business plan for wealth management

Wealth Management Business Plan Template

Written by Dave Lavinsky

Wealth Management Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their wealth management companies. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a wealth management business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your wealth management business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start a wealth management business or grow your existing wealth management company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your wealth management business to improve your chances of success. Your wealth management business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Wealth Management Businesses

With regard to funding, the main sources of funding for a wealth management business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for wealth management companies.

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How to write a business plan for a wealth management business.

If you want to start a wealth management business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your wealth management business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of wealth management business you are running and the status. For example, are you a startup, do you have a wealth management business that you would like to grow, or are you operating a franchise of wealth management businesses?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the wealth management industry.
• Discuss the type of wealth management business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of wealth management business you are operating.

For example, you might specialize in one of the following types of wealth management businesses:

• Personal Financial Planning and Advice: As the most common form of wealth management, this type of advisory service includes an assessment of financial needs and decisions on investments.
• Asset Management and Allocation: This type of wealth management business assists with maximizing and protecting wealth over the long-term.
• Estate Planning: Wealth management advisory services include oversight of assets, investing for the future and protecting assets.
• Tax Accounting: A tax accounting wealth management advisor oversees all assets and tax preparation, filings, estimates and other tax-related business items.

In addition to explaining the type of wealth management business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of clients, the total portfolio assets managed, reaching X number of wealth management referrals, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the wealth management industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the wealth management industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your wealth management business plan:

• How big is the wealth management industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your wealth management business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your wealth management business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, families, corporations, foundations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of wealth management business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regard to demographics, include a discussion of the ages, locations, occupations and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other wealth management businesses.

Indirect competitors are other options that customers may use that aren’t directly competing with your service. This includes tax accountants, online wealth-building services, and stock brokers. You need to mention such competition, as well.

For each direct competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them, such as

• What types of customers do they serve?
• What type of wealth management business are they?
• What is their pricing (premium, low, etc.)?
• Do they offer any unique or special values for customers?
• What are their weaknesses?

With regard to the last two questions, think about your answers from the customers’ perspective. And, don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide options for family trust management?
• Will you offer management services that your competition doesn’t?
• Will you provide better customer service than those of your competitors?
• Will you offer packaged services for corporations?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a wealth management business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of wealth management company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide free initial consultations, guaranteed profits on certain assets, or yearly analysis at low to no cost?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the services you offer and their prices.

Place : Place refers to the site of your wealth management company. Document where your company is situated and mention how the site will impact your success. For example, is your wealth management business located in an upper socioeconomic location? Does your business offer amenities for special clients, such as season tickets to venues of their choice? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your wealth management marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in wealth-building periodicals
• Reach out to individuals via personal referrals
• Offer introductory meetings to corporations
• Engage in email marketing by blogging in a Q & A section
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your wealth management business, including answering calls, setting appointments, planning and providing services, billing clients, managing and maintaining accounts, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth new client, or when you hope to reach $X in revenue. It could also be when you expect to expand your wealth management business to a new city.

Management Team

To demonstrate your wealth management business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing wealth management businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a wealth management business or successfully running a small brokerage firm.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you book 5 wealth management clients per week and offer on-site monthly advisory services for corporations? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your wealth management business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a wealth management business:

• Cost of advisory online access to investment information
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of contracted clients you serve.

Writing a business plan for your wealth management business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the wealth management industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful wealth management business.

Wealth Management Business Plan FAQs

What is the easiest way to complete my wealth management business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your wealth management company business plan.

How Do You Start a Wealth Management Business?

Starting a Wealth Management business is easy with these 14 steps:

• Choose the Name for Your Wealth Management Business
• Create Your Wealth Management Business Plan
• Choose the Legal Structure for Your Wealth Management Business
• Secure Startup Funding for Your Wealth Management Business (If Needed)
• Secure a Location for Your Business
• Register Your Wealth Management Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Wealth Management Business
• Buy or Lease the Right Wealth Management Business Equipment
• Develop Your Wealth Management Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Wealth Management Business
• Open for Business

Where Can I Download a Free Business Plan Template PDF?

Click here to download the pdf version of our basic business plan template.

Our free business plan template pdf allows you to see the key sections to complete in your plan and the key questions that each must answer. The business plan pdf will definitely get you started in the right direction.

We do offer a premium version of our business plan template. Click here to learn more about it. The premium version includes numerous features allowing you to quickly and easily create a professional business plan. Its most touted feature is its financial projections template which allows you to simply enter your estimated sales and growth rates, and it automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements. Here’s the link to our Ultimate Business Plan Template.

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OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s business plan services can give you a winning business plan.

Other Helpful Business Plan Articles & Templates

Wealth Management Business Plan Template

Wealth management business plan.

You’ve come to the right place to create your Wealth Management business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Wealth Management companies.

Below is a template to help you create each section of your Wealth Management business plan.

Executive Summary

Business overview.

Ellis Wealth Management is a new wealth management firm located in Seattle, Washington. Our mission is to help the residents of Seattle create a financially sound future and achieve all their financial goals. We plan to do this by offering a wide range of wealth management services, including financial planning, estate planning, and retirement planning. We are a client-focused firm that is dedicated to helping our clients make all their dreams come true.

Ellis Wealth Management’s most valuable asset is the expertise and experience of its founder, Jared Ellis. Jared has been a certified financial advisor for the past 20 years. Throughout his career, he has developed a loyal client base, and many clients have stated that they will switch to Ellis Wealth Management once the company is established and running. Jared’s combination of skills, financial knowledge, and loyal following will ensure Ellis Wealth Management’s success.

Product Offering

Ellis Wealth Management will provide wealth management services to the residents of Seattle. These services will include financial planning, asset management, estate planning, and retirement planning. Ellis Wealth Management will prioritize client relationships and will hire a full-time assistant who will be dedicated to answering client questions and drafting newsletters and other communications.

The founder, Jared Ellis, will also focus on answering his clientele’s needs. In addition to newsletters and email updates, Jared Ellis will hold seminars on financial strategies and investment presentations for his clients.

Customer Focus

Ellis Wealth Management will serve the affluent and middle-class residents of Seattle and the surrounding areas. The area has a large demographic of residents with disposable income who are interested in managing their wealth and finances better. They have diverse needs, from needing to better manage their assets to planning their wills and estates. We will provide a wide range of wealth management services to serve this diverse demographic.

Management Team

Success factors.

Ellis Wealth Management will be able to achieve success by offering the following competitive advantages:

• Location: Ellis Wealth Management’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 passersby a direct look at our firm, most of which are part of our target market.
• Client-oriented service: Ellis Wealth Management will have a full-time assistant to primarily keep in contact with clients and answer their everyday questions. Jared Ellis 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: Jared 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 Ellis Wealth Management’s competitors.
• Relationships: Having lived in the community for 25 years, Jared Ellis 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.

Financial Highlights

Ellis Wealth Management is currently seeking $350,000 to launch. Specifically, these funds will be used as follows:

• Office design/build: $50,000
• Office equipment, supplies, and materials: $50,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $50,000
• Working capital: $50,000

The following graph below outlines the pro forma financial projections for Ellis Wealth Management.

Company Overview

Who is ellis wealth management, ellis wealth management’s history.

Upon surveying the local customer base and finding a potential office, Jared Ellis incorporated Ellis Wealth Management as an S-Corporation in January 2023.

The business is currently being run out of Jared’s home office, but once the lease on Ellis Wealth Management’s office location is finalized, all operations will be run from there.

Since incorporation, the Company has achieved the following milestones:

• Found an office space and signed Letter of Intent to lease it
• Developed the company’s name, logo, and website
• Hired an interior designer for the decor and furniture layout
• Determined equipment and fixture requirements
• Began recruiting key employees

Ellis Wealth Management’s Services

Industry analysis.

The wealth management industry is strongly correlated with the strength of the economy as a whole. When the wealth management industry (or the finance industry in general) is down, then that is a sign that the economy is struggling. The economy suffered greatly during the COVID pandemic but is now bouncing back to being stronger than ever.

According to Mordor Intelligence, the wealth management industry was valued at USD 3.67 billion in 2021 and is projected to grow at a CAGR of 14.67% from now until 2027. This is substantial growth and shows the economy is back in full swing. Wealth management firms both small and large can expect significant growth and an increase in profits over the next several years.

In addition to the economy bouncing back, there are a few other factors that affect this projected growth. First, more people have disposable income and are looking for wise ways to save or use that extra money. Furthermore, financial education is becoming far more popular than it was years ago. This means that more people are learning the importance of wealth management and are eager for services that will help them save and grow their money. The widespread interest in financial education has created a strong demand for wealth management services.

When considering all these factors, the wealth management industry is projected to boom in the next few years. This is good news for firms like Ellis Wealth Management and shows that our firm has a great chance to succeed.

Customer Analysis

Demographic profile of target market.

Ellis Wealth Management will serve the residents of Seattle, Washington, and the immediate surrounding areas. The area is populated by middle and upper-class residents who have diverse wealth management needs. They also have the disposable income to hire a wealth management firm to help manage their finances.

The precise demographics of Seattle are as follows:

Customer Segmentation

Ellis Wealth Management will primarily target the following customer profiles:

• Higher-income individuals
• Individuals 55+
• Middle-aged parents with children

Competitive Analysis

Direct and indirect competitors.

Ellis Wealth Management will face competition from other companies with similar business profiles. A description of each competitor company is below.

Merrill Lynch

Merrill Lynch is a longstanding financial firm that was acquired by Bank of America in 2009. The firm has a client-oriented focus that prioritizes the individual needs of each client. The firm offers a long list of wealth management services, including banking services and retirement planning. When clients choose Merrill Lynch, they are offered a wealth management strategy that is tailored to them and helps support their dreams and financial goals.

Edward Jones

Edward Jones is a global wealth management firm that assists over seven million investors worldwide. It is a privately owned company, which allows its advisors to focus on client relationships rather than shareholder returns. They offer a long list of financial advising and wealth management services, all of which are based on respect, attention, and service.

Morgan Stanley

Founded in 1935, Morgan Stanley started as a small Wall Street partnership but has now grown to be a global firm with 80,000 employees. Morgan Stanley is committed to its clients and provides them with a wide range of financial planning and wealth management services. Everything the company does is backed by its five core values: Do the right thing, put clients first, lead with exceptional ideas, commit to diversity and inclusion, and give back. For nearly a century, Morgan Stanley has committed to these values, which has earned them a loyal following and tremendous success.

Competitive Advantage

Ellis Wealth Management will be able to offer the following advantages over the competition:

Marketing Plan

Brand & value proposition.

Ellis Wealth Management will offer a unique value proposition to its clientele:

• 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

Promotions Strategy

The promotions strategy for Ellis Wealth Management is as follows:

Targeted Cold Calls

Ellis Wealth Management 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 need wealth management services. As this is a very time-consuming process, it will primarily be used during the startup phase to build an initial client base.

Ellis Wealth Management 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.

Social Media

Ellis Wealth Management will invest heavily in a social media advertising campaign. The company will create social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographics.

Website/SEO

Ellis Wealth Management will invest heavily in developing a professional website that displays all of the company’s services. It will also invest heavily in SEO so that the firm’s website will appear at the top of search engine results.

The fees and hourly pricing of Ellis Wealth Management will be moderate and competitive so clients feel they are receiving great value when utilizing our wealth management services.

Operations Plan

The following will be the operations plan for Ellis Wealth Management.

Operation Functions:

• Jared Ellis will be the Owner of Ellis Wealth Management. In addition to providing wealth management services, he will also manage the general operations and executive aspects of the business.
• Jared Ellis is joined by a full-time administrative assistant, Jacob Hubert, who will take charge of the administrative tasks for the company. He will also be available to answer client questions and will be the primary employee in charge of client communications.
• As the company builds its client base, Jared Ellis will hire more financial advisors to provide wealth management services, attract more clients, and grow our business further.

Milestones:

Ellis Wealth Management will have the following milestones completed in the next six months.

• 2/2023 Finalize lease agreement
• 3/2023 Design and build out Ellis Wealth Management
• 4/2023 Hire and train initial staff
• 5/2023 Kickoff of promotional campaign
• 6/2023 Launch Ellis Wealth Management
• 7/2023 Reach break-even

Financial Plan

Key revenue & costs.

Ellis Wealth Management’s revenues will primarily come from charging an hourly rate and fees for the wealth management services we provide.

The notable cost drivers for the company will include labor expenses, overhead, and marketing expenses.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Year 4: 100
• Year 5: 125
• Hourly Fee: $250
• Fee of Assets: 50%
• Annual Rent: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, wealth management business plan faqs.

What Is a Wealth Management Business Plan?

A wealth management business plan is a plan to start and/or grow your wealth management business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Wealth Management business plan using our Wealth Management Business Plan Template here .

What are the Main Types of Wealth Management Businesses?

There are a number of different kinds of wealth management businesses , some examples include: Personal Financial Planning and Advice, Asset Management and Allocation, Estate Planning, and Tax Accounting.

How Do You Get Funding for Your Wealth Management Business Plan?

Wealth Management businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Wealth Management Business?

Starting a wealth management business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Wealth Management Business Plan - The first step in starting a business is to create a detailed wealth management business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your wealth management business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your wealth management business is in compliance with local laws.

3. Register Your Wealth Management Business - Once you have chosen a legal structure, the next step is to register your wealth management business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your wealth management business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Wealth Management Equipment & Supplies - In order to start your wealth management business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your wealth management business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

US wealth management: A growth agenda for the coming decade

Wealth management is a growth industry, but it is experiencing a set of accelerating disruptions. While the pandemic challenged the performance of the US wealth management industry for much of 2020, the last 12 months have given rise to optimism that the conditions for a significant wave of innovation and experimentation across the wealth management ecosystem are in place. The conditions include rapid technological advancements, fast-evolving consumer needs and behaviors (accelerated by the pandemic), and an environment of economic stimulus.

About the authors

This article is a collaborative effort by Pooneh Baghai , Alex D’Amico , Vlad Golyk, Agostina Salvo, and Jill Zucker .

To thrive in this dynamic environment, firms must prioritize growth, adopt an innovation mindset, and be prepared to reallocate resources rapidly in response to the changing context. Finally, to free resources for strategic investment and prepare for any potential market downturn, firms can rethink their cost structures and improve the industry’s spotty record on cost management.

To guide these efforts, this paper offers a brief overview of the US wealth management industry’s present conditions and then presents four themes that define the new growth narrative we foresee. We recommend agenda items for wealth managers to address as they plan how to flourish in the changing ecosystem. Finally, we offer questions for organizational self-assessment.

