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Writing a Business Plan

starting a financial planning business uk

While it may be tempting to put off, creating a business plan is an essential part of starting your own business. Plans and proposals should be put in a clear format making it easy for potential investors to understand. Because every company has a different goal and product or service to offer, there are business plan templates readily available to help you get on the right track. Many of these templates can be adapted for any company. In general, a business plan writing guide will recommend that the following sections be incorporated into your plan.

Executive Summary

The executive summary is the first section that business plans open with, but is often the last section to actually be written as it’s the most difficult to write. The executive summary is a summary of the overall plan that highlights the key points and gives the reader an idea of what lies ahead in the document. It should include areas such as the business opportunity, target market, marketing and sales strategy, competition, the summary of the financial plan, staff members and a summary of how the plan will be implemented. This section needs to be extremely clear, concise and engaging as you don’t want the reader to push your hard work aside.

Company Description

The company description follows the executive summary and should cover all the details about the company itself. For example, if you are writing a business plan for an internet café, you would want to include the name of the company, where the café would be located, who the main team members involved are and why, how large the company is, who the target market for the internet cafe is, what type of business structure the café is, such as LLC, sole proprietorship, partnership, or corporation, what the internet café business mission and vision statements are, and what the business’s short-term objectives are.

Services and Products

This is the exciting part of the plan where you get to explain what new and improved services or products you are offering. On top of describing the product or service itself, include in the plan what is currently in the market in this area, what problems there are in this area and how your product is the solution. For example, in a business plan for a food truck, perhaps there are numerous other food trucks in the area, but they are all fast –food style and unhealthy so, you want to introduce fast food that serves only organic and fresh ingredients every day. This is where you can also list your price points and future products or services you anticipate.

Market Analysis

The market analysis section will take time to write and research as a lot of effort and research need to go into it. Here is where you have the opportunity to describe what trends are showing up, what the growth rate in this sector looks like, what the current size of this industry is and who your target audience is. A cleaning business plan, for example, may include how this sector has been growing by 10% every year due to an increase in large businesses being built in the city.

Organization and Management

Marketing and sales are the part of the business plan where you explain how you will attract and retain clients. How are you reaching your target customers and what incentives do you offer that will keep them coming back? For a dry cleaner business plan, perhaps if they refer customers, they will get 10% off their next visit. In addition, you may want to explain what needs to be done in order for the business to be profitable. This is a great way of showing that you are conscious about what clear steps need to be taken to make a business successful.

Financial Projections & Appendix

The financial business plan section can be a tricky one to write as it is based on projections. Usually what is included is the short-term projection, which is a year broken down by month and should include start-up permits, equipment, and licenses that are required. This is followed by a three-year projection broken down by year and many often write a five-year projection, but this does not need to be included in the business plan.

The appendix is the last section and contains all the supporting documents and/or required material. This often includes resumes of those involved in the company, letters of reference, product pictures and credit histories. Keep in mind that your business plan is always in development and should be adjusted regularly as your business grows and changes.


starting a financial planning business uk

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Making a Risk Management Plan for Your Business

It’s impossible to eliminate all business risk. Therefore, it’s essential for having a plan for its management. You’ll be developing one covering compliance, environmental, financial, operational and reputation risk management. These guidelines are for making a risk management plan for your business.

Developing Your Executive Summary

When you start the risk management plan with an executive summary, you’re breaking apart what it will be compromised of into easy to understand chunks. Even though this summary is the project’s high-level overview, the goal is describing the risk management plan’s approach and scope. In doing so, you’re informing all stakeholders regarding what to expect when they’re reviewing these plans so that they can set their expectations appropriately.

Who Are the Stakeholders and What Potential Problems Need Identifying?

During this phase of making the risk management plan, you’re going to need to have a team meeting. Every member of the team must be vocal regarding what they believe could be potential problems or risks. Stakeholders should also be involved in this meeting as well to help you collect ideas regarding what could become a potential risk. All who are participating should look at past projects, what went wrong, what is going wrong in current projects and what everyone hopes to achieve from what they learned from these experiences. During this session, you’ll be creating a sample risk management plan that begins to outline risk management standards and risk management strategies.

Evaluate the Potential Risks Identified

A myriad of internal and external sources can pose as risks including commercial, management and technical, for example. When you’re identifying what these potential risks are and have your list complete, the next step is organizing it according to importance and likelihood. Categorize each risk according to how it could impact your project. For example, does the risk threaten to throw off timelines or budgets? Using a risk breakdown structure is an effective way to help ensure all potential risks are effectively categorized and considered. Use of this risk management plan template keeps everything organized and paints a clear picture of everything you’re identifying.

Assign Ownership and Create Responses

It’s essential to ensure a team member is overseeing each potential risk. That way, they can jump into action should an issue occur. Those who are assigned a risk, as well as the project manager, should work as a team to develop responses before problems arise. That way, if there are issues, the person overseeing the risk can refer to the response that was predetermined.

Have a System for Monitoring

Having effective risk management companies plans includes having a system for monitoring. It’s not wise to develop a security risk management or compliance risk management plan, for example, without having a system for monitoring. What this means is there’s a system for monitoring in place to ensure risk doesn’t occur until the project is finished. In doing so, you’re ensuring no new risks will potentially surface. If one does, like during the IT risk management process, for example, your team will know how to react.


starting a financial planning business uk

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Starting your own financial planning on mortgage company

Okay, so you want to become a self-employed financial planner or mortgage adviser. 

And why not? 

We are without a doubt entering a hugely exciting phase in the financial planning profession, with the exit of nearly  7,000 financial planners in the next 5 years  it’s going to leave a huge gap in the market for new financial planning companies to prosper, and one thing I can say with confidence is the next generation of business owners have never had it easier when starting your own financial planning or mortgage company

Many entrepreneurial spirited financial planners and mortgage advisers want to break from the shackles of being employed to becoming the head of their own firms. It may be getting to the point within your career where you strongly believe you can do the job better and, avoid the pitfalls and challenges you’ve seen other companies fall at.

Sarah Tucker

Or quite simply you just want to be master of your own destiny and feel that being employed doesn’t fit your personal and professional values, life goals, or family commitments, take Sarah Tucker AKA the mortgage mum! Her whole business model is set up around mums managing their work-life around their family commitments, smashing the stereotype of the typical mortgage company which in turn attracts a different type of client, double whammy!

So, you are keen to go it alone but where do you start?!

Well, the good news is that it has never been easier to start up your own financial planning or mortgage company. With outsourced paraplanning, administration, and compliance support along with affordable support services like personal assistants, marketing and social media executives, and new time-saving technology to catapult your business to the next level.

Not to mention, DIY website platforms and lead-generation companies specifically focussed on financial planning and mortgage clients…to name a few!

Throughout my time being the director of Recruit UK and host of  the financial planner life podcast , I’ve spoken to thousands of companies of all different shapes and sizes. So here is a 4-point list of things to consider, to make your new company a roaring success:

  • Creating your business plan
  • Deciding whether you’re going to be a  registered individual, appointed representative or, directly authorised
  • Office space or working from home
  • What sets you apart from the other firms?
  • Create a business plan

Planning is the key to running a successful financial or mortgage company. Those who don’t have a good structure and plan, are usually those who fail.

The first thing I would suggest to do is when creating your business plan, look at how you’re going to generate business within the first 3, 6, 9, and 12 months, and what you want it to look like at each stage. Let’s face it, no clients no income! At this stage you need to be brutally honest with yourself, start with segmenting clients, introducers, and prospects into A, B and C.

A – Advocates, strong client relationships: Know them on a personal level and they buy into you and your values. They will 100% follow you.

B – Current shorter-term relationships – building trust.

C – Prospects, focusing on the people you would like to work with.

Gregg Moss

This helps with forecasting income at this stage, it’s worth taking into consideration any restrictive covenants you have in place with your current employer.  This could be non-solicitation or non-dealing clauses.  It’s imperative to look into this before the move because breaking these restrictions can cause you all sorts of unnecessary setbacks.  Not to mention, costly lawsuits. Therefore, seek legal advice when it comes to introducing any existing client relationships.

I had a great chat with Gregg Moss from Eleven.2 FP about this on the financial planner life podcast, check it out here.

“With restrictive convenience always air on the side of caution because it’s something that could ruin your life.”

Greg Moss   Eleven.2 FP  on Financial Planner Life podcast 

Want to learn more about restrictive covenants? See episode 33 of the  Financial Planner Life  podcast with  Greg Moss.

  • Deciding whether you’re going to be a registered individual, appointed representative or, directly authority

When you’re starting out, it can feel like you’re being pulled in many directions, and making the decision to be a registered individual, directly authorised, or an appointed representative can be difficult. So, let’s consider the perks and pitfalls of each.

Smaller or new financial adviser firms often choose to become an appointed representative or registered individual of an already FCA-authorised firm, rather than becoming FCA-authorised in their own right. Predominantly because of escalating requirements and the growing cost of compliance.

An appointed representative is basically a firm that carries out regulated business on behalf of another directly authorised one. They must still meet all FCA requirements and be thoroughly assessed and competent, but they don’t hold regulatory responsibility themselves. Instead, it’s the directly authorised firm that takes regulatory responsibility and is ultimately accountable. It acts as a kind of protective umbrella network and provides many benefits – especially when it comes to hidden costs, compliance, risks and regulatory changes.

Another option is to become a registered individual. Rather than being an appointed representative or directly authorised, a registered individual works for a directly authorised company on a self-employed basis. As a registered individual, a percentage of all your work is sometimes provided by the umbrella firm, which can be handy if you are new to the industry or if you are good at writing business but not so skilled when it comes to marketing. All regulation and compliance issues are taken care of, too – leaving you free to focus on winning new clients and writing new business.

Becoming directly authorised can be a lot of work and can be very time-consuming. Your time, particularly within the first 6 months will predominantly be used up developing your business, finding, and training staff, etc. This can delay you from getting on with actually giving financial advice and winning clients.

Recruit UK recently put out a post on LinkedIn to find some insider tips for financial planner company start-ups. Here’s what some directly authorised advisers had to say:

“I used simplybiz to go DA straight away. I’m solo. They assist all the way through and once you’re authorised. Definitely recommend it.”

Oliver McDonald, Co-founder & Director at Engage Wealth Management

Taylor Beavis , Director & Financial Adviser at Universe Financial Advice adds:

Taylor Beavis

“I’m DA. I love it. BUT you have to be ready for a LOT of hard work and for the challenge. If you want to sit back and let someone else do the processes, procedures and compliance…network is your best bet I would say…and there are some fab ones out there!”

