejection and hard cold accountability. Advisors live in rejection and hard cold accountability.
• Key Performance Indicator dashboard: At last, the most uncomplicated and most potent tip. Sorry to make you read down to this point. A Key Performance Indicator (KPI) dashboard tracks all your actions’ successes and failures in a straightforward place. Netflix and Facebook have a KPI dashboard down to the zip code, by gender, by age, by education, by race, by salary, and by side interests. As I like to say, if you are not paying for a service, the product is you (e.g., Google, Facebook, Instagram, et al.). The KPI’s for any financial advisor business plan should include:
• Net profit margin
• Client turnover
• Client lifetime value
• Client acquisition cost