Coming out of the crisis: Resilient but not unscathed

At face value, the US wealth management industry entered 2021 from a position of strength—record-high client assets, record growth in the number of self-directed and advised clients, and healthy pretax margins (Exhibit 1). However, beneath these strong headline numbers, the story was mixed, with the worst two-year revenue growth since 2010, as well as negative operating leverage. The depressed margins and profit pools that resulted were caused primarily by rock-bottom interest rates and uneven cost discipline (Exhibit 2).

Consequently, while the industry is now benefiting from vigorous market performance, it faces significant crosscurrents: equity-market and interest-rate uncertainty and industry-specific challenges including lack of cost discipline, increased competition from new entrants, and an aging and shrinking advisor force.

Despite this near-term uncertainty, US wealth management remains a growth industry, albeit with moderating revenue growth projections. McKinsey modeling suggests industry revenue pools will grow by about 5 percent per year over the next five years, 1 Long-term asset class forecast, Q2 2021 , State Street Global Advisors, April 22, 2021, ssga.com. driven by moderating market performance, moderate net flows, and the continued shift from brokerage to advisory (where revenue yields are typically higher). However, the growth will not be equally split among industry segments. We expect digital advice models, including robo- and hybrid advisory, to continue growing fastest, potentially even outperforming their historical revenue growth of more than 20 percent per year. Next in terms of growth will be registered investment advisors (roughly 10 percent projected annual growth rate), followed by national/regional broker–dealers (6 percent), direct brokerages (5 percent), wirehouses (2 percent), and other broker–dealers (independent, retail, and insurance owned) plus private banks (1 percent). If interest rates return to prepandemic levels, wirehouses and direct brokerages will disproportionately benefit, given their reliance on interest income from cash for profitability, with the overall growth rate for the industry reaching about 7 percent a year—similar to the growth that occurred between 2015 and 2018.

A growth agenda for the coming decade

Over the last 18 months, the industry has spurred a significant wave of innovation and experimentation. It is also facing long-standing demographic shifts that will redistribute wealth among subsegments. This combination of forces will shape growth trends for years to come. We see four key themes: fast-growth segments, new client needs, new products, and new business models (Exhibit 3).

Fast-growth segments offer new potential

Three investor segments are showing signs of significant and lasting growth: women, engaged first-time investors, and a segment we call hybrid affluent investors.

Women are taking center stage as investors over the next decade. Today, women control a third of total US household investable assets—approximately $12 trillion. Over the next decade, this share will grow. The biggest cause of this shift will be demographics: as baby boomer men die, many will cede control of assets to their female spouses, who tend to be both younger and longer lived. By 2030, American women are expected to control much of the $30 trillion in investable assets that baby boomers will possess—a potential wealth transfer that approaches the annual GDP of the United States. At the same time, younger affluent women are becoming more financially savvy; for example, 30 percent more married women are making financial and investment decisions than five years ago. 2 For more on these trends, see Pooneh Baghai, Olivia Howard, Lakshmi Prakash, and Jill Zucker, “ Women as the next wave of growth in US wealth management ,” July 29, 2020, McKinsey.com.

$3O trillion in investable assets will be possessed by baby boomers by 2030, much of it controlled by women

A new wave of engaged investors are opening accounts. The resurgence of the engaged-investor, or active-trader, segment has been one of the most headline-catching disruptions in the industry. Since the start of 2020, more than 25 million new direct brokerage accounts have been opened, a significant percentage by first-time investors. This growth resulted from a confluence of prepandemic market developments (for example, the elimination of online brokerage commissions, access to fractional share capabilities) and pandemic-related trends such as high savings rates (enabled by lower consumption).

While this segment’s exponential growth is likely not sustainable (for example, there was a sharp decline in trading app downloads and active daily users in the third quarter of 2021), it remains poised for accelerated growth over the next decade, given engaged investors’ relatively low median age of 35. 3 Schwab Generation Investor Study 2021, aboutschwab.com. The opportunity for wealth managers is to serve this segment by meeting their demand for direct brokerage-based investing and to build deeper relationships with them over time—for example, by recognizing that these new investors tend to express their personal values in their investment decisions.

40% increase in total direct brokerage accounts since the start of 2020—more than 25 million new accounts

Hybrid affluent investors are an opportunity to differentiate. While headlines have focused on the rise of first-time young investors with typically low assets, growth in the hybrid investor segment—those with at least one self-directed account and a traditional advisor—has been overlooked. In 2021, a third of affluent investors—households with more than $250,000 and less than $2 million in investable assets—were hybrid (Exhibit 4), a sharp increase of nine percentage points in just three years. The biggest beneficiaries of this trend have been incumbent and new direct brokerages, as well as some traditional wealth managers with sizable direct brokerage platforms.

The rapid growth of hybrid affluent investors is a result of two trends that are expected to persist: investors’ desire for human advice and the ease and affordability of direct investing. Therefore, to foster deep relationships with affluent clients and prevent them from investing with competitors, wealth managers of all types need to have both direct brokerage and advisor-led offerings with a seamlessly integrated experience across the two. Achieving this will not be easy; it will require careful management of channel conflicts and potential revenue cannibalization.

New customer needs provide an opening to differentiate

Investors are increasingly looking for institutions that can provide them with omnichannel access, integration of banking and wealth management services, and personalized offerings. As similar kinds of benefits become available from providers of other services, investors see them more as needs than as luxuries. In fact, fully 50 percent of high-net-worth (HNW) and affluent clients say their primary wealth manager should improve digital capabilities across the board.

Omnichannel access is no longer just ‘nice to have.’ One of the clearest disruptions triggered by the pandemic has been the sharp acceleration of digital adoption across consumer segments—including wealthier and older clients who were previously less digitally inclined with respect to financial advice. As a result, according to McKinsey’s latest Affluent and High-Net-Worth Consumer Insights Survey, digital is now the most preferred channel for clients, closely followed by remote (Exhibit 5).

This trend is even more pronounced for the HNW segment, which we define as households with more than $2 million in investable assets: roughly 40 percent of HNW clients say phone or video conferences are their preferred wealth management channels, and only 15 percent look forward to going back into branches or resuming in-person visits. Interestingly, the preference for digital and remote engagement among HNW clients is higher than for their affluent counterparts.

50% of clients think their primary wealth manager should improve their digital capabilities

Convergence of banking and investing has gone mainstream. Over the last three years, there has been a striking increase in clients’ preference to consolidate their banking and wealth relationships to achieve convenience and better relationship deals: the share with this preference has risen from 13 percent in 2018 to 22 percent in 2021. The trend applies to both wealthy and young households (Exhibit 6). In particular, 53 percent of those aged under 45 and about 30 percent of those with $5 million to $10 million in investable assets prefer to consolidate relationships.

Banks and wealth managers alike can benefit from this trend, but their starting position differs by client segment: HNW, ultra-HNW, 4 In this article we define HNW customers as those with between $2 million and $25 million in investable assets; ultra-HNW have more than $25 million in investablele assets. and older clients tend to consolidate banking with their primary wealth manager, whereas young investors are more likely to consolidate wealth management with their primary bank.

Clients’ reasons for consolidating with their primary bank or investment firm vary. High-yield deposits, lower management fees, and seamless transactions across accounts are the top three reasons for consolidation—and are basically table stakes. Beyond that, our research has found that banks generally win on convenience (for example, an existing relationship with the client, customer service tailored to younger clients), while investment firms win on products and reputation (for example, more expansive accounts or products such as securities-based lending, concierge-like customer service tailored to older clients, and recommendations).

The increased preference for consolidating banking and investing has been driven by a flurry of innovation. National banks are building wealth management capabilities and closely integrating experiences with traditional banking services, often in partnership with fintechs. Full-service wealth managers are upgrading their digital banking capabilities. And consumer-facing fintechs—with millions of users—are blurring the lines between investing and cash management.

Rise of personalized investing. Personalization matters. It is a key driver of client satisfaction and the number-three factor for clients selecting financial advisors. Wealth managers have responded to the demand to personalize investment management with customized, tax-efficient managed accounts. Because of their operational complexity, these products have typically been accessible only to the HNW and ultra-HNW segments. However, direct indexing, fractional share trading, and $0 online commissions are shifting the paradigm by enabling customized portfolios of securities at lower minimums.

Assets under management (AUM) in direct indexing tripled between 2018 to 2020, reaching $215 billion, or 17 percent of the retail separately managed account (SMA) market. We anticipate direct indexing volumes to triple through 2025, given how this new investing technology meets client needs, most notably the growing demand for tax-efficient investing and the desire of some retail investors, particularly younger clients, to ensure that their portfolio holdings reflect their personal values (Exhibit 7). The recent flurry of acquisitions of direct indexing providers by leading US wealth and asset managers will create further supply-side momentum in expanding the growth of the category.

Broader adoption among clients will require further innovation. For both self-directed and advisor-led models, offering direct indexing requires a careful consideration of the trade-offs associated with taxes and environmental, social, and governance (ESG) constraints. All this creates a need for intuitive interfaces and analytical tools, which need to be integrated into the advisor desktop and workflow.

New products expand ways to serve customers

Across industries, transformation arises from the introduction of new products. In wealth management, we see notable potential in two main categories of new products: investments in private markets and investments in digital assets.

Democratization of private markets. In the current lower-for-even-longer interest-rate environment, investors’ appetite for alternative investments is as high as ever, with the young leading the way: about 35 percent of 25-to-44-year-old investors indicate an increased demand for alternatives. Within alternatives, private markets (private equity, private debt, real estate, infrastructure, and natural resources), an asset class that was once the preserve of institutional investors, is making inroads to individual portfolios. Large private-markets firms are building out retail distribution capabilities and vehicles, and home offices make it easier for clients to access private-markets products, often with the help of fintech infrastructure providers. Increased client demand and innovations have potential to increase the share of assets allocated to private markets from about 2 percent in 2020 to 3 to 5 percent by 2025, representing asset growth of between $500 billion and $1.3 trillion. It is imperative for wealth managers to facilitate this growth by making it easier for their clients to access private markets.

Digital assets going mainstream. The arrival of an army of new retail investors has proven to be a boon to the growth of new asset classes that were incubated in the margins of the market. Nowhere is this phenomenon clearer than in the realm of digital assets, which have ballooned from a combined valuation of $100 billion in 2019 to a market capitalization of more than $2.5 trillion today. They span multiple digital asset classes, or “tokens,” beyond cryptocurrencies, including tokenized equities, bonds debt, stablecoins (typically pegged to conventional currencies), art, and collectibles. The motivations for investors in digital assets are diverse—experimentation, speculation, the search for inflation protection, or getting exposure to the building blocks of new technology that is increasingly cast as the next iteration of the internet (that is, Web3). Whatever the motivation, investors’ enthusiastic embrace of digital assets is very clear. For example, digital trading platform Coinbase has gathered a staggering 68 million verified users.

For wealth managers, digital assets present both an opportunity and a challenge. On the one hand, the cryptocurrency market has grown too large to ignore amid robust client demand; 11 percent of affluent clients and 8 percent of HNW clients invest in digital assets. On the other hand, three broad challenges are associated with offering cryptocurrencies. First, regulatory ambiguity—on asset classification and tax reporting, among other issues—has lingered, often creating uncomfortable levels of risk exposure for wealth managers. While it is still early days, the advent of crypto exchange-traded funds (ETFs) could help address some of these challenges. Second, the infrastructure required for offering digital assets, including custody services, differs from what is required for traditional investment products. Lastly, digital asset classes are not well understood by many advisors, so advising on the products is challenging for them.

Wealth managers face a choice: they can take a wait-and-see approach and accept the business risks associated with staying out of a rapidly growing market, or they can pursue the opportunity aggressively by leveraging partnerships with fintechs while addressing heightened regulatory risks. What remains for certain is that over the longer term, there is meaningful potential for a far broader class of digital assets to enter the investing mainstream and for the underlying technologies of blockchain-based decentralized finance (DeFi) to revolutionize the distribution of investment products, including the T+0 settlement cycle.

New business models position firms for growth

The last of our four contours of the new growth narrative is the introduction of new business models. Two such models are of importance: offering services to registered investment advisors (RIAs) and digitizing the delivery of advice.

Advisors’ desire for independence presents an opportunity to serve RIAs. The last decade has seen a migration of advisors to registered independent advisors, with 24 percent of all financial advisors being part of an RIA in 2020, compared with 16 percent in 2010. This shift is expected to continue apace, with the share of advisors affiliated with RIAs growing to 26 percent by 2025. Motivations for advisors’ migration to RIAs include the expectation of higher payouts plus two other factors: First, advisors are looking at the RIA channel as the best way to monetize their business, with RIA acquisition multiples for top advisors (those with books over $1 billion) two to three times higher than retire-in-place incentives at traditional wealth managers. Second, technology and services firms, working in conjunction with the major custodians, have lowered barriers for advisors to launch their own firms. Moreover, advisors believe they can procure technology and services that are similar to or better than what traditional wealth managers provide.

While this trend presents a challenge for wirehouses and broker–dealers, whose advisor force is expected to shrink by 3 percent over the next five years, there is a silver lining: RIAs’ reliance on third-party products and solutions creates an opportunity for participants in the wealth management ecosystem to seek a share of this fast-growing revenue and profit pool. Some ecosystem participants are viewing this segment in terms of a single product or service—lead generation, tech point solutions, custodial offerings, banking-as-a-service for advisors, asset management. Others, including turn key asset management providers (TAMPs), established custodians, and traditional wealth managers with attacker mindsets, are attempting to build a next-generation, wirehouse-quality platform for advisors.

Therefore, wealth managers, especially those who rely on advisor recruiting for growth, need to look beyond the competitive threat posed by the fast-growing RIA channel and explore new business models that would allow them to participate in this growing revenue and profit pool. Wealth managers seeking to serve the RIA segment will need to manage technology as a core competency, and those with large advisor forces will need to manage the advisor attrition risks associated with opening up the platform (even partially) to RIAs.

2X faster annual revenue growth projected over the next five years for RIA channel versus industry overall

The opportunity for digital advice models. Digital advice models, including robo-advisor and hybrid advisor models, have been around for more than a decade and have been the fastest-growing wealth management delivery model, with more than 20 percent annual revenue growth between 2015 and 2020. They still account for only about 1 percent of the market, but the growth prospects are high: the last three years—and last 18 months in particular—have marked a step increase in investor comfort levels with these offerings (Exhibit 8). In fact, the share of investors saying they are comfortable with remote advice grew from about 38 percent in 2018 to roughly 46 percent in 2021. Among clients younger than 45, the comfortable share grew from 43 percent to 59 percent. Similarly, while comfort with digital-only advice remains modest overall at about 15 percent, it has more than doubled since 2018 among investors under 45, to roughly half in 2021.