*Want to know more about the differences and perks of being a registered individual, appointed representative or, directly authority? See our previous article,  DA, AR, or RI – which is the best route for your business?

  • Office space and working from home

Don’t think having an office is the be all and end all of running a business. Plenty of people start out from home. A question you need to ask yourself when in the planning process of your start-up company is: Can I function using zoom and other online platforms and networks?

It’s easier now, more than ever to start your own financial planning or mortgage company from home. Take it from  James Wallis , owner of Aristotle Financial Planning. He tells the Financial Planner Life podcast about starting up his own company from home amid the pandemic. Here’s what he had to say:

“When you start a business you have an idea of how everything is going to be. Then a global pandemic hits and you can’t see any of your clients and you aren’t allowed in the office. So, you just have to adapt. I was fortunate as I was able to bring some existing clients with me but I wasn’t able to see them. So everything was done remotely, video telephone, post but in some ways, it helped because it made everything quicker as everything was done digitally.”

James Wallis, owner of Aristotle Financial Planning

With the pandemic came huge digital milestones which now enable remote and hybrid roles to thrive. So, when setting up your own company, don’t just consider the roles that are easily done from home, but the work-life balance that is now more important than ever to your employees. Having an office space is not the be-all and end-all of a successful business.

Top tip: If you do choose to go down the working-from-home route, make sure you take into consideration your employee’s mental wellbeing. Look at your wellbeing policy and make sure you can offer your employees all the support they need to work from home and thrive within their working environment- mentally and physically!

For more information on working from home, see our article,  Financial planners, Paraplanners and Working from Home

Differentiating yourself from other firms will help you create a strong brand and wider network. Think about your goals, working ethos and values, picking a niche, and understanding your market.

Richard Wallis

Richard Weatherburn  told the Financial Planner Life Podcast about how important it is to pick your niche and understand your target market.

“I never understand why financial advisers all seem to scrap around for the same 1% clients. We focus on people who aren’t already working with a financial adviser. We aren’t stealing business from anybody; we are just helping people that didn’t realise they needed help in the first place. Your bricklayers, plumbers who don’t get any sick pay, so they need income protection. They’ve got kids, so they need life cover, they haven’t got a workplace pension, so they need a pension. They are all earning decent money, and they are certainly profitable to take on as clients, then they introduce you to 10 others who are in the same position.”

Richard Weatherburn of 313 Wealth Management

A great way of reaching your niche audience is to aim for those who you can relate to. The mortgage mum, Sarah Tucker is a fantastic example of this, and she emphasises that authenticity is key. On the  Financial Planner Life podcast , she explained to me about how she has never paid for advertisement. Her selling point is just her, being herself and therefore appealing to like-minded mums and women, inspiring them to understand their mortgages more than the “suited and booted man of the past”.

This will help you plan out how you want to convey your online presence. Think about your network, what makes them tick and what they need from you to gain solutions and inevitable generate leads for your business.

So…I hear you thinking, what now?

James Wallis

If you are at that point in your career where you would like to start up your own financial planning or mortgage company. Reach out to recruit UK we can help you make the rig

ht decision around being a registered individual, appointed representative or the directly authorised route and of course, introduce you to the best of the best in the market.

“Finally, just do it! If you never do it, you’ll always spend time wondering what could have been. There is nothing worse than living life wondering, what if? The worst thing that could happen with me is that, I go into an employed advisory role, which is still not a particularly bad position to be in.”

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Background: Recruit UK Limited understands that your privacy is important to you and that you care about how your personal data is used. We respect and value the privacy of all our customers and will only collect and use personal data in ways that are described here, and in a way, that is consistent with our obligations and your rights under the law.

1. What Does This Notice Cover?

This Privacy Information explains how we use your personal data: How it is collected, how it is held, and how it is processed. It also explains your rights under the law relating to your personal data.

2. What is Personal Data?

Personal data is defined by the General Data Protection Regulation (EU Regulation 2016/679) (the “GDPR”) as ‘any information relating to an identifiable person who can be directly or indirectly identified in particular by reference to an identifier’. Personal data is, in simpler terms, any information about you that enables you to be identified. Personal data covers obvious information such as your name and contact details, but it also covers less obvious information such as identification numbers, electronic location data, and other online identifiers.

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Under the GDPR, you have the following rights, which we will always work to uphold:

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We may collect some or all the following personal data (this may vary according to your relationship with us):

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Under the GDPR, we must always have a lawful basis for using personal data. This may be because the data is necessary for our performance of a contract with you, because you have consented to our use of your personal data, or because it is in our legitimate business interests to use it. Your personal data will be used for or may be used for one of the following purposes:

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With your permission and/or where permitted by law, we may also use your personal data for marketing purposes, which may include contacting you by email and/or telephone and /or text message and/or post with information, news, and offers on our services. We will always work to fully protect your rights and comply with our obligations under the GDPR and the Privacy and Electronic Communications (EC Directive) Regulations 2003, and you will always have the opportunity to opt out.

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We will only store or transfer your personal data in the UK or elsewhere in the EU. This means that it will be fully protected under the GDPR.

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You will be kept fully informed of our progress.

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12. Changes to this Privacy Notice We may change this Privacy Notice from time to time. This may be necessary, for example, if the law changes, or if we change our business in a way that affects personal data protection. Any changes will be made available on our website


Inclusivity and fairness are of paramount importance to us. Recruit UK embraces equality, diversity and inclusion and will seek to promote their benefits in all of its business activities. We will further develop our business culture to encourage, value and manage that belief. 

We intend to eliminate discrimination and encourage diversity amongst our workforce. Our aim is that our employees will be truly representative of all sections of society and each person feels respected and able to give their best.

Our policy purpose:

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Achieving an equal opportunities workplace is a collective task shared between the employer and all its staff. This policy and the rules contained in it, therefore, apply to all staff of the employer irrespective of seniority, tenure and working house, including all employees, directors,

consultants, trainees, homeworkers and fixed-term staff and any volunteers or interns (referred to as staff).

All staff have a personal responsibility to ensure compliance with this policy, to always treat colleagues with dignity, and not to discriminate against or harass other members of staff, visitors, clients, customers, suppliers and former Recruit UK, employees.

Managers and Directors must take all necessary steps to:

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Our Commitments

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  • Create a working environment free of bullying, harassment, victimisation, and unlawful discrimination, promoting dignity and respect for all, and where individual differences and the contributions of all staff are recognised and valued. This commitment includes training managers and all other employees about their rights and responsibilities under the equality, diversity, and inclusion policy. Responsibilities include staff conducting themselves to help the organisation provide equal opportunities in employment, and prevent bullying, harassment, victimisation, and unlawful discrimination. All staff should understand they, as well as their employer, can be held liable for acts of bullying, harassment, victimisation, and unlawful discrimination, in the course of their employment, against fellow employees, customers, suppliers and the public.
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How can I set up my own financial advice business?

Drawing inspiration from the franchise business model.

Gee Foottit, St. James’s Place Financial Adviser Academy No matter your background, seeking out an opportunity to build your own financial advice business can be a great move.

Are you seeking a career with purpose? Do you want greater control of your work-life balance? Would you like to increase your earnings? Or would you like an opportunity to build your own business with tangible value?

Well, look no further. A new career in financial advice could be for you.

As a trusted adviser, you’ll have the skills to help clients build a better future through effective financial planning. There is no ceiling on what you could achieve. But if you are new to the profession, where should you begin?

The financial advice market opportunity There is no doubting demand in the financial advice market.

As the number of people looking for trusted financial advice continues to increase, the number of qualified advisers is declining.

The average age of a financial adviser is 57 in the UK. As these individuals start to retire, there is a growing need for more qualified professionals.

At the same time, there is a growing number of ‘mass affluent’ individuals in the UK, defined as those with between £50,000 and £5 million of investable assets. This demographic is projected to rise from 11 million in 2021 to 13 million by 2024*.

This ‘advice gap’ is driving demand for more financial advisers and financial advice businesses. So, for aspiring entrepreneurs, this is an appealing proposition. And setting up your own business could be the way to go.

To start a career in financial advice, you need two key things:

  • The right qualifications 
  • The skills to provide insightful, goal-driven client advice

However, to start a financial advice business, you’ll need a little more.

Setting up your own financial advice business Setting up your own financial advice business offers a host of benefits. Not least, having the autonomy to grow a business that suits you. That could mean a different work-life balance, taking control of your future and enjoying uncapped earning potential once established.

But for a new financial advice business to succeed, you’ll also need an ecosystem of support, an already established marketplace and a proven business partner.

The finance industry is by no means easy to break into. In fact, it's the opposite. That’s due to regulatory complexity, qualification requirements, and high start-up costs.

It requires deep market expertise to be your own boss and set up in the finance industry. And in today's financial climate, finding the start-up capital can be a challenge.

Financial franchise opportunities One way of setting up a new business is by finding the right business partner. Like a franchise model, there are companies that can provide you with a platform to build your own advice business, with the support of an established brand.

The benefit of this approach is that you are replicating a tried and tested model, with the support of an experienced organisation that can help to minimise so many of the risks of starting out on your own.

Franchise owners enter into a business relationship with the franchisee. This relationship is mutually beneficial. They gain market share, brand exposure and a cut of the profits. You, as the franchise owner, are buying into the brand and everything that comes with it.

There's no need to tour investment banks looking for a cash injection, you can work directly with the franchisee to start your venture.

Franchising offers a ready-made business plan (or a means of skipping the start-up phase) with swift entry into a business in an established market.

This is a particularly popular model in retail and food and drink. But can it work for financial advice?

‘Franchising’ in financial advice At the St. James’s Place Financial Adviser Academy, we offer our own take on the franchising business model for those looking to set up their own financial advice business under the St. James’s Place brand.

Our concept is based on an ecosystem of support – both financial and practical – which empowers people to establish, grow and run a sustainable and profitable business. And, since launching the Academy programme in 2012, this model has helped over 1,000 people fulfil their entrepreneurial ambitions.

By joining the SJP Partnership, you will be able to set up your own advice business, but with the support of a FTSE100 company behind you. You’ll be provided with both initial and ongoing support to help you on your path to success.