Unsurprisingly, the growing interest has motivated wealth managers to expand into and innovate in this channel. However, wealth managers should be aware that achieving a step change in adoption of digital advice offerings will require going beyond the lower-cost value proposition, privileged acquisition strategies, and brand equity. Among investors who do not express comfort with robo-advisor models, the main reasons they give are perceived lack of personalization, privacy concerns, and lack of motivation to explore the offering. Bringing more investors on board will require matching the advisor-like experience with personalized content and solutions.

60% increase in share of investors comfortable with digital-only models since 2018 and 21% increase in those comfortable with remote models

Embracing the new growth narrative: A four-part agenda

Clearly, wealth management remains an attractive industry with strong growth fundamentals and long-term margins. If anything, the disruptions we have discussed in this report expand the industry’s options and will shape the growth narrative for the next decade.

Given the pace of change, stasis is not a viable option. We recommend that wealth managers follow a four-part agenda for action: reposition, redesign, reimagine, and reallocate.

Reposition the firm for what’s next

Every wealth manager needs to take a hard look at the secular growth themes shaping the industry—fast-growth segments, banking, personalization, new product propositions, and new business models—and decide, based on the firm’s unique sources of competitive advantage, which of these updrafts it should ride. Where a firm lacks natural advantages in capitalizing on particular growth themes, M&A is a critical lever for accelerating the repositioning of individual wealth management franchises. The last 24 months have seen numerous high-profile transactions as firms seek scale and/or the acquisition of new capabilities to accelerate their strategy. We expect M&A to be a particularly important theme over the next 24 months as wealth managers reposition themselves for the postpandemic “next normal,” whenever it arrives.

Redesign offerings for new needs

Firms also should monitor and try to anticipate evolving client needs, using this information to redesign their offerings. Examples could include new value propositions (for instance, around tax efficiency, integration of wealth and banking, or specific high-growth segments), privileged access to new products (such as digital assets or private markets), or completely new business models (for example, light-guidance digital offerings).

Reimagine client engagement and experience

The third agenda item is to radically reimagine client engagement and experience. The pandemic has reset clients’ assumptions about how they want to be served, and the accelerated uptake of technology has created unprecedented degrees of freedom for wealth managers. Every wealth manager needs to ask, “What is the blueprint for a client experience model in a digital-first world?” and “How can such a model simultaneously deepen our relationships and broaden our reach?”

Reallocate resources to support the strategy

Finally, successful wealth management firms make a bold commitment to putting the money where the strategy is, and they make multiyear resource-reallocation decisions, including where firm’s top talent spends time, in favor of growth. Regular reallocation of resources is a critical but often neglected step that can close the loop between visionary strategic intent and successful implementation.

Our research across industries suggests that fortune favors the bold: the top third of companies, which have been the most dynamic resource reallocators, achieved 1.6 times higher total returns to shareholders than the bottom third (about 10 percent versus 6 percent annualized over 20 years). In the wealth management context, we estimate that top performers are making strategic resource reallocation decisions to the tune of 15 percent or more of operating expenses over five years, whereas those simply dabbling with subscale experiments in strategic growth areas will not see results. Simply put, firms should not aim to be all things to all clients.

Five questions for wealth management executives

Given the significance of the opportunity at hand, wealth management executives must consider their firm’s readiness to capitalize on it. To provoke a self-assessment, we offer five questions for executives to ponder and discuss with their teams:

• What are the three or four priority growth themes you are betting on for the next five years? While several growth avenues and disruptions are reshaping the wealth management landscape, the optimal recipe will differ depending on an individual firm’s starting position and its sources of competitive advantage. Clarifying priority growth themes and aligning with your executive team help lay a foundation for developing a winning growth strategy.
• Do you have the right team and operating model? To paraphrase Peter Drucker’s famous phrase, “Execution eats strategy for breakfast.” A prerequisite for successful execution is an effective leadership team that is brought together around critical behaviors. In the context of wealth management and the shifts the industry is going through, these behaviors for executive teams must include operating in an agile manner and developing connections across business units and functions. In addition, the team needs leaders who are not afraid to experiment and innovate and whose mandates are aligned with major growth themes that typically cut across business unit lines (for example, banking and wealth, segments, sustainability). 5 For more, see Natasha Bergeron, Aaron De Smet, and Liesje Meijknecht, “ Improve your leadership team’s effectiveness through key behaviors ,” January 2020, McKinsey.com.
• Does your ability to attract sought-after client-facing and technology talent match your ambition? Over the last 12 to 18 months, wealth managers of different sizes and business models have publicly announced ambitious hiring targets with an emphasis on client-facing and technology talent. However, these plans have been challenged by severe labor shortages across industries, as a result of what has been dubbed the Great Attrition: 40 percent of employees say they are at least somewhat likely to leave their current job in the next three to six months, and 54 percent of employees say they leave because they do not feel valued by their organizations. 6 Aaron De Smet, Bonnie Dowling, Marino Mugayar-Baldocchi, and Bill Schaninger, “ ‘Great Attrition’ or ‘Great Attraction’? The choice is yours ,” McKinsey Quarterly , September 8, 2021, McKinsey.com. Wealth management is no exception to this trend. While many of the levers for attracting and retaining talent remain effective, other factors have gained importance during COVID-19, with more than 80 percent of workers saying that a hybrid-office working model is the optimal route forward. In addition to rethinking their operating models to attract and retain talent, wealth managers need to take bolder and more creative approaches to attracting new-to-industry talent. These may include flexible working arrangements, alternative career paths (including new payout structures for client-facing roles and programs aimed at creating the next generation of advisor talent), and partnerships with various types of educational institutions.
• Are you reallocating a significant portion of your resources—spending and capital—toward priority growth areas, including M&A? Systematic and dynamic resource allocation is an essential part of a winning business strategy. Achieving industry-leading levels in this area involves several steps: conducting a critical review of the firm’s existing cost structure, introducing a culture that continuously reallocates resources from low- to high-value tasks, increasing transparency around returns of individual projects, and implementing governance processes to enable more dynamic resource allocation. Capital reallocation can be a powerful tool for acceleration of growth in high-priority areas, which requires a clear M&A blueprint consistent with the broader enterprise strategy. We expect three major M&A themes to shape wealth management deal making in the next 18 to 24 months: (a) transactions focused on platform synergies, mostly in the vibrant RIA market but also among the largest wealth managers; (b) transactions focused on entering adjacent revenue pools, such as asset management, banking, retirement, or payments; and (c) transactions to acquire capabilities that will be key for growth—for example, direct indexing, tax solutions, or wealth tech. While not all deals are accretive in value, the top 25 percent of deals achieve 8.5 percent excess TRS. Top acquirers are distinguished from the rest by two characteristics: the ability to embed M&A in their strategic planning process and a clear post-acquisition playbook, inclusive of an integration capability. Thinking through programmatic M&A in the context of business strategy is essential for making accretive deals that contribute to both top-line growth and business value.
• Do you have a partnership strategy rooted in your business strategy? When it comes to digital, data, and technology, it is impossible for any organization to stay ahead of the pack on every dimension, so a clear partnership strategy is crucial. In fact, many wealth management incumbents already rely on fintechs to gain access to better technology across the value chain—client acquisition, client front-end, portfolio management, point solutions on advisor desktops, cybersecurity, and cloud infrastructure, among others. Looking ahead, it is important for executives and their teams to be clear-eyed about which capabilities will be a source of sustainable competitive advantage and then to decide how to acquire those capabilities: build in-house, build in-house in partnerships with fintechs, or outsource.

Despite a modest dip in profits, the US wealth management industry has thus far come through the pandemic not only unscathed but with tailwinds from sustained demand for advice, potential upside of higher interest rates, the rise of new client segments, and the embrace of unprecedented levels and speed of innovation. As the industry moves toward the hoped-for postpandemic new normal, it faces near-term macroeconomic uncertainty but also meaningful opportunity.

Tomorrow’s successful managers will need to adapt their models to preempt the disruptions that lie ahead and adopt a new sense of purpose and innovation as they head into a period of growth.

Pooneh Baghai is a senior partner in McKinsey’s Toronto office; Alex D’Amico and Jill Zucker are senior partners in the New York office, where Agostina Salvo is an associate partner; and Vlad Golyk is a partner in the Southern California office.

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What is wealth management?

Wealth management is the most advanced form of financial advisory services. A wealth advisor typically works with high-net-worth individuals to create a tailored investment strategy to help them manage their assets. Wealth management also generally includes comprehensive financial advice, tax guidance, estate planning and even legal assistance.

What does a wealth manager do?

Wealth managers generally provide financial services to the highly affluent and may have expertise in the types of financial questions that affect the ultrawealthy, such as how to reduce the estate tax . Many private wealth managers will coordinate with other financial experts — such as accountants or estate planning specialists — on behalf of clients to offer holistic financial advice.

For instance, a wealthy individual who has been married and divorced, owns multiple properties and has numerous investments and accounts may need expertise in legal matters, property taxes and investments. A wealth manager could create a complex financial plan that takes each of those needs into consideration, either on their own or with outside counsel.

How do wealth managers get paid?

This may depend on where the wealth manager works. At a large firm, wealth managers may receive a salary and bonuses. If you are working with a private firm owned by an advisor, any advisory fees (generally 0.25% to 1% of assets under management) would go to the advisor. You should always ask a potential advisor what their fee structure is. Learn more about the different kinds of financial advisor fees .

How much money do you need for wealth management?

Wealth management services often require steep account minimums. For example, Fidelity’s “private wealth management service,” where you have an entire team of financial professionals working on your behalf, requires at least $2 million invested through Fidelity Wealth Services and $10 million or more in total investable assets. [0] Fidelity . Fidelity Private Wealth Management . Accessed May 8, 2023. View all sources Fidelity also offers a simpler “wealth management” service, where you work with an individual advisor, which requires a $250,000 account minimum.

Vanguard, another online brokerage, offers a "personal advisor wealth management service," that gives clients access to a group of financial specialists as well as a dedicated CFP. The minimum to qualify for the service is $5 million. Vanguard also provides lower-tiered wealth management services for a minimum of $500,000. [0] Vanguard . Compare Investment Advice . Accessed May 8, 2023. View all sources

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Wealth management strategies

There are many different investment strategies financial advisors use to help increase their clients’ wealth, from value investing (Warren Buffett’s favorite) to growth investing. Wealth managers tend to have slightly different approaches since they are working with such large accounts. They may give their clients access to a wider range of investments than regular financial advisors, like hedge funds and private equity offerings. Wealth managers also tend to use strategies that are more holistic, meaning that any financial plan a wealth manager puts together should incorporate all aspects of a wealthy individual’s life, including things like estate and tax planning, not just their investments.

The strategy a wealth manager employs should also match the individual investor’s risk tolerance and financial goals. For example, if a client is nearing retirement, a wealth manager might start shifting the focus from risky growth investments to safer investments that can help a retiree maintain their wealth.

Wealth manager credentials

When looking for a wealth manager, it’s important to figure out how they are paid and what credentials or designations they have. It’s a good rule of thumb to work with a fee-only fiduciary , which means that they are paid directly by you for their services and they can’t receive compensation for recommending certain products. Having a fiduciary duty means that they are legally obligated to put your needs first.

While many wealth managers will be registered investment advisors , consider working with a certified financial planner . CFPs possess the most rigorous certification for financial planning and are held to a fiduciary standard. In addition to a CFP, you may want to work with a certified public accountant. A CPA will be able to help you with your tax needs. Some wealth advisory firms have both CFPs and CPAs on staff who can work together to help you manage your full financial picture.

What is the difference between a wealth manager and a financial advisor?

“Financial advisor” is a general term for various financial professionals and has no regulation or certification requirement. A wealth manager typically refers to a specific kind of financial advisor whose work focuses on topics that concern very wealthy individuals. A wealth manager usually has a significantly higher investment minimum than a regular financial advisor.

Wealth managers also tend to offer more services than financial advisors. These services can include estate planning, trust services, family legacy planning, charitable giving planning and legal planning. Some wealth managers have even incorporated concierge health care into their services.

Keep in mind that the job title “wealth manager” is also a generic term that can be used by anyone and does not indicate any specific credential. Always be sure to vet whatever types of financial advisors you use. You can look up an advisor on the Financial Industry Regulatory Authority’s BrokerCheck tool .

Is a wealth manager worth it?

A wealth manager should be able to assist with all of your financial planning needs, up to and including, for example, managing the tax ramifications of business income and setting up a donor-advised fund for your charitable contributions.

Financial planners may offer similar services to wealth managers, but often they'll let you purchase services on an "a la carte" basis. For example, if all you want is help figuring out how you'll meet your retirement income needs, some financial planners will work with you to create a retirement income plan, and you pay solely for that service.

If you need assistance with estate planning , specialized tax help or investing advice, it may be worth getting professional help now to protect and preserve your assets later.

Alternative wealth management services

If those wealth-management minimums are more than you bargained for, then you probably don’t need wealth management. While some financial planners also focus on ultra-wealthy clients, there’s a growing cadre of financial advisors who work with both affluent and middle-income folks. Some of these advisors operate online.

Online financial advisors offer portfolio management (also called investment management ) and in-depth financial planning, including access to a human financial planner. Often, these services are delivered entirely over the phone or by video conference. While you may not meet in person, you’ll work directly with a financial advisor who can help you build a holistic financial plan or reach a specific goal.

The services offered vary by provider. You might get access to a dedicated CFP, or not. Some providers will help you with specific financial questions but not others — for example, complex questions around the taxation of self-employment income might be beyond the scope of some companies.

Given all the variety, it’s important to shop around to find the service that best meets your needs.

» View our list of the best financial advisors

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Essential requirements in crafting a one-page financial advisor business plan.

August 17, 2015 07:01 am 21 Comments CATEGORY: Practice Management

Executive Summary

In a world where most advisory firms are relatively small businesses, having a formal business plan is a remarkably rare occurrence. For most advisors, they can “keep track” of the business in their head, making the process of creating a formal business plan on paper to seem unnecessary.

Yet the reality is that crafting a business plan is about more than just setting some business goals to pursue. Like financial planning, the process of thinking through the plan is still valuable, regardless of whether the final document at the end gets put to use. In fact, for many advisory firms, a simple “one-page” financial advisor business plan may be the best output of the business planning process – a single-page document with concrete goals to which the advisor can hold himself/herself accountable.

So what should the (one-page) financial advisor business plan actually cover? As the included sample template shows, there are six key areas to define for the business: who will it serve, what will you do for them, how will you reach them, how will you know if it’s working, where will you focus your time, and what must you do to strengthen (or build) the foundation to make it possible? Ideally, this should be accompanied by a second page to the business plan, which includes a budget or financial projection of the key revenue and expense areas of the business, to affirm that it is a financially viable plan (and what the financial goals really are!).

And in fact, because one of the virtues of a financial advisor business plan is the accountability it can create, advisors should not only craft the plan, but share it – with coaches and colleagues, and even with prospective or current clients. Doing so becomes an opportunity to not only to get feedback and constructive criticism about the goals, but in the process of articulating a clear plan for the business, the vetting process can also be a means to talk about the business and who it will serve, creating referral opportunities in the process!

Author: Michael Kitces

Michael Kitces is Head of Planning Strategy at Buckingham Strategic Wealth , which provides an evidence-based approach to private wealth management for near- and current retirees, and Buckingham Strategic Partners , a turnkey wealth management services provider supporting thousands of independent financial advisors through the scaling phase of growth.

In addition, he is a co-founder of the XY Planning Network , AdvicePay , fpPathfinder , and New Planner Recruiting , the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com , dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

Why A Business Plan Matters For Financial Advisors

There’s no end to the number of articles and even entire books that have been written about how to craft a business plan , yet in practice I find that remarkably few financial advisors have ever created any kind of formal (written or unwritten) business plan. Given that the overwhelming majority of financial advisors essentially operate as solo practitioners or small partnerships, this perhaps isn’t entirely surprising – when you can keep track of the entire business in your head in the first place, is there really much value to going through a formal process of crafting a financial advisor business plan?

Having been a part of the creation and growth of numerous businesses , I have to admit that my answer to “does a[n individual] financial advisor really need a business plan?” is a resounding yes . But not because you’re just trying to figure out what the basics of your business will be, which you may well have “figured out” in your head (or as the business grows, perhaps figured out in conversations with your partner). The reason a business plan matters is all about focus , and the ability to keep focus in proceeding towards your core objectives, and accountable to achieving them, even in a dynamic real-world environment full of distractions.

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As the famous military saying goes, “ no battle plan ever survives contact with the enemy ”, because the outcomes of battle contact itself change the context, and it’s almost impossible to predict what exactly will come next. Nonetheless, crafting a battle plan in advance is a standard for military leadership. Because even if the plan will change as it’s being executed, having a clearly articulated objective allows everyone, even (and especially) in the heat of battle, to keep progressing towards a common agreed-upon goal. In other words, the objective stated in the battle plan provides a common point of focus for everyone to move towards, even as the (battle) landscape shifts around them. And the business plan serves the exact same role within a business.

Essential Elements Required In A Financial Advisor Business Plan

Because the reality is that in business – as in battle? – the real world will not likely conform perfectly to an extensively crafted business (or battle) plan written in advance, I am not a fan of crafting an extensively detailed business plan, especially for new advisors just getting started, or even a ‘typical’ solo advisory firm. While it’s valuable to think through all the elements in depth – the process of thinking through a business plan is part of what helps to crystallize the key goals to work towards – as with financial planning itself, the process of planning can actually be more valuable than “the plan” that is written out at the end .

Accordingly, for most financial advisors trying to figure out how to write a business plan, I’m an advocate of crafting a form of “one-page business plan” that captures the essential elements of the business, and provides direction about where to focus, especially focus the time of the advisor-owner in particular. In other words, the purpose for a financial advisor business plan is simply to give clear marching orders towards a clear objective, with clear metrics about what is trying to be achieved along the way, so you know where to focus your own time and energy!

Of course, the reality is that what constitutes the most important goals for an advisory firm – as well as the challenges it must surmount – will vary a lot, depending not just on the nature of the firm, but simply on its size, scope, and business stage. Financial advisors just getting started launching a new RIA face very different business and growth issues than a solo advisor who has been operating for several years but now hit a “wall” in the business , and the challenges of a solo advisor are different than those of a larger firm with multiple partners who need to find alignment in their common business goals. Nonetheless, the core essential elements that any business plan is required to cover are remarkably similar.

Requirements For An Effective Financial Advisor Business Plan

While there are many areas that can potentially be covered, the six core elements that must be considered as the template for a financial advisor business plan are:

6 Required Elements Of A (One Page) Business Plan For Financial Advisors 1) Who will you serve? This is the most basic question of all, but more complex than it may seem at first. The easy answer is “anyone who will pay me”, but in practice I find that one of the most common reasons a new advisor fails is that their initial outreach is so unfocused, there’s absolutely no possibility to gain any momentum over time. In the past, when you could cold-call your way to success by just trying to pump your products on every person who answered the phone until you found a buyer, this might have been feasible. But if you want to get paid for your advice itself, you need to be able to demonstrate your expertise. And since you can’t possibly be an expert at everything for everyone, you have to pick someone for whom you will become a bona fide specialist (which also provides crucial differentiation from other advisors the potential client might choose to work with instead ). In other words, you need to choose what type of niche clientele you’re going to target to differentiate yourself. And notably, this problem isn’t unique to new advisors; many established advisors ultimately hit a wall in their business, in part because it’s so time-consuming trying to be everything to everyone, that they reach their personal capacity in serving clients earlier than they ‘should’. Focusing on a particular clientele – to the point that you can anticipate all of their problems and issues in advance – allows the business to be radically more efficient. So who, really , do you want to serve? 2) What will you do for them? Once you’ve chosen who you will serve, the next task is to figure out what you will actually do for them – in other words, what services will you deliver. The reason it’s necessary to first figure out who you will serve, is that the nature of your target niche clientele may well dictate what kind of services you’re going to provide them; in fact, part of the process of identifying and refining your niche in the first place should be to interview a number of people in your niche , and really find out what they want and need that’s important to them (not just the standard ‘comprehensive financial plan’ that too many advisors deliver in the same undifferentiated manner ). For instance, if you’re really serious about targeting retirees, you might not only provide comprehensive financial planning, but investment management services (for their retirement portfolios), a specific retirement income distribution strategy, assistance with long-term care insurance, and guidance on enrolling in Medicare and making decisions about the timing of when to start Social Security benefits . On the other hand, if you hope to work with entrepreneurs, you might need to form relationships with attorneys and accountants who can help facilitate creating new business entities, and your business model should probably be on a retainer basis, as charging for assets under management may be difficult (as entrepreneurs tend to plow their dollars back into their businesses!). If your goal is to work with new doctors, on the other hand, your advice will probably focus more on career guidance, working down a potential mountain of student debt, and cash flow/budgeting strategies. Ultimately, these adjustments will help to formulate the ongoing client service calendar you might craft to articulate what you’ll do with clients (especially if you plan to work with them on an ongoing basis), and the exact business model of how you’ll get paid (Insurance commissions? Investment commissions? AUM fees? Annual retainers? Monthly retainers ? Hourly fees?). 3) How will you reach them? Once you’ve decided who you want to reach, and what you will do for them, it’s time to figure out how you will reach them – in other words, what will be your process for finding prospective clients you might be able to work with? If you’re targeting a particular niche, who are the centers of influence you want to build relationships with? What publications do they read, where you could write? What conferences do they attend, where you might speak? What organizations are they involved with, where you might also volunteer and get involved? If you’re going to utilize an inbound marketing digital strategy as an advisor , what are the topics you can write about that would draw interest and organic search traffic, and what giveaway will you provide in order to get them to sign up for your mailing list so you can continue to drip market to them? In today’s competitive world, it’s not enough to just launch a firm, hang your (virtual) shingle, and wait for people to walk in off the street or call your office. You need to have a plan about how you will get out there to get started! 4) How will you know if it’s working? Once you’ve set a goal for who you want to serve, what you want to do for them, and how you will reach them, it’s time to figure out how to measure whether it’s working. The caveat for most financial advisory businesses, though, is that measuring outcomes is tough because of the small sample size – in a world where you might have to reach out to dozens of strangers just to find a dozen prospects, and then meet with all those prospects just to get a client or two, it’s hard to tell whether a strategy that nets one extra client in a quarter was really a “better strategy” or just random good luck that won’t repeat. As a result, in practice it’s often better to measure activity than results , especially as a newer advisory firm. In other words, if you think you’ll have to meet 10 Centers Of Influence (COIs) to get introductions to 30 prospects to get 3 clients, then measure whether you’re meeting your activity goals of 10 COIs and 30 prospect meetings, and not necessarily whether you got 2, 3, or 4 clients out of the last stint of efforts. Not that you shouldn’t ultimately have results-oriented goals of clients and revenue as well, but activity is often the easier and more salient item to measure, whether it’s phone calls made, articles written, subscribers added to your drip marketing list, prospect meetings, COI introductions, or something else. So when you’re defining the goals of your business plan, be certain you’re setting both goals for the results you want to achieve, and the key performance indicator (KPI) measures you want to evaluate to regarding your activities along the way? 5) Where will you focus your time in the business? When an advisory firm is getting started, the role of the advisor-as-business-owner is to do “everything” – as the saying goes, you’re both the chief cook and the bottle washer . However, the reality is that the quickest way to failure in an advisory firm is to get so caught up on doing “everything” that you fail to focus on the essential activities necessary to really move the business forward (that’s the whole reason for having a plan to define what those activities are, and a measure to determine whether you’re succeeding at them!). Though in truth, the challenge of needing to focus where you spend your time in the business never ends – as a business grows and evolves, so too does the role of the advisor-owner as the leader, which often means that wherever you spent your time and effort to get your business to this point is not where you need to focus it to keep moving forward from here. From gathering clients as an advisor to learning to transition clients to another advisor, from being responsible for the firm’s business development to hiring a marketing manager, from making investment decisions and executing trades to hiring an investment analyst and trader. By making a proactive decision about where you will spend your time, and also deliberately deciding what you will stop doing, it also becomes feasible to determine what other resources you may need to support you, in order to ensure you’re always spending your time focused on whatever is your highest and best use. In addition, the process can also reveal gaps where you may need to invest into and improve yourself, to take on the responsibilities you haven’t in the past but need to excel at to move forward from here. 6) How must you strengthen the foundation? The point of this section is not about what you must do to achieve the goals you’ve set, but what else needs to be done in the business in order to maximize your ability to make those business goals a reality. In other words, if you’re going to focus your time on its highest and best use in the business, what foundation to you need to support you to make that happen? If you’re a startup advisory firm, what business entity do you need to create, what are the tools/technology you’ll need to launch your firm , and what licensing/registrations must you complete? Will you operate with a ‘traditional’ office or from a home office , or run an entirely virtual “location-independent” advisory firm ? What are the expenses you’re budgeting to operate the business? If you’re an advisor who’s hit a growth wall , what are the essential hire(s) you’ll make in the near future where/how else will you reinvest to get over the wall and keep moving forward? At the most basic level, the key point here is that if you’re going to execute on this business plan to move the business forward from here, you need a sound foundation to build upon – so what do you need to do to shore up your foundation, so you can keep building? But remember, the goal here is to do what is necessary to move forward, not everything ; as with so much in the business, waiting until perfection may mean nothing gets done at all.

Creating A Budget And Financial Projections For Your Advisory Business

In addition to crafting a (one-page) financial planner business plan, the second step to your business planning process should be crafting a budget or financial projection for your business for the upcoming year (or possibly out 2-3 years).

Key areas to cover in budget projections for a financial advisory firm are:

Revenue - What are the revenue source(s) of your business, and realistically what revenue can you grow in the coming year(s)? - If you have several types of revenue, what are you goals and targets for each? How many hourly clients? How much in retainers? How much in AUM fees? What commission-based products do you plan to sell, and in what amounts? Expenses - What are the core expenses to operate the business on an ongoing basis? (E.g., ongoing salary or office space overhead, core technology you need to operate the business, etc.) - What are the one-time expenses you may need to contend with this year? (Whether start-up expenses to launch your advisory firm , new hires to add, significant one-time projects to complete, etc.)

An ongoing advisory firm may project out for the next 1-3 years, while a newer advisors firm may even prefer a more granular month-by-month budget projection to have regular targets to assess.

Ultimately, the purpose of the budgeting process here is two-fold. The first reason for doing so is simply to have an understanding of the prospective expenses to operate the business, so you can understand if you do hit your goals, what the potential income and profits of the business will be (and/or whether you need to make any changes, if the business projections aren’t viable!). The second reason is that by setting a budget, for both expenses and revenue, you not only set targets for what you will spend in the business to track on track, but you have revenue goals to be held accountable to in trying to assess whether the business is succeeding as planned.

Vetting Your Business Plan By Soliciting Constructive Criticism And Feedback

The last essential step of crafting an effective financial planner business plan is to vet it – by soliciting feedback and constructive criticism about the gaps and holes. Are there aspects of the financial projections that seem unrealistic? Is the target of who the business will serve narrow and specific enough to be differentiated, such that the person you’re talking to would clearly know who is appropriate to refer to you? Are the services that will be offered truly unique and relevant to that target clientele, and priced in a manner that’s realistically affordable and valuable to them?

In terms of who should help to vet your financial advisor business plan, most seem to get their plan vetted by talking to a business coach or consultant to assess the plan. While that’s certainly a reasonable path, another option is actually to take the business plan to fellow advisors to vet, particularly if you’re part of an advisor study (or “mastermind”) group ; the reason is that not only do fellow advisors have an intimate understanding of the business and potential challenges, but if their target clientele is different than yours, it becomes an opportunity to explain what you do and create the potential for future referrals! In other words, “asking for advice on your business plan” also becomes a great opportunity to “tell you about who I work with in my business that you could refer to me” as well! (In fact, one of the great virtues of a clearly defined niche practice as an advisor is that you can generate referrals from other advisors who have a different niche than yours !)

Similarly, the reality is that another great potential source for feedback about your business plan are Centers of Influence already in your niche in the first place. While you might not share with your potential clients the details of your business financial projections (which is why I advocate that those be separate from the one-page business plan), the essential aspects of the business plan – who you will serve, what you will provide them, how you will charge, and how you will try to reach them – is an area that the target clientele themselves may be best positioned to provide constructive feedback. And in the process, once again you’ll effectively be explaining exactly what your niche business does to target clientele who could either do business with you directly, or refer business to you , even as you’re asking for their advice about how to make the business better (to serve people just like them!). So whether it’s people you’re not yet doing business with but want to, or an existing client advisory board with whom you want to go deeper, vetting your plan with prospective and current clients is an excellent opportunity to talk about and promote your business, even as you’re going through the process of refining it and making it better!