Under the traditional model, there are two key barriers to many people setting up a new business as a franchise. The first is the up-front investment. The capital you need to invest to get started can be considerable, particularly in this specialist field of work. You'll need to invest in yourself, as well as your business.

With St. James’s Place there is no up-front investment needed. We provide a ‘business in a box’ with no start-up fee. In fact, there is financial support throughout because we recognise that all new businesses require investment. It’s what you would expect from an effective business partner.

It’s not just about the financial support either. People at the St. James’s Place Financial Adviser Academy, who go on to develop their own businesses, receive the equivalent of £65k of support in all its forms.

Unlike traditional franchise models, this is also an opportunity to build a business that is unique to you as part of a ready-made proposition. You don’t have to use or rely on the SJP brand. You can have your own name above the door, or even co-brand with us.

You can build a St. James's Place Partner business that reflects your values and approach, giving you ownership of your future. You have freedom to develop your own brand equity, but with the support of the wider SJP ecosystem. It's not just providing financial advice - you are really building something that’s yours.

Above all else, you are joining a community of peers, with 2,500 businesses forming the SJP Partnership. You are doing this for yourself, not by yourself.

Ongoing support What a first-time financial advice entrepreneur needs to succeed is practical and personal support to grow a sustainable and profitable business.

At the St. James’s Place Financial Adviser Academy, we offer mentorship, coaching, and development support, because we recognise that the foundations of success are built on the strength of long-term business relationships. We will help you retrain and achieve the qualification you need to become a successful adviser.

Our support proposition delivers a diverse range of services that aim to maximise financial advisers’ time so that they can focus on what they do best – supporting and advising their clients. From marketing, investment consultancy, technology, administration, HR and finance support, to technical compliance, we aim to deliver support that facilitates business growth, whilst delivering great outcomes to clients.

The St. James’s Place proposition for entrepreneurs As a graduate of the St. James’s Place Financial Adviser Academy, setting up your own practice is a viable and attractive proposition. With no up-front investment, the opportunity to develop your own brand, and the backing of a FTSE100 business, this opportunity can set you up for a rewarding career as a financial adviser.

Find out more about setting up your own financial advice business here .


Setting up a Financial Advisory Business

All you need to know about starting and running your business.

In this article

What is a Financial Advisory Business?

A financial advisor is a professional that helps you make financial decisions. They use their knowledge and expertise to create personalised financial plans (based on a client’s individual circumstances) that are designed to help them reach their financial goals. An advisor provides their clients with specialist, individualised advice on how best to manage their money and grow their finances.

A financial advisor doesn’t just create a one-time plan with no follow-up. Instead, they usually consult with the client on a regular basis, evaluating their current financial situation and adjusting their financial strategies and goals accordingly. A financial advisory business uses financial planning to help its clients build a better future and achieve a stronger financial position. Your business can choose to work with individual clients or business clients.

A financial plan created by a financial advisory business can include:

  • Saving: Different saving strategies depending on what your client is saving for (e.g. a house deposit), their time frame and the amount of money they need to save.
  • Budgeting: Providing different advice, tips and strategies on how to create a manageable and achievable budget that helps the client to meet both short-term and long-term financial goals.
  • Investments: Investment advice on different types of investments and which investment styles and level of risk will be best for their financial goals, risk tolerance level and risk capacity. A financial advisor helps their clients to choose an investment strategy that suits their needs and adjust their investments as needed.
  • Debt management: Including how to reduce and eliminate any debt they currently have and how to avoid getting into debt in the future.
  • Tax strategies: Including preparing tax returns, minimising tax reductions, ensuring the best capital gains, minimising taxes in retirement and making any relevant tax claims.
  • Account types: Which debit, credit and savings accounts best suit the client’s financial situation and financial goals.
  • Insurance (e.g. life insurance): Choosing the best insurance for the client’s budget.
  • A retirement plan: A savings and budgeting plan that is designed specifically for the client’s retirement. The plan will be based on their income, the number of years until their retirement and their retirement goals. When creating a plan, you should consider the best-case and worst-case retirement scenarios.
  • Estate planning: Including creating a will and planning the best ways to leave their estate (including property, money and valuables) to their beneficiaries.

Not only does a financial advisor help their clients to plan their finances and make the best financial decisions for their situation and future goals, but they also act as a financial educator. Rather than blindly following a financial advisor’s plan, the client should be educated in understanding a range of financial topics and what is involved and required to meet their financial goals.

In order to offer accurate and effective advice and create a personalised financial plan, a financial advisory business will need to gain a complete picture of a client’s assets, debts, incomes, expenses and liabilities. You will also need to understand any financial obligations (e.g. child support payments) and any future income sources and outgoings. You will also need a thorough understanding of the client’s current finances, including net worth, assets and liquid or working capital.

When starting up your financial advisory business, you may choose to offer a wide range of financial services. Alternatively, you may choose to specialise your business by focusing on a particular type of client or a particular type of financial product (e.g. stocks and bonds) or financial advice (e.g. offering retirement or investment advice).

There are many responsibilities associated with running a financial advisory business, including:

  • Conducting detailed reviews of a client’s financial situation, current incomings and outgoings and any debts.
  • Meeting clients and discussing their current finances and financial goals.
  • Analysing all available financial information, including financial goals, to create a customised plan designed to improve your client’s finances and in line with their individual requirements.
  • Helping your clients to implement financial strategies.
  • Completing risk analyses.
  • Determining the client’s risk file and setting up asset allocation in line with the client’s risk tolerance level and risk capacity.
  • Selecting financial products to fit the client’s risk file.
  • Providing clients with regular updates on their portfolios.
  • Providing unbiased and unrestricted advice that is in the client’s best interest and is suitable for the client.
  • Conducting industry research and researching the investment marketplace.
  • Conducting extensive research on different financial products and explaining key details and information to clients.
  • Providing clients with information on new and existing products and services.
  • Staying up to date with any changes in the industry, changes to legislation or industry trends and researching information from various reputable sources.
  • Reviewing a client’s changing needs and making any appropriate changes to their financial plan.
  • Communicating with other professionals, for example banks and mortgage advisors.
  • Producing accurate financial reports.
  • Negotiating with providers of financial products.
  • Complying with all legal requirements and guidelines.
  • Marketing and advertising.
  • Completing business and administrative tasks.
  • Handling payments and invoices.
  • Working to high ethical standards.

Starting up a financial advisory business can be both personally rewarding and financially lucrative. To help your business succeed, a strong level of expertise in the financial industry and a high level of knowledge of different financial products and a good understanding of investments are essential. You will also need strong research and analytical skills and the ability to collate and evaluate data and information to create a personalised financial plan.

You will also need excellent communication and interpersonal skills, the ability to establish positive relationships with your clients and the ability to explain complex information in a more simple and comprehensible way. You will need a combination of industry-specific and personal skills to help your clients in the most effective way.

Types of Customers

There are many different people who may use the services of a financial advisory business, including:

  • Someone who feels stressed, overwhelmed, confused or concerned about their financial situation.
  • Someone who wants to ensure they are on the correct financial track.
  • Someone who doesn’t have the knowledge, time or desire to manage their finances.
  • Someone with no investments or who has investments that are losing money.
  • Someone without an estate plan or a retirement plan.
  • Someone who is looking to build their finances and their financial future.
  • Someone who wants the tools and resources to become financially independent.
  • Banks, building societies, law firms, pension consultancies and investment companies.
  • Financial firms looking to build credibility and client loyalty.

In many cases, your clients will be individuals or businesses with specific financial needs.

Although the types of clients that use the services of a financial advisory business can be extremely varied, defining your target market more precisely makes it easier to focus on the specific clients who are most likely to use the services of your business and determine exactly where and how to market your business.

Some of the factors that can determine your typical client base include:

The type of financial advice you specialise in

This is the most important factor in determining your typical client base. You may choose to specialise your business in a specific type of financial advice (such as retirement planning or managing debt) or a particular type of financial product (such as investment accounts or stocks). Alternatively, you may choose not to specialise your business and instead offer a wide range of financial services to different clients. Consider who is most likely to use different financial services and how this could affect your typical client base.

Your skills, training, qualifications and areas of expertise

Because there are a lot of financial advisors in operation and a high level of knowledge, skill and trust is required for this role, many potential clients will look closely at your qualifications and training, your experience, your level and area of expertise and the level of knowledge you possess. Financial advisors who are highly trained, skilled and experienced can usually charge a higher rate for their services and may be more likely to attract higher-value clients with a higher net worth and more ambitious financial goals.

How and where you offer your services

Also known as your primary operating strategy, this is another important factor in determining the types of clients that will use your services. For example, you may offer your services online or in person. Your primary operating strategy can significantly impact the types of customers that use your services.

Your pricing

Clients can typically be separated into three pricing categories:

  • Budget: Price is the most important factor for this type of client. They will be looking for the lowest-price advisor and are less likely to look at your qualifications, experience and reputation.
  • Mid-range: This type of client is looking for a combination of quality and affordability. Although price is important to them, it is not the most significant factor.
  • High-end: These clients are willing to pay higher prices for the highest qualified, most experienced and most highly skilled financial advisors. They are usually higher-value clients with more complex finances.

Your reputation

This is another important factor that many clients will look at when choosing a financial advisory business. They may consider your reputation, look at your customer reviews or decide based on recommendations from others.

Your reputation may be based on multiple factors, including:

  • The financial plans you create.
  • How personalised your service is.
  • The improvements the client sees in their finances.
  • Your knowledge, experience, qualifications and skills.
  • Your interpersonal skills, i.e. how you interact and communicate with your clients.

Financial Advisor Cartoon

Equipment You Will Need

The equipment requirements for a financial advisory business can vary, depending on whether you operate your business from an office or from your home. If you hire employees to work for your business, you will need to purchase more equipment.

You may already have some of the equipment required to run your business. If you decide to use your existing equipment, ensure it is in good working condition.

Below is a list of equipment typically required by a financial advisor.

Reliable laptops or desktop computers

You will need a high-specification, reliable laptop or computer that can handle the amount of time you will be using it each day. If you plan to work from different locations or take your computer to in-person meetings with you, you will need a laptop, rather than a desktop. Your computer will be an important tool in your financial advisory business as you will use it for tasks such as researching investment options, creating financial plans, investing money and tracking finances. Ensuring your laptop is compatible with a variety of software and computer programs is essential. Your laptop will also need an updated operating system. Each employee that works for your business will need their own computer.