And notably, the other benefit of vetting your business plan with others – whether it’s a coach, colleague, prospects, or clients – is that the process of talking through the business plan and goals with them also implicitly commits to them that you plan to act on the plan and really do what’s there. In turn, what this means is that once you’ve publicly and openly committed to the business plan with them, it’s now fair game for them to ask you how it’s going, and whether you’re achieving the goals you set forth for yourself in the plan – an essential point of accountability to help you ensure that you’re following through on and executing the business plan you’ve created!

So what do you think? Have you ever created a formal business plan for yourself? If you have, what worked for you – a longer plan, or a shorter one? If you haven’t created a business plan for yourself, why not? Do you think the kind of one-page financial advisor business plan template articulated here would help? Have you checked out our financial advisor business plan sample template  for yourself? Do you have a financial advisor business plan example you're willing to share in the comments below?

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Financial Advisor Business Plan Template [Updated 2023]

VIII. Management Team

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

[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.

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Financial Advisor Business Plan Outline

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What Is Wealth Management?

Understanding wealth management.

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Wealth Management: What It Is and What Wealth Managers Charge

Investopedia / Theresa Chiechi

Wealth management is an investment advisory service that combines other financial services to address the needs of affluent clients. Using a consultative process, the advisor gleans information about the client’s wants and specific situation, then tailors a personalized strategy that uses a range of financial products and services.

Often, a holistic approach is taken within wealth management. To meet the complex needs of a client, a broad range of services—such as investment advice, estate planning , accounting, retirement, and tax services—may be provided. While fee structures vary across comprehensive wealth management services , typically, fees are based on a client’s assets under management (AUM).

Key Takeaways

• Wealth management is an investment advisory service that combines other financial services to address the needs of affluent clients.
• A wealth management advisor is a high-level professional who manages an affluent client’s wealth holistically, typically for one set fee.
• This service is usually appropriate for wealthy individuals with a broad array of diverse needs.

Wealth Management

Wealth management is more than just investment advice. It can encompass all parts of a person’s financial life. Instead of attempting to integrate pieces of advice and various products from multiple professionals, high net worth individuals may be more likely to benefit from an integrated approach. In this method, a wealth manager coordinates the services needed to manage their clients’ assets, along with creating a strategic plan for their current and future needs—whether it is will and trust services or business succession plans.

Many wealth managers can provide services in any aspect of the financial field, but some choose to specialize in particular areas, such as cross-border wealth management. This may be based on the expertise of a specific wealth manager, or the primary focus of the business within which the wealth manager operates.

In certain instances, a wealth management advisor may have to coordinate input from outside financial experts, as well as the client’s own service professionals (for example, an attorney or accountant) to craft the optimal strategy to benefit the client. Some wealth managers also provide banking services or advice on philanthropic activities.

Wealth Management Example

Generally speaking, wealth management offices have a team of experts and professionals available to provide advice across different fields. For instance, consider a client who has $2 million in investable assets—in addition to a trust for their grandchildren—and a partner who has recently passed away. A wealth management office would not only invest these funds in a discretionary account but also provide will and trust services required for tax minimization and estate planning. 

Wealth management advisors in the direct employ of an investment firm may have more knowledge in the area of investment strategy, while those who work for a large bank may focus on the management of trusts and available credit options, overall estate planning, or insurance options. In short, expertise may vary across different firms.

Wealth Management Business Structures

Wealth managers may work as part of either a small-scale business or a larger firm, one generally associated with the finance industry. Depending on the business, wealth managers may function under different titles, including financial consultant or financial advisor. A client may receive services from a single designated wealth manager or may have access to members of a specified wealth management team.

Advisors can charge for their services in several ways. Some work as fee-only advisors and charge an annual, hourly, or flat fee. Some work on commission and are paid through the investments that they sell. Fee-based advisors earn a combination of a fee plus commissions on the investment products that they sell.

A recent survey of financial advisors finds the median advisory fee (up to $1 million AUM) is just around 1%. However, some advisors charge more, especially on smaller account balances. Individuals with larger balances can often pay substantially less, with the median AUM fee declining as assets increase.

Newer, fully-automated roboadvisor platforms intended as wealth management tools for ordinary individuals often charge far less than 1% per year of AUM and come with low minimum account balances to get started.

Credentials for Wealth Managers

You should check the credentials of a professional to see which designation and training might best suit your needs and situation. The top three professional advisor credentials are Certified Financial Planner, Chartered Financial Analyst, and Personal Financial Specialist. Many websites for professional certifying organizations allow you to vet if a member is in good standing or has had disciplinary actions or complaints.

The Financial Industry Regulatory Authority (FINRA) has a tool that explains professional designations. You can also see whether the issuing organization requires continuing education, takes complaints, or has a way for you to confirm who holds the credentials.

Strategies of a Wealth Manager

The wealth manager starts by developing a plan that will maintain and increase a client’s wealth based on their financial situation, goals, and risk tolerance.

Importantly, each part of a client’s financial picture, whether it is tax planning or wills and estates, are coordinated together to protect the wealth of the client. This may coincide with financial projections and retirement planning.

After the original plan is developed, the manager meets regularly with clients to update goals, review, and rebalance the financial portfolio. At the same time, they may investigate whether additional services are needed, with the ultimate goal being to remain in the client’s service throughout their lifetime.

What Do Wealth Managers Earn?

According to Indeed, the average salary for a wealth manager in the United States in 2022 was $79,395.

Is a Wealth Manager the Same as a Financial Planner?

While some financial professionals are both wealth managers and planners, a key difference between financial planners and wealth managers is that the letter are focused on assets and investments, while planners also consider everyday household finances, insurance needs, and so on.

How Much Money Does the Wealth Management Industry Manage?

As of 2020, it is estimated that the wealth management industry had AUM of upwards of $112 trillion globally. This figure is expected to grow to $145.4 trillion by the year 2025.

Advisory HQ News Corp. " What Are the Average Financial Advisor Fees & Investment Fees Being Charged in 2021? "

Michael Kitces’ Nerd’s Eye View. " Financial Advisor Fees Comparison — All-In Fees for the Typical Financial Advisor? "

American Institute of CPAs. " Disciplinary Actions ."

Certified Financial Planner Board of Standards. " Verify an Individual’s CFP Certification and Background ."

Financial Industry Regulatory Authority. " Professional Designations ."

Indeed. " Wealth Managers ."

Price Waterhouse Cooper. " Global Assets under Management set to rise to $145.4 trillion by 2025 ."

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Private Wealth Management Business Plan [Sample Template for 2024]

Home » Business Plans » Financial Services

Are you about starting a wealth management company? If YES, here is a complete sample wealth management firm business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a wealth management firm. We also took it further by analyzing and drafting a sample wealth management firm marketing plan template backed up by actionable guerrilla marketing ideas for wealth management companies. So let’s proceed to the business planning section .

If you are interested in managing wealth for clients and you have some form of financial expertise and certifications, one of the businesses that you can conveniently start is a wealth management firm. No doubt starting a wealth management firm might not be as easy as it sounds, but if you are determined and hardworking, you will sure achieve your aim of owning a wealth management firm.

Starting a wealth management firm requires moderate startup capital and it can be considered to be a very profitable venture especially if you are good at discovering investment opportunities with good returns on investments. As a wealth management firm, your responsibility is to manage wealth and portfolios for your clients; you are to manage assets for investment vehicles such as mutual funds, hedge funds and insurance products et al.

Now that you have decided to start your own wealth management firm, it is important that you sit back to create plans on how to raise start – up capital, how to attract clients, how to generate profits and how to run the business. These are the questions your business plan will help you answer.

Below is a sample wealth management firm business plan template that will help you successfully write yours with little or no stress;

A Sample Private Wealth Management Firm Business Plan Template

Table of Content

1. Industry Overview

3. our products and services, 4. our mission and vision statement, 5. job roles and responsibilities, 6. swot analysis, 8. our target market, 9. sales and marketing strategy, 10. sales forecast, 11. publicity and advertising strategy, 12. our pricing strategy, 14. sustainability and expansion strategy.

Establishments in the Portfolio cum Wealth Management industry are known to primarily manage assets for her clients; they are known to manage assets for investment vehicles such as mutual funds, hedge funds and insurance products et al.

Wealth managers have the authority to make investment decisions and generate revenue through fees that are based on service and portfolio performance.

If you are a close observer of happenings in the Portfolio Management industry, you will agree that the unprecedented severity of the financial crisis and subsequent recession has contrasted the Portfolio Management industry’s recovery since, particularly in 2013, resulting into fluctuation in the revenue generated in the industry.

In the meantime, the profit in the industry has declined and this can be attributed to increased competition and shifting preferences, placing downward pressure on fees. Going forward, the revenue generated in the industry is projected to increase, largely due to the historic highs in equity markets.

So also, improved market conditions are expected to push up stock returns and bond yields, resulting to remarkable growth for the Portfolio Management industry.

The Portfolio Management / Wealth Management Industry are a very large and thriving industry not only in the developed nations, but also in developing and under developing countries of the world. Statistics has it that the Portfolio Management Industry in the united states of America, is worth $249 billion, with an estimated growth rate of 4.8 percent within 201 and 2016.

There are about 17,743 registered and licensed portfolio management / wealth management firms scattered all across the United States and they are responsible for employing about 188,830people. It is important to state that there is no company with a dominant market share in this industry; the industry is open for fair competitions for the available market.

A recent report published by IBISWORLD shows that the Mid-Atlantic region is estimated to account for 20.8 percent of total industry establishments. They stated that the region is the most important geographic segment for investment bankers and securities dealers, whom industry operators attract assets from.

The report further stated that some of the industry’s largest players, including Blackrock, are headquartered in the region due to its geographic proximity to an array of downstream corporate headquarters, financial intermediaries and exchanges. Prestige and branding also play an important role in this industry, with New York City housing many of the industry’s prominent players.

Lastly, even though the Portfolio Management industry is open for aspiring entrepreneurs to launch their business, it is important to state that experience and qualifications is key to the success of new players in the industry; you would need a good track records coupled with trust to attract people and businesses to commit their wealth into your care to manage on their behalf.

2. Executive Summary

Jonah Kent & Co® Wealth Management, LLP is a registered, licensed and accredited wealth management firm that will be based in New York City – New York. We have been able to secure a well – furnished office facility in a busy business district in New York City – New York.

The company will handle all aspect of portfolio management services such as large cap equity asset management, fixed-income asset management, equity specialties asset management, alternatives asset management and portfolio / wealth management consultancy and advisory services. We are aware that to run a standard wealth management firm can be demanding which is why we are well trained, certified and equipped to perform excellently well.

Jonah Kent & Co® Wealth Management, LLP is a client – focused and result driven venture capitalist firm that provides broad – based services. We will offer trusted and profitable wealth cum portfolio management services to all our individual clients, and corporate clients at local, state, national, and international level. We will ensure that we work hard to meet and surpass our clients’ expectations whenever they hire our services.

At Jonah Kent & Co® Wealth Management, LLP, our client’s best interest would always come first, and everything we do is guided by our values and professional ethics. We will ensure that we hire professionals who are well experienced in wealth management line of business and other investment portfolios with good track record of return on investments.

Jonah Kent & Co® Wealth Management, LLP will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our clients.

Our plan is to position the business to become one of the leading brands in the wealth management line of business in the whole of New York City, and also to be amongst the top 20 wealth management firms in the United States of America within the first 10 years of operations.

This might look too tall a dream but we are optimistic that this will surely be realized because we have done our research and feasibility studies and we are enthusiastic and confident that New York is the right place to launch our wealth management business before expanding our services to clients in other cities in The United States of America.

Jonah Kent & Co® Wealth Management, LLP is founded by Jonah Kent and his business partners for many years John Vardy. The organization will be managed by both of them since they have adequate working experience to manage such business.

Jonah Kent has well over 15 years of experience working at various capacities as a portfolio manager for leading investment banks and related firms in the United States of America. Jonah Kent graduated from both University of California – Berkley with a Degree in Accountancy, and University of Harvard (MSc.) Financial Management and he is an accredited and certified portfolio manager.

Jonah Kent & Co® Wealth Management, LLP is established with the aim of maximizing profits in the Portfolio cum Wealth Management industry. We want to compete favorably with the leading portfolio cum wealth management firms in the United States which is why we have but in place a competent team that will ensure that we meet and even surpass our customers’ expectations.

We will work hard to ensure that Jonah Kent & Co® Wealth Management, LLP is not just accepted in New York City – New York, but also in other cities in the United States of America where we intend opening our offices. We are in the Portfolio cum Wealth Management industry to make profits and we will ensure that we do all that is permitted by the law in the United States of America to achieve our aims and ambitions of setting up the business

Our services and products are listed below;

• Large cap equity asset management
• Fixed-income asset management
• Equity specialties asset management
• Alternatives asset management
• Large-cap equity, government fixed income and structured products
• Equity specialties and fixed income products
• ETFs and passively-managed products
• Alternatives
• Solutions Products and Other (target date products and LDIs)
• Related investment consulting and advisory services
• Our vision is to build a wealth management brand that will become one of the top choices for individual and corporate clients in the whole of New York City – New York and throughout the United States. Our vision reflects our values: integrity, service, excellence and teamwork.
• Our mission is to position the business to become one of the leading brands in the Portfolio cum Wealth Management industry in the whole of New York City, and also to be amongst the top 20 wealth management firms in the United States of America within the first 10 years of operations.

Our Business Structure

Ordinarily we would have settled for two or three staff members, but as part of our plan to build a standard wealth management firm in New York City – New York, we have perfected plans to get it right from the beginning which is why we are going the extra mile to ensure that we put in place stand operating processes and structure.

Jonah Kent & Co® Wealth Management, LLP we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company.

The picture of the kind of the wealth management firm we intend building and the business goals we want to achieve is what informed the amount we are ready to pay for the best hands available in and around New York and environs as long as they are willing and ready to work with us to achieve our business goals and objectives.

Below is the business structure that we will build Jonah Kent & Co® Wealth Management, LLP on;

• Chief Executive Officer

Chief Financial Officer (CFO) / Chief Accounting Officer (CAO)

• Wealth / Portfolio Managers

Admin and HR Manager

Risk Manager

• Marketing and Sales Executive
• Customer Care Executive / Front Desk Officer

Chief Executive Office:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• create reports from the information concerning the financial transactions recorded by the bookkeeper
• Prepares the income statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper.
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Portfolio / Wealth Managers

• Provides market research and implementing new investment product and strategies
• Create research and review platforms for new, existing and potential investment products
• Exceeds client expectations with returns on investments
• Work closely with analysts and traders to ensure trading strategy is carried out correctly
• Construct and review performance reports to show to investors
• Works directly with marketer to relay investment strategy and risk measures for website and other forms of marketing
• Performs due diligence visits and assessing investment management firms and quantitatively analyzing investment pools
• Has extensive knowledge of industry policies and regulations set in place by the SEC
• Focuses on capital introductions and networking to sign up new investors to the organization
• Plans, designs and implements an overall risk management process for the organization;
• Risks assessment, which involves analyzing risks as well as identifying, describing and estimating the risks affecting the business;
• Risks evaluation, which involves comparing estimated risks with criteria established by the organization such as costs, legal requirements and environmental factors, and evaluating the organization’s previous handling of risks;
• Establishes and quantifies the organization’s ‘risk appetite’, i.e. the level of risk they are prepared to accept;
• Risks reporting in an appropriate way for different audiences, for example, to the board of directors so they understand the most significant risks, to business heads to ensure they are aware of risks relevant to their parts of the business and to individuals to understand their accountability for individual risks;
• Handles corporate governance involving external risk reporting to stakeholders;
• Carries out processes such as purchasing insurance, implementing health and safety measures and making business continuity plans to limit risks and prepare for if things go wrong;
• Conducts audits of policy and compliance to standards, including liaison with internal and external auditors;
• Provides support, education and training to staff to build risk awareness within the organization.
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Designs job descriptions with KPI to drive performance management for clients
• Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carries out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Oversees the smooth running of the daily office activities.

Marketing / Investor Relations Officer

• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of relevant projects.
• Writes winning proposal documents, negotiate fees and rates in line with company policy
• Responsible for handling business research, marker surveys and feasibility studies for clients
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding increase sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company

Client Service Executive / Front Desk Officer

• Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the manager in an effective and timely manner
• Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
• Receives parcels / documents for the company
• Distributes mails in the organization
• Handles any other duties as assigned by the line manager

Jonah Kent & Co® Wealth Management, LLP engaged the services of a core professional in the area of business structuring to assist our organization in building a well – structured wealth management firm that can favorably compete in the highly competitive Portfolio cum Wealth Management industry.

Part of what the team of business consultant did was to work with the management of our organization in conducting a SWOT analysis for Jonah Kent & Co® Wealth Management, LLP. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Jonah Kent & Co® Wealth Management, LLP;

Our core strength lies in the power of our team; our workforce. We have a team that can go all the way to give our clients value for their money (good returns on their investment) and also to increase our annual returns; a team that are trained and equipped to pay attention to details and to deliver excellent jobs. We are well positioned and we know we will attract loads of clients from the first day we open our doors for business.

As a new wealth management firm, it might take some time for our organization to break into the market and gain acceptance especially from corporate clients in the already saturated Portfolio cum Wealth Management industry that is perhaps our major weakness. So also we may not have the required cash to give our business the kind of publicity we would have loved to.

• Opportunities:

The opportunities in the Portfolio cum Wealth Management industry is massive considering the number of corporate organizations and individual clients who would want their business portfolios and wealth to be properly managed. As a standard and accredited wealth management firm, we are ready to take advantage of any opportunity that comes our way.

Wealth management firm services involves large amount of cash and it is known to be a very high risk venture, Hence, whoever chooses to manage it must not just have solid investment background, but must also know how to handle risks and discover potential thriving businesses and opportunities. The truth is that if you are not grounded in risks management as a wealth manager, you may likely throw away peoples’ monies and investment.

Just as in any other business and investment vehicles, economic downturn, unstable financial market and unfavorable government economic policies can hamper the growth and profitability of wealth management firms.

7. MARKET ANALYSIS

• Market Trends

If you are a close observer of the trends in the Portfolio Management industry, you will agree that the unprecedented severity of the financial crisis and subsequent recession has contrasted the Portfolio Management industry’s recovery since, particularly in 2013, resulting into fluctuation in the revenue generated in the industry.

So also, improved market conditions are expected to push up stock returns and bond yields, resulting to remarkable growth for the Portfolio Management industry. On the average, it is trendy to find wealth management firms locate their offices in a financial hub and also employ strategies that can help them reduce market risk specifically by shorting equities or through the use of derivatives.

The main reasons for starting a wealth management firm is obviously to provide help our corporate and individual clients manage their business portfolio and wealth. The truth is that it takes a core professional to be able to identify investment vehicles with fewer risks that can give good returns on investment.

As a standard, accredited and licensed wealth management firm, Jonah Kent & Co® Wealth Management, LLP offers a wide range of investment portfolio management services hence we are well trained and equipped to services a wide range of clientele base and start – ups.

Our target market cuts across businesses and investors that has the required capital to invest in start – ups and other investment portfolios. We are coming into the industry with a business concept and investment strategies that will enable us produce good returns on investment for ourselves and our clients.

Below is a list of the individual and organizations that we have specifically design our products and services for;

• Celebrities
• Business man and women
• Small and medium scales businesses
• Accredited Investors
• Start – ups
• Investment Clubs
• Top corporate executives
• Corporate Organizations / Blue Chip Companies

Our competitive advantage

Despite the fact that wealth management firms’ investment strategies give huge returns on investment, you just have to choose the right wealth managers. If you drive through the street of New York City, you will come across several wealth management firms and related business ventures; that goes to show you that there are competitions at different levels in the industry.

For you to survival as a wealth management firm, you should be able to come up with workable investment strategies; strategies that will help you attract the required cash / capital and above all you should be a good risks manager and one that can spot a potential thriving investment opportunity from afar.

We are quite aware that to be highly competitive in the Portfolio cum Wealth Management industry means that we should be able to give good returns on investments to our clients, turn around the fortune of a dying company for good , spot potential successful business opportunities and invest in them, deliver consistent quality service, our clients should be satisfied with our investment strategies and we should be able to meet the expectations of clients.

Jonah Kent & Co® Wealth Management, LLP might be a new entrant into the Portfolio cum Wealth Management industry in the United States of America, but the management staffs and owners of the business are considered gurus. They are people who are core professionals and licensed and highly qualified portfolio management experts in the United States. These are part of what will count as a competitive advantage for us. So also, our office facility is strategically located in the commercial capital of the world.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (start – ups wealth management businesses) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

• Sources of Income

Jonah Kent & Co® Wealth Management, LLP is established with the aim of maximizing profits in the Portfolio cum Wealth Management industry and we are going to go all the way to ensure that we do all it takes to attract clients on a regular basis.

Jonah Kent & Co® Wealth Management, LLP will generate income by offering the following investment related services and products;

One thing is certain, there would always be accredited investors, small scale and medium scale businesses and wealthy individuals who would need the services of tested and trusted portfolio cum wealth management firms.

We are well positioned to take on the available market in New York City and other key cities in the United States of America and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base beyond New York City to other cities in the United States of America.

We have been able to critically examine the Portfolio cum Wealth Management industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in New York City.

Below are the sales projection for Jonah Kent & Co® Wealth Management, LLP, it is based on the location of our business and the wide range of investment management services that we will be offering;

• First Fiscal Year-: $550,000
• Second Year-: $ 1 Million
• Third Year-: $2 Million

N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same additional services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

We are mindful of the fact that there are stiffer competitions amongst wealth management firms and other related financial investment cum consulting service providers in the United States of America, hence we have been able to hire some of the best business developer to handle our sales and marketing.

Our sales and marketing team will be recruited base on their vast experience in the industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall goal of the organization. We will also ensure that our return on investment and excellent job deliveries speaks for us in the market place; we want to build a standard wealth management business that will leverage on word of mouth advertisement from satisfied clients (both individuals and corporate organizations).

Our goal is to grow our wealth management firm to become one of the top 20 wealth management firms in the United States of America which is why we have mapped out strategy that will help us take advantage of the available market and grow to become a major force to reckon with not only in the New York City but also in other cities in the United States of America.

Jonah Kent & Co® Wealth Management, LLP is set to make use of the following marketing and sales strategies to attract clients;

• Introduce our business by sending introductory letters alongside our brochure to corporate organizations, start – ups, accredited investors, entrepreneurs and key stake holders in New York City and other cities in The United States
• Advertise our business in relevant financial and business related magazines, newspapers, TV stations, and radio station.
• List our business on yellow pages ads (local directories)
• Attend relevant international and local finance and business expos, seminars, and business fairs et al
• Create different packages for different category of clients (start – ups and established corporate organizations) in order to work with their budgets and still deliver good returns on investment
• Leverage on the internet to promote our business
• Engage direct marketing approach
• Encourage word of mouth marketing from loyal and satisfied clients
• Join local chambers of commerce and industries in our city with the aim to networking and marketing our services

The uniqueness of the Portfolio cum Wealth Management industry is such that it is the result they produce that helps boost their brand awareness. Wealth management firms do not go out there to source any businesses or investors that they can come across but they are strategic when it comes to sourcing for clients to work with.

It will be out of place to boost your wealth management firm brand if you have not proven your worth in the industry. If you have successfully proven that you have what it takes to operate a successful wealth management firm, then you next port of call is to strategically engage the media to help you promote your brand and also to create a positive corporate identity.

We have been able to work with our brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the Portfolio cum Wealth Management industry by storm which is why we have made provisions for effective publicity and advertisement of our wealth management firm.

Below are the platforms we intend to leverage on to promote and advertise Jonah Kent & Co® Wealth Management, LLP;

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms
• Sponsor relevant community based events / programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote our brand
• Install our Bill Boards on strategic locations all around New York City.
• Engage in road show from time to time
• Distribute our fliers and handbills in target areas
• Ensure that all our workers wear our branded shirts and all our vehicles are well branded with our company’s logo et al.

Portfolio cum wealth management firms are known to generate income from various investment portfolios hence there are no pricing models for this type of business . But on the other hand, they tend to negotiate with their financial partners on percentage whenever they invest their hard-earned money in an investment vehicle and also from consultancy fees.

At Jonah Kent & Co® Wealth Management, LLP we will ensure that we give good returns on investment (ROI) and always maximize profits. As regards consultancy fees, we ensure that we abide by what is obtainable in the industry.

• Payment Options

The payment policy adopted by Jonah Kent & Co® Wealth Management, LLP is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Jonah Kent & Co® Wealth Management, LLP will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards / Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for all our services without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our services.

13. Startup Expenditure (Budget)

When it comes to calculating the cost of starting a wealth management firm, there are some key factors that should serve as a guide.

Besides, in setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting / leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business.

The business tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a wealth management firm; it might differ in other countries due to the value of their money.

Below are some of the basic areas we will spend our start – up capital in setting up our wealth management firm;

• The total fee for incorporating the Business in the United States of America – $750.
• The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400
• The amount needed to acquire a suitable Office facility in a business district 6 months (Re – Construction of the facility inclusive) – $40,000
• The total cost for hiring Business Consultant – $2,500
• The cost for equipping the office (computers, software applications, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $5,000
• Marketing promotion expenses for the grand opening of Jonah Kent & Co® Wealth Management, LLP in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for purchase of the required software applications (Investment tracking Software, Payroll Software, CRM software, and Accounting Software et al) – $10,500
• The cost of launching our official Website – $600
• Budget for paying at least three employees for 3 months plus utility bills – $10,000
• Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
• Miscellaneous: $1,000

Going by the report from the market research and feasibility studies conducted, we will need over one hundred and fifty thousand ( 150,000 ) U.S. dollars to successfully set – up a small scale but standard wealth management firm in the United States of America. Please note that the salaries of all our staff members for the first month is included in the expenditure.

Generating Funds / Startup Capital for Jonah Kent & Co® Wealth Management, LLP

No matter how fantastic your business idea might be, if you don’t have the required money to finance the business, the business might not become a reality. No doubt raising start – up capital for a business might not come cheap, but it is a task that an entrepreneur must go through.

Jonah Kent & Co® Wealth Management, LLP is a business that will be owned and managed by Jonah Kent and John Vardy, his business partner for many years. They are the sole financial of the firm, but may likely welcome partners later which is why they decided to restrict the sourcing of the start – up capital for the business to just three major sources.

These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $50,000 ( Personal savings $40,000 and soft loan from family members $10,000 ) and we are at the final stages of obtaining a loan facility of $100,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

The future of a business lies in the numbers of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Jonah Kent & Co® Wealth Management, LLP is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to give our clients good returns on their investment and to properly manage their investment portfolios.

We will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner of our business strategy.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more as determined by the board of the organization. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

• Business Name Availability Check: Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts various banks in the United States: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of All form of Insurance for the Business: Completed
• Securing a standard office facility in New York City: Completed
• Conducting Feasibility Studies: Completed
• Generating part of the start – up capital from the founder: Completed
• Applications for Loan from our Bankers: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the needed software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with vendors and key players in the industry: In Progress

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Investment Consulting Business Plan

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Vista Investors

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Our firm’s hallmark investment product will be the Vista Total Market Equity strategy and will be initially offered through a mutual fund that is registered by the U.S. Securities Exchange Commission (SEC). Technological advancements also permit for other economically feasible distribution channels, such as separately managed portfolios for large accounts. The details of our particular investment product offerings are revealed in another section of this plan. However, it’s worth stating up front that we are extremely encouraged by a research piece to be published in the Journal of Portfolio Management , that supports the philosophy behind our primary product offering. Ennis Knupp, a premier institutional investment consulting firm, published a study called, “Failure of the Multiple-Specialist Strategy: The Case for Whole Stock Portfolios.” One of the underlying tenets is that specialization within equity portfolio management has gone too far; thus resulting in sub-optimal portfolios.

VISTA INVESTORS will be structured as a partnership designed to capitalize on industry research performed by one of the founding entrepreneurs, Michael Douglas, during his professional career in investment management research. Last year alone, Mr. Douglas conducted research visits at the investment offices of over 30 firms. In addition, he conducted literally hundreds of meetings with key investment professionals from around the globe either in person or via telephone conference. Mr. Douglas’s team presents this business plan as a “start from scratch” outline of what a successful investment management organization should look like as the industry evolves in response to political, social, technological, and other influences.

VISTA INVESTORS will offer high net worth or “angel” investors opportunity to assume minority ownership positions in exchange for contributions to VISTA INVESTORS’ operating capital and for providing seed assets to establish the investment products described herein. This document alone does not constitute an offer of any type, nor does it provide any guarantee, financial, or otherwise. Risks associated with the VISTA INVESTORS’ business plan are not limited to those detailed in this document.