A website is a way for potential clients to find your business and see your experience, qualifications, skills and areas of expertise. Your website can act as your online CV, showcasing some of your success stories or with information about your previous clients. Ensure your website includes your contact information so potential clients can connect with you. You should also include an About page, a contact page and a blog (to demonstrate your expertise in financial advising).

Client Relationship Management (CRM) software

CRMs automate work such as tracking clients’ financial goals, keeping notes and tracking your clients’ needs. You can manage multiple clients at one time and automate the documentation work for each client. CRMs can also be beneficial to your clients, as it allows them to track their wealth management, investment details and expenses. Choose a CRM that has data security, risk management features, automated services and client user features.

Account aggregation software

Account aggregation software helps you access a complete picture of your clients’ finances. This can be particularly helpful if a client fails to report all of their accounts and assets (for example, if they forget about a retirement account or stocks and bonds). This software helps your clients to manage their accounts more effectively.

Retirement calculators

A retirement calculator can help to calculate a client’s retirement savings, analyse their accounts, calculate how long their pension fund is likely to last and calculate how much of their savings or pension funds will be available to them each week and month of their retirement. The calculator allows you to input their pension pot balance, their yearly spending and the minimum time they expect to access their pension. This allows the client to see how far their pension will stretch and how much additional funds they require.

Trading software

If you offer investments as part of your financial advisory service and invest or trade in stocks, bonds or cryptocurrency, you will require trading software to allow you to make investments and build your clients’ portfolios. You can also use the software to rebalance their portfolios and make withdrawals.

Performance reporting software

This type of software is beneficial as it shows your clients how their investment portfolio is performing over time. It is an easy way for you to show your clients how their finances are improving and can form a basis for discussions regarding changing needs and strategies.

Business software

Business software can have a variety of uses, including:

  • Organising and managing daily operations.
  • Managing payments and expenditures.
  • Managing and tracking donations.
  • Accessing client information.
  • As a payroll tool.
  • Creating, tracking and sending invoices.
  • Scheduling appointments and meetings.

Depending on the business software you opt for, you could also have tools for increasing your revenue, including marketing tools. Many types of business software come with a mobile application for easy access on the go.

Business phones

Business phones are essential, as you will be regularly speaking on the phone with your clients and with individuals and businesses you are working with. If you have an office, you may opt for landline telephones, and you will need one telephone for each employee. However, you may also opt for business smartphones, which will allow you to keep in contact with clients on the go and give you constant access to your emails.

Video conferencing software

Even if you offer in-person consultations and meetings, some clients may request video conferencing, particularly for updates and follow-up meetings. When choosing video conferencing software, look for one that offers a screen sharing and collaboration feature and that has high video quality.

A headset with a microphone

If you do not use a headset with an attached microphone when making phone calls, the quality of your sound will be significantly impacted. Your phone or computer microphone can pick up background noises, which can be distracting to your clients and can create an echoing sound. A headset with a microphone results in higher-quality sound for your customers and enables you to hear your meetings and phone calls more effectively. A lack of background noise can also help clients to feel more secure discussing financial information, as they will not feel like they are being overheard. You can opt for a wireless or wired headset.

Reliable and high-speed Wi-Fi

Because you will be running your business from your office, you will need to ensure your Wi-Fi is reliable and high-speed. Video calls and online research require a strong and consistent connection, and you must ensure your Wi-Fi doesn’t cut out in the middle of a meeting or when investing money. Ensure your Wi-Fi has a minimum connection speed of 20 megabytes per second (Mbps).

You will need a reliable, high-quality printer for important business tasks, such as printing letters and contracts for your clients and printing your records. You could also opt for a printer that comes with an in-built scanner.

As well as your printer, you will also need:

  • High-quality printing paper.
  • Black and coloured ink.

A secure storage system

You will likely amass a lot of resources and research that is vital to your business. You will work with the majority of your clients on a long-term basis, meaning you will accrue a lot of resources and information that is essential to their financial plan. If your laptop breaks or contracts a virus, you may lose everything you have stored on your device. Investing in secure Cloud storage that is password protected and encrypted ensures everything is backed up and protected in the event of a technological issue. A secure storage system also helps to protect your clients’ personal data and financial information.

Scheduling tool or software

Scheduling tools allow you and your clients to make appointments and meetings without needing to waste time trying to find an available date and time. The software links to your calendar and recognises your availability. If a client books a meeting with you via the software, you will receive an automatic confirmation email and the meeting will appear in your calendar.

An email service

Setting up your own email service using your own domain may be beneficial as your business grows. A business domain can make your business seem more professional and official. Using a public email domain such as @google or @hotmail can look less professional compared to using your own business domain, for example, [email protected]. You will need to make sure your email service is fully secure and encrypted and abides by email security policies in the UK.

Email marketing automation software

An email marketing tool can be used to improve your relationship with your clients, for example by automatically sending company updates and holiday celebrations (e.g. Merry Christmas or Happy New Year emails). Email software can also schedule reminder emails, for example reminding clients about an upcoming meeting. Some email marketing tools can also be used to turn prospective clients into actual clients.

A Microsoft Office subscription

You can utilise Microsoft Office for a variety of tasks, such as tracking finances in Excel, preparing documents and letters in Word and accessing Teams or OneDrive. You can also share documents with your clients through Microsoft, making it easier to communicate without needing to schedule a meeting.

An Adobe Acrobat subscription

This is another popular software choice for financial advisors. If any of your clients work on PDF documents, Adobe Acrobat allows you to annotate the PDFs, including making comments, highlighting content and adding notes.

Invoice software

You will likely need to issue invoices to your clients and keep them for your own records (and for when you submit your taxes). Digital invoice software allows you to create electronic invoices, send them to your clients and store them safely.

Electronic signature tool

To create a faster and more streamlined service, you will need an electronic signature (e-sign) tool. Having this tool will save you a significant amount of time compared to physically mailing each document when a signature is required. An e-sign tool allows you to email documents that need signing to your clients and receive an electronic signature immediately. Electronic signatures are legally recognised in the UK.

A payment system

The type of payment system you require will depend on your primary payment strategy. For example, if you accept online payments, you may require an online payment system or a way to track payments to your business bank account.

Office furniture

You will need to furnish your office with sturdy, high-quality furniture and equipment. The amount of furniture you require will depend on the size of your office and the number of employees you hire. Ensure the furniture is an appropriate height and doesn’t require you to strain your neck or back.

Some of the furniture you may require includes:

  • Office desks.
  • Ergonomic office chairs.
  • Secure filing cabinets.
  • Shelving units or storage cabinets.
  • A paper shredder.
  • Lamps and lights.
  • Long tables (for meetings).
  • A kettle and coffee machine.
  • Kitchen equipment for your employees’ break times (e.g. fridge, microwave).

Several pieces of stationery can be beneficial to your business and can make it easier for you to make notes and plan meetings.

Some stationery you can purchase includes:

  • Pens and pencils.
  • Paper and notepads.
  • A diary and/or calendar.
  • Highlighters.
  • Post-it notes.
  • Envelopes and stamps.

Business cards

Business cards are an important marketing tool and can be given to new or existing clients. Your business cards should include your business name, contact information, location and the types of services you offer.

A CCTV system

Because you will be storing expensive equipment and sensitive information, CCTV can protect your business from potential break-ins and theft. CCTV can also protect your business in the event of an accident, an incident or an allegation. You can choose the specification of the equipment and how many cameras you require.

Cleaning equipment

You will need to ensure your premises is clean and hygienic and complies with health and safety legislation, particularly if clients or employees will be visiting your premises. Some cleaning equipment you may require includes a sweeping brush, vacuum cleaner, mop, cloths, disinfectant, antibacterial and cleaning products.

Financial Advisor With Clients

Typical Costs

When you are setting up your financial advisory business, an important consideration you will need to make is your expected start-up costs and running costs. Calculating your expected costs allows you to determine your initial investment requirements, your pricing strategy and your income goals.

There are multiple costs associated with setting up and running this type of business. Some of these costs will be one-off initial costs that you will need to pay when you are setting up your business. Other costs will be ongoing costs you will need to pay regularly – usually weekly, monthly, quarterly or annually.

Although the costs can vary depending on the type of financial advisory business you set up, some of the typical costs you can expect are:

Your business premises

If you opt to set up an office for your financial advisory business, your premises will likely be your biggest expenditure. You will need to rent your premises on a monthly or annual basis. Rental prices can vary significantly, depending on the location and the size of the premises. City centre locations and newly built premises usually have the highest rental costs. Rental costs are often calculated per square metre and can range significantly, from £500 to £15,000 per square metre annually. Your rental costs may also be higher if you are renting an already established or equipped office. Alternatively, you could opt to purchase your premises upfront or take out a mortgage.

Refurbishment and installation costs

Unless your premises previously operated as an office, you will need to refurbish or convert your premises to install the equipment you need for your business and to make your premises fit for purpose. You may be able to do much of the work yourself, although you may need to hire professionals for jobs such as installing a bathroom and installing equipment and furniture. Refurbishment and installation costs can start at as little as £500, depending on the scale of work required.

Your equipment is an important purchase. Although equipment costs are not usually high for a financial advisor, ensuring you have the correct equipment is essential. Consult the list above to determine the type of equipment you require. The cost of your equipment can vary significantly, depending on the specification of your equipment and how much equipment you need. The bigger your premises is and the more employees you hire, the more equipment you will likely require. You may opt to purchase less equipment initially and then expand your equipment as your business grows. Equipment for a financial advisory business typically costs between £2,000 and £35,000.

Maintaining, repairing and replacing equipment

Repairs, maintenance and replacements are ongoing costs you will need to factor into your budget. Although some of your equipment will come with warranties or guarantees, repairs and replacements are inevitable because much of your equipment will experience frequent usage and technology, such as laptops and phones, generally only has a lifespan of a couple of years. Maintaining equipment and ensuring it is used correctly can extend its life, but potential repairs and replacements should still be factored into your budget.

Monthly and annual equipment costs and subscriptions

Your monthly and annual subscription costs could include the various pieces of software and business tools you require, your Wi-Fi, website, email service and secure storage. Depending on which subscriptions you require and the specifications of the ones you choose, expect to pay between £50 and £250 per month.

Your business website

A business website is an essential advertising tool, as it allows potential clients to find your business online. You should ensure your website is attractive to customers and use search engine optimisation (SEO) so that your website ranks highly on search engines, such as Google. Your website will need regular monitoring, updating and upgrading. You also need to make sure your website is secure, particularly if you will be collecting any customer information or banking details. You may choose to set up and run your website yourself or hire someone to do this for you. You can expect to pay between £20 and £100 per hour for someone to set up and run your website.

You may choose to run a business where you are the sole financial advisor or hire other advisors or administrative staff (particularly as your business grows). If you hire employees on a permanent basis, you will need to pay them at least the national minimum wage and account for other expenses such as holiday pay, sick pay and maternity/paternity pay. Keep in mind that the more highly qualified and experienced your staff are, the higher wage they will expect.

Branding is an essential expenditure for your business. It can help you to establish your business’s identity and set you apart from your competition. Branding could include creating your business’s visual identity, a logo and your business name, and creating your business website. You can hire a professional to help you with branding or do some of the work yourself. Branding can cost between £500 and £10,000, depending on the amount of branding you require.

Advertising and marketing

To ensure your business attracts clients and creates maximum profits, you will need to invest in advertising and marketing. It is recommended that you spend between 1%-3% of your annual turnover on marketing. For example, if your annual turnover (or your desired annual turnover) is £150,000, you should spend between £1,500 and £3,000 on advertising and marketing. You may need to invest more money when you initially set up your business or when you are trying to grow your business.

Business insurance

Insurance is recommended to help protect your business, your equipment and your clients. Some types of coverage are mandatory, whereas others are optional.

Some insurance coverage you could opt for includes:

  • Public Liability Insurance.
  • Professional Indemnity Insurance.
  • Professional Cyber Insurance.
  • Employers’ Liability Insurance (if relevant).
  • Business Equipment Cover.
  • Legal Expenses.
  • Cyber Liability Insurance.
  • Business Interruption Cover.

Insurance prices can vary significantly, depending on your insurance provider and the level of coverage you require. Prices typically start at £10 per month.

Typical Pricing for Customers

Once you have calculated the expected costs associated with setting up and running your business, you can then create your pricing strategy.

Your pricing strategy may depend on your qualifications and experience as a financial advisor.

For example, financial advisors with different qualifications and experience levels charge significantly different prices for their services:

  • Trainee Financial Advisor.
  • Qualified Financial Advisor.
  • Senior Financial Advisor.
  • Wealth Management.

Your rates will rise as you move through the various levels of financial advisory:

Financial advisors typically charge fees in different ways, including:

  • Hourly: Hourly fees can vary, from £50 to £400 per hour.
  • A set fee: This will be a set fee for the entire cost of the job. The price will be based on the complexity of the job, the amount of money that is involved (e.g. the investments) and the time it will take.
  • A monthly fee: This could be a flat fee or based on the amount of work that is required from month to month.
  • An ongoing fee: You can only charge an ongoing fee if you are providing an ongoing service.
  • A percentage: Some financial advisors are paid a percentage of the money the client plans to invest or a percentage of their returns.

Safely Running a Financial Advisory Business

Safe practices in your financial advisory business can help to protect you, your business, your clients and your client’s finances.

Some ways you can safely operate your business include:

Perform risk analysis

Financial risk analysis assesses, identifies and analyses the risks associated with different financial decisions and different types of investments. Risk analysis can help you to identify future events that could result in you or your client losing money on an asset or investment. Risk analysis can also be beneficial in ensuring any investments you make are in line with your client’s risk tolerance and risk capacity levels.

Keep detailed and accurate records

You will need to keep detailed records of every client you work with and every financial plan you create, including recording any interactions and keeping records of payments and investments. This is necessary to protect both you and your clients. You should also keep detailed records to prove that you are complying with all legal guidelines.

Adhere to an ethical code

Ensuring you implement and follow ethical practices at all times is essential. An ethical code helps to protect the well-being of your clients and ensures good practices at all times. An ethical code may be provided by your registered professional body (e.g. the Chartered Banker Institute), or you can create your own ethical code.

Create client contracts

Although contracts are not a legal requirement, creating a legally enforceable contract with your clients ensures that any terms are laid out straight away and both parties are aware of any expectations and timeframes and any payment details. Contracts also help to protect you in the event of a dispute and make your business appear more professional.

Conduct risk assessments

Risk assessments are only a legal requirement if your business has five or more employees. If you have fewer employees, risk assessments are recommended to ensure safe practices in your business.

When conducting risk assessments, you should:

  • Identify hazards.
  • Determine who could be at risk.
  • Evaluate the potential risks.
  • Implement safety measures.
  • Record the results of the risk assessment.
  • Review the risk assessment on a regular basis.

Financial Advisory Business

Use two-factor authentication for client records and information

All your personal and business passwords should be set up with two-factor authentication. This means you will need to prove your identity in two ways, such as with your usual password and with a code that is sent to your registered mobile number. This adds an extra layer of security to your accounts.

Properly maintain and set up equipment

If you open a financial advisory office, you must ensure any equipment is properly maintained, correctly set up and safe to use. You must protect yourself, your employees and your clients from accidents or injuries caused by equipment. You should also perform regular equipment inspections to ensure your equipment’s safety and help extend the lifespan of your equipment. Maintenance includes cleaning equipment regularly and checking it is functioning correctly.

Install anti-virus software

If you use a computer or laptop in your business, anti-virus software can detect and remove malicious codes and intrusions on your computer or laptop. This can protect you and your business against viruses and malware. If your laptop becomes infected with a virus, this can cause irreparable damage to your equipment, can delete your computer’s data and cause you to lose money and business. A virus on your laptop could also be sent to your clients via email which could affect your business’s reputation. Anti-virus software should be installed on all of your devices and your Wi-Fi.

Install a firewall on all of your devices

Any information kept on your devices is better protected by a firewall. It shields your device and accounts from unauthorised access and notifies you automatically if someone tries to access your information. While some laptops and desktops already have a firewall installed, others could require you to install or activate one yourself.

Install anti-spyware software

Without your knowledge, spyware can track and gather all of the sensitive data you keep on your computer or other devices. Some spyware varieties can even find your passwords and access bank data. To safeguard your business and your clients, make sure that anti-spyware software is installed on all of your devices.

Secure your Wi-Fi network

It isn’t recommended to set up your Wi-Fi and enter the default password. Make sure your Wi-Fi network is encrypted and that you use a strong password to prevent unauthorised access. This helps to protect your devices and prevent anyone from accessing any client or financial information.

Legal Requirements

The financial advisory industry is highly regulated, with multiple regulations you must ensure you comply with.

Some of the legal requirements you should be aware of include:

Complete specialist qualifications

Running a financial advisory business can be very difficult, with extensive regulations and legal requirements you need to be aware of and a high level of knowledge required. For this reason, financial advisors are required to undergo training and gain qualifications. To run your business, you will need a Level 4 qualification in Financial Advice that is recognised by the Financial Conduct Authority (FCA).

Some qualifications you could opt for include:

  • Diploma in Professional Financial Advice (Chartered Banker Institute).
  • Diploma in Investment Advice (Chartered Institute for Securities and Investment).
  • Diploma in Regulated Financial Planning (Chartered Insurance Institute).
  • Diploma in Professional Financial Advice.

Until you have achieved a suitable qualification, you are not authorised to offer financial advice. If you want to offer advice on mortgages, equity, stocks or shares, you may need to take additional examinations and gain further qualifications.

Ensure your business is FCA regulated

You cannot run your business or work as a financial advisor unless you meet the requirements of the Financial Conduct Authority (FCA). You will need to submit an application to become FCA regulated. You will then be assigned a case officer who will assess whether you meet the FCA requirements. Any senior figures in your business will also need to be assessed by the FCA. If you are operating as an independent financial advisor, you may not need a licence to operate. However, you will still need to be authorised by the FCA.

Comply with the Financial Services and Markets Act 2000

The Financial Services and Markets Act is the legislation that permits financial advisors to carry out financial activities. Under this Act, you are not permitted to carry out any regulated activities or promote investments if you are not authorised by the FCA.

Regulated activities include:

  • Investments of a specified kind, including effecting and carrying out contracts of insurance, arranging deals in investments and organising trading.
  • Managing investments.
  • A specified activity carried out in relation to a property.
  • Requesting information about a person’s financial standing, setting or administering a benchmark.
  • Accepting deposits.
  • Establishing personal pension schemes.
  • Activities related to home finance, e.g. mortgages.

It also sets out arrangements for the regulation of financial promotion.

Register as an approved person

To operate as a financial advisor you will need to register as an approved person with the Financial Conduct Authority (FCA). As an approved person, you will be approved to do activities known as controlled functions.

To qualify as an approved person, the FCA will look for:

  • Integrity and reputation.
  • Competence and capability.
  • Financial soundness.

Ensure client confidentiality

You will have access to a lot of personal and sensitive information, including a client’s financial status. Client confidentiality is required of all financial advisors (except in exceptional circumstances, such as if you believe a crime has been committed). You should also ensure that no person who is not authorised is able to access a client’s data.

Some ways you can protect your client’s confidentiality include:

  • Ensure your premises is physically secured and only allow individuals who are authorised or able to enter your premises or enter specific areas.
  • Control the flow of data.
  • Use a paper shredder.
  • Don’t release a client’s data unless you are legally required to do so (e.g. because of a court order).
  • Use secure payment methods.

Be aware of the legal limits to confidentiality

Because you will have access to a client’s financial information and personal data, you may discover information that it is your legal duty to report.

This can include illegal activities, such as:

  • Drug trafficking.
  • Money laundering.
  • Child, elder or dependent abuse.

You should contact the relevant authorities if you become aware of any activities that could be causing someone harm or that are considered a crime.

Comply with the Consumer Rights Act 2015

The Consumer Rights Act is designed to protect clients from sub-standard work and overpriced services. It covers the selling, terms and conditions and supply of services (including financial services) to ensure consumers are better informed and more well-protected.

Under this Act, your clients have the right to:

  • Request that substandard work is redone or receive a price reduction.
  • Challenge unfair small-print terms, conditions and costs.
  • Reject work if the tradesperson (you) used their one chance to redo the service ineffectively.

Comply with consumer protection legislation

Legislation is in place that is designed to protect the rights of individuals and to prevent businesses (including those providing a financial service) from using unfair practices.

Consumer protection legislation you must ensure you comply with includes:

  • You cannot make false claims about yourself or the service you provide.
  • The service you provide must be up to the expected standard.
  • Services must be performed with reasonable care and skill.