1.1 Objectives

The purpose of VISTA INVESTORS is to create value for owners, employees, and investors via the establishment of an investment management organization designed for the Third Generation. The Third Generation is defined in a cutting-edge research effort by Merrill Lynch & Co., Inc. and Barra Strategic Consulting Group as a phase in the investment industry requiring a special set of capabilities for success. Our team has drawn upon this study, numerous other studies, and perhaps most importantly, our own experience in the industry, to define a plan for the success of VISTA INVESTORS.

1.2 Mission

Buy and sell decisions are implemented quickly and efficiently across all portfolios. Where applicable, a trading rotation is used to avoid any type of systematic advantage or disadvantage an account may experience. Under virtually no circumstances would we deviate from our discipline.

1.3 Keys to Success

Probably the single most important factor that defines success in the investment management business is performance. Thus, one of our primary goals is the achievement of a rating by Morningstar, an organization widely known by both individual and institutional investors for its marks of accreditation in the mutual fund industry. To be rated by Morningstar, funds must have a minimum performance history of three years.

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Wealth Management Business Model

Under the wealth management business model , financial advisors provide expertise to mostly affluent clients who may be individuals, families, businesses, or organizations.

Table of Contents

Understanding the wealth management business model

The wealth management business model requires licensed financial advisors to consult with various affluent clients, learn about their circumstances, and then improve or enhance their financial situation.

Wealth managers offer the full gamut of financial services and, at least in theory, can provide virtually any such service that exists.

However, most specialize in areas where they feel most qualified to provide advice such as investing, accounting , retirement, estate planning, and tax optimization.

Fundamental to the wealth management business model is consultation. Indeed, the most effective wealth managers are customer-focused and do not recommend products or services that are inappropriate.

Instead, their primary objective is to determine what is important to the client (and why) and then develop a tailored solution.

On a related note, it should be mentioned that wealth managers provide more than just financial advice.

Instead of a piecemeal approach where multiple products from various financial professionals are combined, wealth managers recognize that affluent individuals are better suited to an integrated approach.

The responsibility of the financial professional, in this case, is to coordinate the various products and create a plan that is sensitive to the client’s current and future needs.

Wealth management fee structure

Wealth managers collect advisor fees in a few different ways.

Fee-only advisors charge flat, hourly, or annual fees, while others are compensated via commissions they collect from the investments they sell.

Some managers utilize a hybrid approach, earning a mixture of investment commissions and fees.

The most common fee structure tends to be an annual fee that is charged as a percentage of the total funds under management .

In 2021, for example, advisors collected a 1.02% fee (equivalent to $10,200) for managing an investment amount of $1 million.

Fees work on a sliding scale such that the more money is invested, the lower the amount a wealth manager charges.

What’s more, active managers who buy, hold, and sell securities in a bid to outperform the market will also collect a more substantial fee than those who passively manage portfolios.

Wealth management business model credentials

The particular credentials of those operating under the wealth management business model will depend on the country of operation.

In the United States, the most desirable credentials include:

• Certified Financial Planner (CFP) – requiring up to 1,000 hours of coursework and a minimum Bachelor’s level of education.
• Chartered Financial Analyst (CFA) – more relevant to investment research and portfolio management and issued by the CFA Institute. CFA holders must also have four years of prior education or work experience.
• Personal Financial Specialist (PFS) – PFS holders are credentialed by the well-regarded American Institute of Certified Public Accounts (AICPA). In essence, they are certified public accountants (CPAs) with further expertise in all aspects of financial management .

Key takeaways:

• Under the wealth management business model , financial advisors provide expertise and guidance to affluent clients who may be individuals, families, businesses, or organizations.
• Wealth managers collect flat, hourly, or annual fees and commissions from investments. While some choose one avenue over the other, many choose a hybrid approach and collect both.
• The wealth manager business model is characterized by more than just financial advice. Wealth managers coordinate various financial products from different professions and create a plan that satisfies the current and future needs of the client.

Key Highlights

• Definition and Client Base : The wealth management business model involves financial advisors providing specialized expertise to affluent clients, which can include individuals, families, businesses, and organizations.
• Wealth managers offer a comprehensive range of financial services and tailor their advice to enhance clients’ financial situations.
• They specialize in areas like investing, accounting , retirement planning, estate planning, and tax optimization.
• A customer-focused approach is fundamental, where the goal is to understand clients’ needs and develop tailored solutions.
• Wealth managers emphasize an integrated approach, coordinating various financial products to meet clients’ current and future needs.
• Wealth managers collect fees through various methods, including fee-only, commission-based, or a hybrid approach.
• The most common fee structure is an annual fee based on a percentage of the total funds under management .
• Fees are often on a sliding scale, with higher investments resulting in lower fees.
• Active management strategies may lead to higher fees compared to passive management .
• Wealth managers’ credentials vary based on the country of operation.
• In the United States, desirable credentials include Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), and Personal Financial Specialist (PFS).
• These credentials require extensive coursework, education, and expertise in financial management and related areas.

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Defining wealth management—and how training programs can help.

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Todd Sixt is the CEO of Strait & Sound . He is a successful and seasoned leader of financial service teams.

Wealth management is one of those terms that many people in this field think they understand. However, I believe it’s one of the most misunderstood concepts in the financial services industry. The primary problem might be that there are no established criteria to define what wealth management means. There are also no regulating bodies that control who can and cannot use the term.

The same cannot be said of an important term that is a close corollary of wealth management: certified financial planner (CFP). That term is very specific. It’s also regulated by a controlling body that defines who can and cannot use the term. That body also defines the training and work experience required to earn the CFP designation.

Why does this matter? For me, it’s really not about controlling bodies or proper uses. It’s ultimately about what advisors and their clients miss out on because advisors don’t understand how to deliver the full range of wealth management services. I see this as a problem in this industry. Thousands of financial advisors probably think of themselves as wealth managers—that is, until they get actual wealth management training. Then they discover a client-service model they wish they’d embraced years before.

How can I say this? Over the last 15 years or so, I’ve become a coach to financial advisors who want to become wealth managers. Here’s what I’ve observed: When a financial advisor commits to being trained in, and putting into practice, the core tenets of wealth management, it transforms their career, their health and their client relationships. The advisor’s work satisfaction goes up as their stress levels come down. Unhealthy stress is a major problem in this industry.

Breaking The Paycheck-To-Paycheck Cycle: 7 Steps To Financial Security

Caring for dixie a tale of financial freedom and unexpected costs.

But maybe best of all, relationships with clients become mutually satisfying. Wealth management, when done correctly, puts the fiduciary standard at the center of the relationship. It makes “acting in the client’s best interests” a lived reality. This is why I believe in wealth management training. Everyone—client, advisor and employer—benefits from it.

How do you define wealth management?

For many people, wealth management means “I manage a whole lot of money.” It’s sort of like being a financial advisor but on steroids. That is not what wealth management means to me. I think wealth management has a few key tenets. This is about:

• Coming to deeply understand a client’s complete situation, especially their family dynamics and dreams for the future.

• Designing and executing plans for every component of a client’s wealth (even non-investable assets).

• Aligning the disposition of a client’s wealth with their dreams.

• Being proactive and anticipatory of everything that could impact a client’s wealth.

• Being a reliable and steady long-term partner to clients.

• Being a client’s most trusted advisor: someone they can tell almost anything.

Developing these kinds of relationships takes time and effort. But more than anything, it takes intentionality. Most clients don’t know how to develop these kinds of relationships with advisors. This makes it the responsibility of the advisor to lead a process that will produce this kind of relationship. In my experience, most advisors really don’t know how to do this or what to focus on.

This is where wealth management training comes in. It can show the advisor how to build these deeply satisfying relationships with clients. It can train an advisor in the range of services they can offer that go well beyond investment management alone. It also helps advisors avoid situations that could get them in trouble with regulators.

What are wealth management services?

Most financial advisors take responsibility for investing a client’s liquid assets in ways that align with the client’s goals and risk tolerance. That is classic investment management. This is one of the core services of wealth management, but not by any means the complete service package. I believe wealth management includes at least these five focus areas:

1. Investment management.

2. Tax strategy.

3. Asset protection strategy.

4. Estate strategy.

5. Charitable strategy.

The financial advisor usually takes 100% responsibility for the investment management component of this service model. For the other areas, most advisors partner with a client’s existing service providers. However, the financial advisor leads the process. They serve as translator and facilitator of the clients’ wishes to the other advisors on the team.

I’d like to make two observations about this client-service model:

1. Not every client will need service in every one of these areas. High-income earning households with multiple generations usually face more financial complexity than other types of households. My recommendation is that you tailor the service offering to client needs.

2. The traditional 1%-of-AUM compensation model may not work. Some advisors charge professional service fees in addition to assets-under-management (AUM) fees. The most important thing is that the client finds value in the expanded service offering. Clients usually don’t mind paying for services that they deem to be valuable.

Are you a wealth manager?

Here is a quick litmus test to help you gauge what I refer to as your wealth management quotient (WMQ). Within the last five years, have you:

• Analyzed client tax returns for the previous five years to discover potential tax mitigation strategies?

• Introduced and championed those strategies to clients and their tax advisors?

• Analyzed the beneficiaries of your client’s life insurance policies to ensure the client’s wishes are up to date?

• Analyzed all insurance policies to ensure the replacement value of every asset is correct?

• Reviewed trust documents to ensure all assets that should be in the trust are there and liquidated assets are not?

• Reviewed wills and trusts to ensure that they are up to date and accurately reflect a client’s current wishes, especially if there have been births or deaths within the last few years?

• Analyzed a client’s history of charitable giving and recommended better approaches they may not have considered?

If you cannot answer yes to all of these questions and you think of yourself as a wealth manager, might I recommend that you find a great wealth management training program? It just might transform your career.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?

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RBC Wealth Management does not provide tax or legal advice.

Investment and insurance products offered through RBC Wealth Management are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested.

A business journal from the Wharton School of the University of Pennsylvania

Creating a Smart Wealth Management Plan

December 22, 2014 • 13 min read.

Charlotte Beyer, author of 'Wealth Management Unwrapped,' shares insights on what can be done to improve the relationship between investors and advisors.

• Finance & Accounting

Regular everyday investors are often plagued by a myriad of frightening questions: Am I making the right decisions with my investments? Does my financial advisor truly have my best interests at heart? Should I be managing my money on my own? How can I ensure fees aren’t corroding my investment portfolio?

Charlotte Beyer has based her career on answering these questions and providing advice on how investors can effectively work towards achieving their financial goals and improve their relationship with financial advisors. She is the founder of The Institute for Private Investors, which provides peer-to-peer networking and investor education for its members.

Beyer recently sat down with Knowledge at Wharton to discuss her new book, Wealth Management Unwrapped , and how investors can go about finding the right financial advisor and ensuring they are comfortable with their investment plan.

An edited transcript of the conversation appears below.

Knowledge at Wharton: Please tell us about your book, Wealth Management Unwrapped . I understand it came about as a result of your experiences creating an educational community to connect investors and financial advisors.

Charlotte Beyer: Investors and advisors are often put at loggerheads. Investors are often trying to protect themselves, while advisors generally need to sell investments and be perceived as very smart. This means the dialogue between investors and advisors is not as candid and open as it should be for addressing important issues.

In my work, I taught private wealth management at Wharton and worked with The Institute for Private Investors. This allowed me to try to break down the wall that existed between the two sides and improve the way investors and advisors related to one another.

Knowledge at Wharton: Do investors need advisors in the first place? Or can wealthy investors just be the CEOs of what you call “My Wealth Inc.” and manage their own money?

Beyer: They can choose either path. My book helps investors decide whether to do it on their own or delegate to an advisor.

Let’s use the analogy of a real CEO. Let’s say, as a CEO, you have to buy a telecom system. Do you go down and actually work on the switches and routers yourself? Or do you hire someone else for that job? That’s the distinction. Each investor knows their management style: they are either hands-on or they are more of a smart delegator.

“Let’s say, as a CEO, you have to buy a telecom system. Do you go down and actually work on the switches and routers yourself? Or do you hire someone else for that job?”

Knowledge at Wharton: You also compare it to renovating your kitchen.

Beyer: Yes. When you want to renovate a kitchen, you can go to Home Depot and think, “What size do I need? What am I doing? How can I renovate a kitchen?” Personally, when I walk into Home Depot, I become overwhelmed.

On the other hand, some people know exactly what they are doing. They are almost like contractors or carpenters. They love being in Home Depot. They know exactly what size lumber and cabinets to get.

Knowledge at Wharton: There are people who believe that investing using a passive indexing approach is better than trying to outsmart the market. A passive approach allows you to diversify your risk and your investment performance will track a broader market. What do you think are the pros and cons of this approach?

Beyer: In my book, I describe the danger of picking one investment strategy, putting it on autopilot and going away. That’s called abdicating, not delegating.

Most investment professionals would agree that the key is asset allocation. Even if all your money is in passive investments, you still need to be aware of how you’re allocating your money.

Life changes are also critical. You may have one type of investment allocation at a certain age or in a certain circumstance, but you’ll need a different strategy later in life. That’s where an advisor can potentially come in, or not, depending on your investment needs.

Knowledge at Wharton: Let’s say an investor decides not to abdicate, but to delegate, to an advisor. What are the most important considerations in choosing an advisor? How do you avoid advisors who may be too sales-y in their approach?

Beyer: It’s hard. Some of the best salespeople are very compelling and you may want to work with them, but you don’t want to have the wool pulled over your eyes. A lot of investors are leery of this.

Most importantly, you need to know what kind of investor you are. Then you need to set out your needs and your expected outcomes. Ask yourself, “What do I want to do with this wealth?” Then make a plan for how to judge advisors to find the right person.

All of these exercises are ones that you should do with a number of advisors in an interview process. If you take your time and meet with multiple advisors, you’ll begin to discern who is right for you and avoid the mere salesperson. You need a person that you can understand, who is going to suit your personal needs and goals.

Knowledge at Wharton: You recommend something called a five P exercise. Tell us about that.

Beyer: The five Ps are the components of an advisory firm. It is the firm’s philosophies, processes, performance, people and fees, but you can spell fees like this — PHEES — to keep with the P theme. Investors have to assess these five Ps.

You have to look at all of these areas equally and not place too much importance on one. For example, if you really value a personal connection with an advisor, you may hastily pick a firm filled with people like you. That’s the “People Like Us” Syndrome, which can be harmful. Alternatively, if you are too focused on performance, you may keep hiring and firing advisors who initially have hot investments that suddenly go cold.

Knowledge at Wharton: What’s the best way to protect yourself and choose a suitable advisor?

Beyer: Practice makes perfect. Interview four or five advisors. Have the exact same questions for each advisor to put them on a level playing field.