Comply with invoice or receipt guidelines

You may make it standard that you send all of your clients an e-receipt or invoice once they make a payment to your business. Even if you don’t make it standard, some clients will request receipts or invoices.

You must include certain information in any invoices you create, such as:

  • The word ‘invoice’ and a unique invoice number.
  • Your business name and address.
  • The client’s name and address.
  • A brief description of your work.
  • The total you are charging the client and when the payment is due.
  • The payment method.

Ensure your website complies with the guidelines

If you set up a business website, there are several guidelines you need to comply with, including:

  • Privacy policies.
  • Cookie legislation
  • Service descriptions.

Under the Equality Act (2010) , all websites in the UK must be accessible to people with disabilities. If you set up a business website, you must make reasonable adjustments to your website to ensure it is accessible, for example having text-only versions of each page so that they can be read by text converters.

Comply with the General Data Protection Regulations (GDPR ) and the Data Protection Act (DPA)

You must comply with both pieces of legislation when storing or sharing personal information, such as your clients’ personal information, financial information, contact details and banking information. You must also apply for a Notification to Process Personal Data Licence. You will also need to apply for a licence with the Information Commissioner’s Office and renew your registration every year.

Comply with employment legislation

If you employ any staff on a permanent basis, you must ensure you follow employment legislation, including the Employment Rights Act (1996 ) and the National Minimum Wage Act (1998) . You must also comply with legislation relating to recruitment, working hours, sickness, discrimination, dismissals, and maternity or paternity pay.

Register your business

Your business must be registered with HMRC before you begin operating. You can choose to register as a sole trader or as a limited company. You will also need to register your business name and any other relevant information.

Register for self-assessment tax

This allows you to calculate and pay your own taxes each year. You will need to track your finances every month and submit any expenses as part of your tax assessment.

As part of your tax responsibilities, you must:

  • Record all forms of income and expenses.
  • Complete an annual self-assessment tax return.
  • Register for VAT if you earn above the threshold (currently £85,000).
  • Pay National Insurance contributions.
  • Keep a record of your business accounts for the previous five years.

Premises Legal Requirements

If you run your financial advisory business from a business location, there are certain legal requirements you must comply with in relation to your premises, particularly if employees, clients or members of the public visit your premises.

Comply with fire regulations

You must ensure fire safety measures are implemented on-site. There are multiple fire regulations you must ensure you comply with.

For example:

  • Perform a fire risk assessment.
  • Comply with the Regulatory Reform (Fire Safety) Order 2005 .
  • Implement any necessary fire safety measures.
  • Implement emergency procedures and ensure these are clearly displayed on your premises.

Comply with the Provision and Use of Work Equipment Regulations (PUWER) 1998

These regulations specify that any equipment you use in your business must be fit for purpose and maintained and inspected regularly. Health and safety risks should be minimised to an acceptable level, and you must ensure that you have the correct knowledge and training to use the equipment and that protective measures are put into place. You must also ensure the equipment is used under appropriate conditions.

Comply with the Electricity at Work Regulations (1989)

The Electricity at Work Regulations state that any workplaces that use electricals must construct electrical systems in a way that prevents danger, maintain electrical systems to ensure they are safe, ensure electrical equipment is checked by a competent person annually and conduct Portable Appliance Tests (PAT). This includes any electrical equipment such as computers, chargers and printers.

Comply with the Health and Safety at Work Act 1974

The Health and Safety at Work Act lays out the duties of all employers in the UK in relation to the health, safety and welfare of everyone in your workplace. As the business owner, you will be responsible for protecting the health and safety of your employees and any clients or visitors to your business.

Prepare a health and safety policy

The law states that every business in the UK must have a specific policy for managing health and safety. Your policy should state exactly how you will manage health and safety in your business, who is responsible for specific tasks and how and when these tasks are completed.

Finance Advisory Business

Positives of Owning a Financial Advisory Business

Running a financial advisory business can be extremely rewarding in many ways.

Some of the main positives associated with this type of business include:

High-income potential

Starting up a financial advisory business can be financially lucrative, with a significantly higher-than-average income. The income potential for a financial advisory business is unlimited, particularly if you work with high-value clients. As your business grows and you develop a good reputation, you will see your profits grow. You can charge higher prices for your services and expand your business to increase your profits. Financial advisory can have a high-income potential and your profit margins are likely to be high. With a good business plan and strategy for growth, your business could have unlimited income potential.

Make a real difference to your clients

Your business can make a significant difference to your clients’ finances and their financial future. You can help your clients achieve their financial goals and manage their debts, increase their investments, improve their long-term finances and accomplish something they’ve been aiming for, such as buying a house or saving for their family. Knowing that you have truly helped your clients can be very rewarding.

Strong prospects

The financial services industry is showing strong industry growth, with high demand for a wide range of financial services. As well as running your business, you will also have the opportunity to branch out into different areas of financial advisory and expand your skills and your business prospects. The skills you learn in your business are also transferrable to other financial arenas.

Capitalise on your qualifications, experience, knowledge and interests

Because you can choose your speciality, you can opt to focus on a specific type of financial advisory or specific financial products that you are knowledgeable about and interested in. Not only will this make your work more interesting and enjoyable, but clients are also usually willing to pay extra if you have special qualifications and experience in specific areas of the financial industry.

Varied and interesting

The financial industry is fast-paced and sometimes unpredictable. You will be constantly working on new tasks, with different clients and significantly different financial goals and plans. There are constant opportunities to learn new things and evolve and grow as a financial advisor. Your work will be varied, interesting and fast-paced, leaving little time for you to become bored or complacent.

Build business connections

As part of your business, there will be regular opportunities to network with high-profile individuals and businesses and build solid business connections with other people working in the financial industry and potential clients. Connecting with like-minded individuals can not only be personally rewarding, but it can also help you to advance your skills and your business and develop your professional network.

Specialise your business

It can be financially rewarding to specialise your business in a particular type of financial advisory or a particular type of client. This enables you to learn specialist knowledge and skills and develop your expertise, which can help you to grow your business’s reputation. Being seen as an expert financial advisor in a particular field can help your business to be more attractive to potential clients and can allow you to charge a higher rate.

Opportunities for growth

As your business becomes more successful, you may hire other financial advisors, allowing you to expand your client base and grow your business. Having more people working for your business allows you to take on more clients and maximise your profits. A financial advisor business is highly scalable, with great opportunities for growth. Because you will already have a solid business plan, a good reputation and established practices, you can easily adapt your business model for expansion.

A scalable business

A financial advisory business can have a simple business model, making it easy to set up this type of business. If you want to grow your business, this type of business is highly scalable, as you will already have established strong business relationships with clients, your business set-up and operating processes will be easy to replicate, and you will already have a solid business plan. There is always demand for financial advisors, giving your business great opportunities for growth.

Choose your clients

As the business owner, you will have complete control over the clients you accept and the types of jobs you work on. You can work in areas you are interested in and choose your clients based on your own skill and interests. You can choose not to work with difficult clients and can turn down or accept as many jobs as you choose. Being aware of your target market and the types of clients that are going to be most beneficial to your business will enable you to maximise your opportunities. You can opt to only work with clients that you think will benefit your business growth, pay a higher rate or that you think you will enjoy working with

Client loyalty and recommendations

You can gain a lot of business and maximise your profits through client loyalty. If your clients have a good experience with your business and see an improvement in their finances, they are more likely to use your business on a long-term basis. Customer loyalty can help to increase your profits and grow your business reputation. Loyal clients may also recommend your services to other individuals or businesses, helping you to grow your profits.

Create a positive work environment

As the business owner, you can create a healthy work culture and a positive work environment that can make it more enjoyable for you and your employees to come to work every day and can help you to complete work more efficiently. Different financial advisors will bring different skills, knowledge and experience to your business which can be beneficial to your business.

Choose how to run your business

You can choose how you operate your business, the clients you work with, and your rate of pay. As the business owner, you can decide the best way to run your business.

Be your own boss

Being your own boss gives you the opportunity to control the growth of your business, manage your own time, and gain more self-confidence and job satisfaction. Owning your own financial advisory business also means that all your profits will belong to you, and you will be in control of creating your ideal business.

Clients having a Meeting with a Financial Advisor

Negatives of Owning a Financial Advisory Business

Although owning a financial advisory business can be rewarding in many ways, there are some potentially negative aspects to this type of business you should be aware of, including:

Difficult to set up your business

The financial advisory industry has stringent regulations and strict training and qualification requirements. You will likely need to apply for several licences and adhere to laws and regulations closely in order to qualify as a financial advisor and be able to set up a business. It can be a long and arduous process and can take several years of studying for qualifications and gaining experience until you are qualified enough to set up your business.

Strict industry regulations and financial rules

The financial industry is highly regulated with strict laws and legal guidelines. There are many different pieces of legislation and legal guidelines you will need to comply with. Not only can this be complicated and time-consuming, but any non-compliance (even if this is accidental) can be punished with a fine or the forced closure of your business. Some types of legislation also require you to follow very specific procedures, which can be costly and arduous. This can be very stressful.

Accountability and liability

This industry is highly regulated with a large number of laws and regulations you must be aware of. You need to ensure you follow all policies and procedures, particularly those relating to health and safety. Not only can it be time-consuming and stressful to ensure compliance, but failure to comply, even unintentionally, could have serious consequences. Additionally, if a client loses a large amount of money while following your financial plan and implementing your strategies, they may hold your business accountable.

High start-up costs

A financial advisory business has a lot of associated costs including the cost of your premises, staff and equipment. The high initial investment that is required can make it more difficult for you to start up your business yourself. Not only does this mean you may need to source outside investment, but it also makes your business high risk. Having a large initial investment also means it will take longer before you begin turning a profit. You will also need to ensure consistent profits to cover your monthly costs, which can also be high.

Long working hours

Many financial advisors find that their working hours don’t follow the traditional 9-5 working hours. Working in a high-pressure, fast-paced work environment means you often can’t predict when your work will be finished and when you can clock off for the day. Long working hours can not only be physically and mentally exhausting but can also negatively affect your personal life.

Difficult clients

As part of your job, you will have to work closely with your clients. Because you are helping them to manage their money and build their finances, this can be very stressful for your clients, particularly when they are making difficult decisions, such as making investments. The client’s stress can affect you, particularly if emotions are running high. Some clients can also be demanding, for example by demanding a lot of your time and energy. Difficult and demanding clients can take a lot of your time and have a negative effect on your business.

An unpredictable economy

The financial industry can be very unpredictable in nature, particularly with the ever-changing economy and periods of recession. An unpredictable economy can be difficult to manage, particularly if a client sees their portfolio decreasing in value or see their debts increasing because of the rising cost of living. No matter how good you are at your job, you cannot plan for every eventuality and many of your clients (particularly those with less financial knowledge) may not understand the unpredictability of the financial world and may blame you for any negative changes.

A cyclical industry

This industry can be cyclical, which means that when the economy is strong, financial advisors are in high demand and many individuals and businesses will request your services. However, during economic downcycles, your business will likely see a downturn in business. Not only can this make your business high risk, but it can also affect your profits, particularly if you are responsible for paying for a business premises and your employees’ wages.

High stress

The financial services industry is often fast-paced, competitive and high stress. Running this type of business can be stress-inducing, not only because you will have a high level of responsibility but also because you will need to fulfil the demands of your clients and meet targets.

Constant education and research are required

Even if you are an experienced financial advisor, you will still need to conduct extensive research and stay up to date with methodologies, regulations and industry information. Failing to keep up to date can result in failed investments, mismanaged money and unhappy clients, which can be detrimental to your business.

It can be physically demanding

Many people think this type of career is easy and results in no physical stress, as you will be sitting down for much of the day. However, several physical concerns could be attached to an office job, for example:

  • Eye strain.
  • Back and neck pain and strain.
  • Musculoskeletal pain and strain.
  • Reduced cardiovascular fitness.

It can be difficult to grow your client base

Many individuals and businesses who are looking for financial advice will choose a well-established business with proven success or an advisor that has been recommended to them. This can make it difficult to grow your client base, particularly because there are already a lot of well-established financial advisors operating. Difficulties in growing your client base will result in a reduced income and could affect your ability to continue pursuing your business.

Business can be inconsistent

You may have times when your books are full, and you are working with multiple clients at once, and other times when you have a smaller client base and lots of available time. It can be difficult to plan your finances, predict your profits and decide your working hours when your business is inconsistent. There could be times when you are less busy, and this can have a significant impact on your profits.

It can be time-consuming

You will have a lot of responsibilities, including meeting with clients, researching, planning and preparing, managing accounts, marketing and advertising and the tasks associated with the day-to-day running of your business. This can be time-consuming and stress-inducing, particularly when you are trying to grow your business. You will also have the additional responsibility of keeping your clients happy and ensuring your business succeeds.

Staffing challenges

There are many staffing challenges you could face, such as a lack of staff motivation, client complaints about staff and staff not fulfilling their expected duties. It can sometimes be difficult to create and maintain a positive work environment when working in such a stressful industry. You will also have lots of responsibilities related to your staff, such as hiring staff, staff training, day-to-day management, staff rotas and staff payroll. While your business and your profits are growing, you may have to undertake many of these responsibilities yourself.

No benefits

As you are self-employed, you won’t receive benefits such as pension contributions. You will also be responsible for doing your own taxes and organising your National Insurance contributions. You will also have a lack of job security.

Your business could fail

Starting up your own business can be risky. Many new businesses fail which could result in you losing money or getting into debt. Your business could fail for several reasons, such as high local competition, an ineffective business plan or if there is another recession or a period of financial difficulty.

Planning Your Financial Advisory Business

If you are considering starting up a financial advisory business, an effective and well-designed business plan is essential. A business plan can help you to focus on the specific steps that will help your business succeed, plan your short-term and long-term goals, determine your financial needs and help your business to grow.

Your business plan should contain information such as:

  • Your company information.
  • Your company description.
  • The services you will provide.
  • Your branding, marketing and advertising plan.
  • The structure of your business.
  • The operational plan for your business.
  • The financial plan for your business.

When creating your business plan, some factors you will need to take into consideration include:

The type of financial advice and products you specialise in

This is one of the most important considerations you will need to make when setting up your business. You may choose not to specialise your business and, instead, offer a wide range of financial advice to different clients with different financial situations and goals. Alternatively, you may choose to specialise in one type of financial advice, such as retirement, savings and investments or debt management. Choosing to specialise will likely result in you becoming an expert in your chosen field and can result in a higher income. Consider your skills, training and experience, the market demand and the likely profits when considering your speciality.

Your typical client base

This is another important consideration. Determining your target market is a key step in helping your business succeed. Different types of financial advice and advisory services will appeal to different clients. Some other factors that can influence your target market are how and where you operate your business, your reputation and your pricing. Once you have identified your target market, you can then focus on how to attract these clients to your business.

Your competition

Being aware of your competition is an important step to ensuring the success of your business. Analysing your competition allows you to look at what they do well and what you think can be improved upon. Look at their financial specialities, the services they offer, their pricing and their target markets. Analysing your competition also identifies whether there is space in the market for your business; for example, if there is already a successful financial advisor specialising in pensions operating in your area, you may choose to focus on a different speciality or customer base or think of ways to make your business stand out.

Your business location (if relevant)

If you operate an in-person business working with clients directly, your location will have a significant impact on the types of clients you are likely to attract. Your location will also impact your premises’ rental costs. If your business is located in an area with a high volume of individuals and businesses from your target market, the increased custom and higher profits will be extremely beneficial to your business. Consider your rental budget and your size requirements when choosing your premises.

Your brand and your unique selling point (USP)

Creating your brand is a key way to ensure you stand out from your competition. Branding can help you to focus your target audience, attract clients and concentrate your marketing and advertising strategies. Some ways you can create your brand are by focusing on your business’s visual identity, considering your specialities and creating a brand story. Your USP can also be part of your brand and can help your business stand out from your competitors. Consider what makes your business special and how this fits into what defines your business.

Your marketing and advertising strategies

Marketing and advertising are especially important when you first open your business. Your marketing strategy needs to be effective and budget friendly. Consider your target clients and the best way to reach them.

Some ways you can market and advertise your business are:

  • Build a functional and attractive website.
  • Create targeted online advertisements.
  • Offer discounts to new clients.
  • Partner with businesses and financial institutions.

Your equipment requirements

Consult the list above to determine your equipment requirements. The equipment you require will depend on the type of financial advisory business you set up, how big your premises is and how many employees you have. Once you have determined your equipment requirements, you can then calculate the initial costs of purchasing the equipment.

Your start-up costs and running costs

Consult the list above to help you calculate the approximate costs of setting up and running your business. Determine what equipment you need and the amount of equipment, as well as the cost of your premises, to help you determine your start-up costs and what your initial investment requirements will be. You can then calculate whether you can finance your business yourself. Determining your start-up costs and running costs can also help you to create a budget and predict when you will begin to turn a profit.

Financing your business

Consult the list of start-up costs and running costs above to determine what capital you will require. Can you finance your business yourself or will you need to source outside investment? If you require investment, you could consider:

  • A bank or building society loan.
  • A personal loan.
  • External private investment or a business partner.
  • A government grant.
  • Venture capital.
  • Personal investment.

Your sales forecast

How many clients can you realistically work with at one time? How much time is required to be devoted to each client? Are there certain times of the year that are likely to be busier than others? What are your weekly, monthly and annual sales forecasts? As your business grows, your sales forecast is likely to change.

Your pricing strategy

Deciding how much you are going to charge your clients is an important consideration. You may choose to charge your clients per hour, per day or per month. Alternatively, you can charge a total price for the work required, work with your clients on a rolling basis or be paid a percentage of their investments or total gains. As your business and your reputation grow, your payment strategy may change.

Your strategy for growth

Your strategy for growth is the actions you will take to realise your goals for expansion and any potential challenges your business could face and how you will avoid or overcome them. This can help to make your business more successful.

Potential challenges could include:

  • Difficulties building your client base.
  • Clients not working with your business long term.
  • Managing each client’s finances and creating their financial plan being extremely time-consuming.

Some potential strategies for growth include:

  • Using multi-strategy advertising and marketing.
  • Hiring other financial advisors.
  • Focusing on higher-value clients.

Your business summary

Your business plan should include a detailed overview of your business, including the type of business you are setting up, the financial advisory you specialise in, your typical client base, your staffing and equipment requirements and your business goals.

Your business goals

Your business goals or objectives are an essential part of creating your business plan. Your business objectives highlight the targets and goals of your financial advisory business and help you to create a one-year, three-year and five-year business plan.

Your business objectives should be SMART:

  • S = Specific
  • M = Measurable
  • A = Achievable
  • R = Realistic
  • T = Time-bound

Check you have complied with all legal requirements

Consult the list of legal requirements above to check you have complied with all requirements and regulations and that all your paperwork is accurate. Failure to comply with legal requirements could have a detrimental effect on your business or could result in a fine, the forced closure of your business or, in serious cases, prosecution.

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starting a financial planning business uk

  • Cover Features
  • The Weekend Essay
  • Financial Adviser 2B
  • Investments

How to build an advice firm from scratch

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Apple co-founder Steve Jobs once said his model for a successful business was The Beatles: four parts that balanced each other so the total was greater than the sum of the parts.

In the financial advice world, most agree there is no such thing as the perfect planning firm, nor a textbook model for starting one from nothing.

The total number of advice firms registered with the FCA at the end of last year was 13,690, down from the 14,254 in December 2016.

The increasing insurance costs and regulatory changes putting pressure on smaller firms are also paving the way for consolidators and vertically integrated players to grow and capitalise.

The uncertainty around the UK’s imminent departure from the EU has placed many things up in the air and is affecting everything from recruitment costs to compliance requirements and the sorts of questions clients will be asking of their advisers.

Because of all this, advisers say there is no guarantee the 2019 market will be a welcome one for new players. But opportunities for fresh challengers are still there if start-up advice firms put the right building blocks in place.

With the new year just around the corner,  Money Marketing  spoke with advisers who have set up alone about how it can be done, and whether it is worth it.

Step 1: Creating a business plan

Red Circle Financial Planning director Darren Cooke says a prospective firm owner should expect to shell out about £25,000 in immediate start-up costs.

They should have about £3,000 to fund an office space and set up basic technology services, as well as sufficient funds to field any excess on their professional indemnity insurance.

With planners earning about £95,000 a year on average, those set-up costs seem relatively worthwhile, with plenty of advisers breaking even on their capital investment in less than two years.

The ability to plan for other costs is less certain, however. In the lead-up to Brexit, advisers say client requests are unpredictable and insurance costs increasingly worrisome.