You could meet an advisor who shows that he has an incredible track record beginning in March 2009. The performance could be compelling. However, the other three firms you interview won’t get the same chance to use that exact timeline, so you cannot compare overall performance for all the firms. This can be deceiving. Having a system and asking the exact same questions each time is much fairer.

“Fees are the explosion waiting to happen in our industry. The more transparency comes to the fore, the more investors lose faith in the industry because fees are kept hidden.”

Knowledge at Wharton: Let’s talk about fees. How can investors figure out the right level of fees they should pay for advice?

Beyer: Fees are the explosion waiting to happen in our industry. The more transparency comes to the fore, the more investors lose faith in the industry because fees are kept hidden.

Therefore, investors should ask advisors: “Are you being paid directly or indirectly for what you’re suggesting I buy?” That ensures investors are more informed.

We did a study with Knowledge at Wharton and State Street Global Advisors about investment fees. It revealed that, if you show fees in context it will help investors decide whether the fees are fair. Investors should see the fees they are being offered, the fees offered by competitors and the levels of fees charged for individuals with different levels of wealth. Asking for a chart of these fees will show a potential advisor that you’re well informed and will give you a wonderful context for realizing whether the fees are fair. Remember, going to the cheapest provider may be alluring, but there is the risk that you will get what you pay for. With the cheapest provider, you may be missing out on some critical advice.

Knowledge at Wharton: In that study, it showed advisors thought that investors trusted them at a certain level, but in reality investors trusted them at a much lower level. What does this tell you about the value of trust, especially in the aftermath of the financial crisis? How can trust be established between investors and advisors?

Beyer: Trust is the glue that holds together any investor-advisor relationship. The way to develop trust is to create metrics for valuing advice, and create a report card so you can track what is discussed, what is agreed upon, and how your goals match up with your investment plan and performance. This builds trust. Trust is something that is shown over time through predictability.

But trust is a two-way street. Professional advisors need to expect investors to be trustworthy and to share information that will help them do a better job for their family. But oftentimes, both sides are being a little less than candid.

Knowledge at Wharton: Do you see trust primarily as a matter of metrics or as a matter of communication, or both?

Beyer: It’s both. It’s communication based on a foundation of real metrics.

The classic error is for an investor to trust an advisor who says, “I will help you sleep at night.” This is a cliché. Investors should come back and ask, “How will you do that?” It’s all about communication. But unfortunately, the investment industry generally speaks a jargon-filled language that can create mistrust.

Knowledge at Wharton: In your book, you identify four major risks that can send an investment strategy off a cliff. What are those risks and how can investors guard against them?

Beyer: This is based on work by Geoff Davey from FinaMetrica in Australia. He said that we too often look at risk in terms of “required risk,” which is the one that we chart and that Wharton professors are always citing. But there are three other risks that are equally important. There is risk tolerance, which is related to an investor’s personality. There’s perceived risk, which is related to how an investor views the world. For example, are they panicked by last week’s market volatility? Then there is situational risk, which is gauged based on who they are and how old they are, along with other lifestyle-related factors.

“The way to develop trust is to create metrics for valuing advice, and create a report card so you can track what is discussed, what is agreed upon, and how your goals match up with your investment plan and performance.”

Knowledge at Wharton: In your book, you told this story: an investor asks his advisor the time, but then the advisor tells him how to make a watch. How should advisors communicate with investors about risk and other investment issues without bombarding them with too much detail?

Beyer: This is where emotional IQ is important. Many investment professionals lack emotional IQ, or EQ. They have a huge amount of IQ. Smart investment firms will find the right advisors to have a dialogue with investors in order to better understand their personality and preferences.

Too often, firms just plop down a big investment manual and say, “Look here.” These professionals don’t realize that each investor has a different interest and curiosity in investment details.

But one thing holds true across all investor types: charts and pictures are critical. Charts present a compelling picture to investors, whether it’s a risk/return chart or a simple graphic explaining performance. Investors respond to this.

Knowledge at Wharton: How should investors measure their advisor’s performance? When do you know that it’s time to let an advisor go?

Beyer: Let’s start with the last question.

An investor came to me right after the financial crisis and said, “My advisors lost so much money. I want to fire him right away. Then I need to hire somebody right away. Can you give me three names for suitable advisors?”

I said, “No, I can’t give you three names. But I will give you a system for looking at how to work through this issue.” The system requires an investor to conduct a competition of sorts for their assets, and the competition must include the current advisor and other prospective advisors.

Using a system of questions that I gave to this investor, he ended up retaining the advisor he was about to fire because the advisor gave him context to understand his past investment performance. He realized that his portfolio performed better than most endowment funds, investors and pension plans. He realized that when he broke down the asset classes and how they had performed versus a benchmark, his performance was not so bad after all.

This begs the question, “Why don’t investors get this information without having to ask?” But it’s all about evolution in the industry — the more investors and advisors communicate, the more advisors realize their client’s wants and needs.

About your first question on measuring your advisor: that’s something to assess before you hire the advisor. It’s all about setting expectations. You have to ask: What is our risk target? What returns are we looking for? When do I want to get a call from you? When do I want to get an e-mail? How often do I want to meet with you? Then at each meeting, you must look at the metrics that were set out before you even hired the advisor. It really starts with the investment policy statement, the statement of goals and the purpose of the money.

Knowledge at Wharton: Let’s assume that we have one investor and one advisor in the room right now. What’s the one piece of advice you would give to each of them about optimizing their working relationship?

Beyer: My advice is: “Dare to say it.” Investors need to be brave and dare to say, “I don’t understand what you’re talking about,” or, “I don’t feel comfortable in this market.”

The advisor needs to be upfront and dare to say, “We’re not always going to agree,” and “I understand you want a custom report, but we cannot customize every report for each client or else we will not be profitable.”

Both sides need an extra dose of courage.

More From Knowledge at Wharton

Personal Financial Data Rights Are Coming, but Not for All

Why We Shouldn’t Leave Low-income Americans Out of the Financial Bill of Rights

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Wealth Management Business Plan Template

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Download this Wealth Management Business Plan Template Design in Apple Pages, Word, Google Docs Format. Easily Editable, Printable, Downloadable.

Are you in the business of sustaining the growth of long-term wealth of an organization or company? If so, then download our premium Wealth Management Business Plan Template that you can use instantly anytime, anywhere, at any device. This template is perfect for businesses that combine both financial planning and specialized financial services, including personal retail banking services, estate planning, legal and tax advice, and investment management services. The file is professionally-designed to help you create a document that lets you understand the potential risks and rewards of this kind of business. It is easy to use and fully customizable to suit your needs, so avail today!

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FREE 9+ Wealth Management Business Plan Samples in PDF | MS Word | Apple Pages | Google Docs

Wealth management is a corporate business that involves an advisory service that combines several other financial services to address the needs of its clients. It’s an entire process that involves consultation and information gathering to be able to come up with a specific strategy that uses a range of financial products as well as services. When approaching different cases of wealth management , a holistic approach is often taken t0 meet the specific needs of a client. These needs vary from one client to another, and would usually range between  investment advice, estate planning, to accounting, retirement, and tax services .

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Businesses are already very complicated entities to manage, even more when you have a venture that aims to handle the finances of your own clients. Starting a business within the realms of coaching, consultation , and management can be really expensive and quite difficult to find your place. It can be quite the chore to keep track of everything that needs to be taken care of, to make sure that every component is taken into account. That is why for most businesses and ventures, it is very important to be able to come up with a comprehensive enough layout or a plan for their own business. Regardless if the venture is a startup business or not. A well-laid out plan helps with keeping everybody on track for the entire duration of the business, especially managers and supervisors since they often oversee all business operations. A well written business plan can do wonders for the sake of your business. Letting you move forward without much of a struggle.

Running a business without a business plan is highly discouraged. That’s because doing so is synonymous to doing something without a clear goal in mind. Without a path to follow. Without direction. And business plans give you that kind of direction. Aside from that, it also provides you with a whole another set of benefits, like including, but not limited to, being able to come up and experiment with new ideas without having to invest too much time and resources on experimentation since you’ve already got that part covered in your business plan. Before you actually begin writing the document, check out these wealth management business plan samples that we have listed down below first, and when you’ve acquainted yourself with the document pretty good, feel free to use these samples as guides or maybe even as templates for when you decide to write your own wealth management business plan.

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A business plan is essentially a document that presents how a business would define their own objectives and what steps are the management willing to take to reach the goals that they have set. A business plan works like a guideline that the company can follow depending on the the inputs provided by their own respective departments like marketing, financial, and operational. Aside from being a document that guides the entirety of business operations, a business plan can also be used to attract potential business partners and investors even before the company has been properly established, making the document even more valuable, especially for new businesses and startup companies. Though that doesn’t mean that a business plan is only for startup ventures.

Every company should be able to draft their own business plan so that they have a document that they can regularly review and update to see if they are any closer to the goals that they have projected and inspect how the circumstances that they have been working on has changed over time. A well drafted business plan should be able to outline the estimated costs of the project as well as its projected outcomes. It should also be able to assess the potential pitfalls that a decision from the management may have. Despite being used prominently in the business and corporate industry, it is still pretty rare to see two different business plans from two different companies to be completely identical because every organization faces their own unique problems, which then leads to unique solutions for those problems.

The length of your business plan differs depending on the nature and the scope of the business that your plan will focus on. Though it is pretty common for business plans to be around 15 to 20 pages long. And even if no two business plans are completely alike, they still operate with about the same elements. These elements are listed and will be discussed in more detail down below.

A business plan should begin with a paragraph that presents the company and what the organization stands for. This section is called the executive summary, and executive summaries present the mission-vision values of the company itself, the overall company leadership, employee operations, and where the business is generally located.

The following section should then contain a list of the products and services that the company is currently offering. It should include the list of prices, product lifespan, duration of services, as well as the benefits that the client may have once they choose to do business with your company. You can also include other components like manufacturing and production processes if you think it is necessary.

Every business needs to have a perfectly clear understanding of their own customer base and its respective demographic. Market analyses will give you an idea of who or what the competition is, and how difficult it would be to overtake them.

After analyzing your market, identify the strategies that you think are necessary to attract your target market and your plans on how to keep them engaged with your business. Outline a clear distribution channel to show how the management plans to reach out to your customers, as well as inspect the marketing and advertising campaigns that you plan to put in place.

Financial plans can be very attractive especially for investors and potential business partners who wish to be a part of a company that has the capabilities to return a good investment. You should be able to include your financial statements, balance sheets, and other relevant financial information.

A company needs to have a budget in place to operate properly. Your budget should be able to showcase the costs, manufacturing, development, and the expenses that your business will  make.

A wealth manager provides financial advice to high net-worth clients. They conduct financial planning, investment management, and assists with preserving and generating wealth.

If you really think about it, the difference of the two is already in its name.  Asset Management concerns with assets like cash, stocks, bonds, and real estate, while Wealth Management concerns all aspects of wealth including tax, business, and legacy issues.

Financial advisors typically earn a lot from their clients. Private wealth managers can easily make around $500,000 from one client.

Another thing to remember about a business plan is that the document is not supposed to be left static. The writing process does not stop once all components are written and put into paper. It’s a live document, meaning that the business plan should be reviewed and updated over time. It should be able to adapt to the changes within the business and how the business operates, as well as its own environment.

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Private wealth management financial planning for business owners.

The right wealth plan can help protect your personal finances and the business you’ve worked hard to build.

As a business owner, you’ve faced challenges along the way, and you’ve flourished. Your personal persistence, hard work and vision have been instrumental to your success. As you face the challenges of today’s business climate, the perspective of a trusted professional can give you a competitive edge while also helping you work toward other financial goals that are important to you. Your dedicated U.S. Bank Private Wealth Advisor will work with you to create a wealth plan, then collaborate with a team of professionals to help you make your plan a reality.

Specialized wealth strategies

Business financial planning.

As you continue to grow your enterprise, we can help you make informed and strategic decisions regarding your financial questions, such as:

• What are the risks in having the majority of my net worth tied up in my business? 
• Do I have the right capital structure in place for my overall personal and business wealth? 
• Do I have enough liquidity to take advantage of sudden opportunities or defend against risks associated with cash shortage? 
• When is the right time to plan for an exit or business succession? 
• Is it better to transfer my business to a family member or employees, or to sell to a strategic buyer?

Find the right balance

Personal financial planning.

We can provide guidance on how to achieve your personal wealth goals, while helping you balance the needs of your business. Our team offers a range of wealth advisory and planning services to help you make informed decisions. This may include an analysis of:

• Personal assets and liabilities
• Cash flow management
• Potential tax consequences
• Your investment plans
• Charitable giving
• Wealth transfer strategies

Business owner advisory services

Addressing your business needs.

We can also assess your business growth or transition opportunities. Your situation may involve more complex needs like:

• Strategic business assessment
• Growth opportunities
• Business succession and exit options
• Liquidity analysis and planning

Our dedicated Business Owner Advisory Services team can offer objective advice from a business owner point of view.

The team includes previous business owners, corporate executives and consultants who bring vast experience and insights to help answer your financial questions.

Learn more about our  Business Owner Advisory Services .

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Your vision, our expertise.

With your goals in mind, your Private Wealth Advisor will design a custom financial plan that brings together the right mix of products and services to fit your needs. Select any of the following links to learn more about our services.

Insurance products are available through our affiliate U.S. Bancorp Investments.

Insights from our experts

Growth strategies for business owners

Discover the best strategies to grow and expand your business, whether it’s through marketing, partnerships, outsourcing or acquisitions.

Address these 4 issues before selling your business

Even if the sale of your business is years away, it’s never too early to start planning for how it will happen.

Preparing your business exit strategy: Key factors to consider

Selling your business can require a significant commitment of time and effort on your part. A business exit strategy can help guide the process on your terms.

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Investment and insurance products and services including annuities are: Not a deposit ● Not FDIC insured ● May lose value ● Not bank guaranteed ● Not insured by any federal government agency.

U.S. Bank, U.S. Bancorp Investments and their representatives do not provide tax or legal advice. Each individual's tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.

Business Owner Advisory Services are provided for educational and illustrative purposes only, and do not guarantee the success of any strategy or recommendation. Business Owner Advisory Services are not fiduciary in nature. U.S. Bank and U.S. Bancorp Investments serve in a non-fiduciary role when providing these services.

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Investment and insurance products and services including annuities are available through U.S. Bancorp Investments, the marketing name for U.S. Bancorp Investments, Inc., member  FINRA and SIPC , an investment adviser and a brokerage subsidiary of U.S. Bancorp and affiliate of U.S. Bank.

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