The introduction of Mifid II and GDPR this year is also driving heightened compliance bills, while an increasing proportion of profits is being sucked up by the need to boost technology offerings as cybersecurity awareness heightens.

Addidi Wealth chief executive and financial planner Anna Sofat says the key to navigating these uncertainties is to begin with a strong service proposition.

She says: “The first thing you actually need is a name, because that will be tied to what you want to achieve, who you are, who you want to service and what you are about.”

Changing hands: Are clients losing out from adviser consolidation?

The proposition should include cost outlines, but also target markets and a timeline for getting set up.

Yvonne Goodwin Wealth Management principal Yvonne Goodwin says the first thought people may have is how daunting the process will be.

For prospective firm owners who are not completely confident on the exact steps to take, she says that money is well spent on getting external help.

Compliance support is likely to be the best initial hire a prospective firm-owner can make, he says.

Cooke says: “Everyone’s first hire is someone different, but you should choose the area you can imagine yourself finding the most difficult.

“For me, it was compliance, but for others, it could be legal support, an accountant, or even a marketing or communications professional.”

starting a financial planning business uk

Mark Meldon, director, Meldon & Co

One of the best ways to start a business is to gradually acquire one. It is very difficult otherwise, especially at the moment. No one adviser can do or be everything for everyone, and neither can one firm.

I joined my firm in 1996, then acquired a quarter of it 2003 and the full firm in 2015, and then had to undergo a rebranding process to market it under my name. It is a challenge to run your own firm – I think starting alone would be difficult when you can join a firm, get to know it, then slowly acquire it over time.

Step 2: Authorisation and insurance

The authorisation process for new firms is relatively straightforward, but arranging business accounting and PI insurance can be the most time-consuming step of starting out, Cooke says.

When processing authorisation applications, the FCA looks to weed out would-be firms that do not demonstrate strong forward planning.

Authorisations consider the attitude of the applicant throughout the process and list the following positive indicators for acceptance of applications:

  • Applicant has read information on the FCA website
  • Applicant is making enquiries of the contact sent
  • Applicant has sought legal and compliance advice
  • Applicant can clearly articulate their regulatory obligations
  • Applicant is open and honest in all dealings
  • Applicant is proactive in supplying information

The regulator recommends six months should be set aside for the process of authorisation, a process advisers say is made more complex by PI insurance requirements.

Goodwin says: “The FCA doesn’t want to know unless you have your insurance sorted, which makes sense, but insurers also won’t look twice if the wheels aren’t already in motion with the FCA. I ended up buying time between the two and getting both to start on the same day.

“If you’re starting a firm under a network, this aspect is easier and less expensive.”

Sofat agrees the initial process between insurers and the FCA can be a “vicious circle”, but says prospective firm owners need patience.

She says: “Legalities and licensing are key factors and all tie into whether you’re directly authorised or in a network and whether or not you want to be a sole trader.

“Hopefully, these will have been the very first thoughts, because they connect back to your service proposition.”

Firms can begin running without authorisation, but should make sure their business plan factors in the cost of getting accredited with the FCA.

Authorisation fees depend on how complex the application is to process and can be a burden on sole traders.

Sofat says: “It also depends on the amount of documents and whether you’re required to provide anything additional.

“At a network, you’d get a compliance solution off the shelf to help out here and they would white-label everything and really hold your hand.”

For those looking to set up a new firm as a directly authorised adviser, having been an AR before can provide vital insight into the keys to success.

Cooke says: “If that is your situation, you’ve already been in the industry and likely know how things work, and can talk to other advisers and contacts about their experiences.”

Advisers looking to set up as ARs should also be wary of the payment processes at networks, too.

Sofat says: “Three to six months of cash flow that is worth your expected income is recommended here, because becoming an AR can have hold-ups that see it take quite a few months before you get paid.”

Both independent and restricted advisers must pass the same qualifications, but do not have to meet all of the same regulatory requirements, so could think over their preferred licensing arrangement while studying to prepare early for which path to choose.

Partnerships and networks are historically more likely to require their advisers to work under a restricted model, along with any wealth or investment group that also provides advice as part of a wider vertically integrated offering.

Meldon & Co director Mark Meldon says that despite his independent status, he would be more likely to encourage a prospective owner of a new business to run a restricted model in the current market.

He says: “It of course depends entirely on what you do, but my work and offerings are straightforward, and so if I were to do things again, I’d probably be restricted. That decision also affects how much insurance you’ll pay.”

Step 3: Technology

While practising IFAs tend to point the finger at technology as a troublesome burden, advisers say it is the easiest part of the set-up process when appropriate help is called in.

Kitting out offices with basic technology, including laptops and phones, is likely to result in a fairly minimal overall cost.

Sofat says: “The technology set-up is the fairly straightforward part, because you can just buy computers or telephones or whatever you need quite simply and work from wherever you want, even if you plan to move to an office space that isn’t ready.”

The process for setting up back-end systems can catch advisers out when trying to keep to the deadlines in their business plan, though.

Cooke says: “I didn’t expect that part of the technology side to be so time-consuming and there also needs to be a lot of time dedicated to deciding what tools you want to get set up.”

Cooke says he involved clients in the process of choosing risk-profiling tools and other pieces of technology, which also helped build good rapport.

Step 4: Bricks and mortar While advisers agree a successful business can easily be run from home, clients are often more easily attracted to commercial offices, even when the firms in them are small.

Goodwin says that when establishing as a sole trader, a bricks and mortar office helped prove the firm’s credentials.

She says: “People always say that you won’t be able to manage on your own and expect you to be struggling from the garage or a room in your house, so for me it was important to have a physical office space straight away that clients knew they could come to.

“Choosing a place was one of the first steps, and it always involves looking at the sort of advice business you want to be for clients, but also considering the business structure you want to have for yourself.”

starting a financial planning business uk

Kim North, m anaging director, Technology & Technical

If you’re setting up, it should be fairly easy to find space, set up a website and build your brand. The tricky bit is establishing it all while doing exams, as it’s about 200 hours of study time for each qualification.

Another difficulty is professional indemnity insurance as the market continues to contract. Attracting talent is becoming harder – they need brains and personality.

Step 5: Growing a brand

Data collected by Money Marketing last year found a great variety in the ratio of clients to advisers at firms, ranging from just under 50 to about 250.

For those who set up firms from scratch, advisers say word of mouth is the most effective way to build up client numbers.

Advisers moving from networks to becoming DA often need to grapple with restrictive covenants when it comes to acquiring clients at the new business, though.

Goodwin says: “When I first started, I was not allowed to contact any of my clients because of restrictions, but I found a lot of them ended up contacting me. When I first started, I had about 25 clients and they were all people I had serviced already.”

Informed Choice financial planner Martin Bamford says finding clients is a learning curve that will have upsides and downsides.

He says: “I started out the old-fashioned way, meeting people face-to-face at networking events and getting referrals that way. It has mixed results, and everyone acquires a few of the wrong clients, as well as some of the right ones, at the start.

“It’s all about gaining confidence and experience in what you do.”

While marketing is increasingly pushed as the missing piece of the advice business jigsaw, for many planners, it is the cherry on top of more fundamental aspects of the firm’s model when getting started.

Cooke says: “Marketing will often happen naturally as you start out, and then you can turn your attention to it when you’re up and moving.”

Sofat adds: “Getting a website these days is dead easy, and it’s not time- consuming. Anyone can get up and running easily with that.

“Really, the hardest part is that even with different bits of help, you really are doing everything by yourself, and things are your responsibility.

“If you want to have your own firm, you need to streamline efficiencies, understand from the off what you can and can’t pick up and do, plus get the compliance and legalities under wraps straight away.

“Work out what resources you need and start from there.”

starting a financial planning business uk

You need to start out knowing there will be an end

As you plan the set-up, direction and growth strategy of your fledgling business, it is extremely important to know you are heading towards an exit from the day you begin. All businesses have a natural lifespan, and the earlier you incorporate exit planning, the more control you have over what happens. There are some key factors which will help you build a strong business from the start and help improve your worth and value in the market, which you can incorporate right from the beginning.

Firstly, although your heart may be telling you to diversify from the competition and stand out from the crowd, the long-term value in an advice business will always be well-delivered pension and investment advice, with a clear client proposition. Around 90 per cent of business valuations are based on recurring income – if you are looking at building inherent value, focus on that.

Using technology in your business is also vital. Clear business processes underpinned by technology show you have a well-run advice ship. A strongly implemented back-office system linked to investment providers and platforms will give you real-time client data, essential for due diligence.

Thinking long and hard about your employment strategy when setting up is also crucial. Businesses built on self-employed advisers can create a great income and lower costs in the short-term, but bear in mind they detract from the value of your business, and many buyers operate an employed-only model.

Many factors you implement can be attractive at the point of sale and make good business sense from day one. If you have a blank piece of paper to start from, remember to include the end as you plan for the   start.

Louise Jeffreys is managing director at Gunner & Co

There are 4 comments at the moment, we would love to hear your opinion too.

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I started an IFA business from scratch back in 1990. I would say that £25k is a bit on the thin side as back then it cost me about £18k. But then it depends on how much you want to spend on refurbishing your office and the quality of the equipment you install. I don’t see the most important first step being mentioned – Getting authorisation from the regulator. The next omission seems to be the next most important – watch your operating costs. Why locate in a high rent area? Prestige rests with how good you are at the job, not where you are located. Personally I started out (and remained) a sole trader. Initially I just thought I’d see how it went, but then on weighing up the options of increasing the manpower decided I wanted to be an adviser and not a nanny of other advisers. Also adviser staff increases the business risk exponentially. Why incorporate? Does it really protect you? Look at some of the current cases. The regulator has a long arm. There are many more tax advantages to being unincorporated, not to mention Capital Adequacy. In this case you don’t need to have money sloshing around not earning anything. It’s all very well having high expectations, but always consider the downside. Be realistic. Business plans can look very nice but are largely a waste of time. Like life, business is an uncertain event. I have throughout assumed that you wouldn’t be so foolish as to borrow money, but fund the whole operation through your own resources. (Including not mortgaging your home). If you don’t have the capital you may be well advised to defer your plans until you do (have the wherewithal). Lastly it does help if you have some good professional connections.

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The £25k quoted is what you will need for your Capital Adequacy and your PI excess now. Of course there are other costs including your FCA application. I went DA 3 1/2 yrs ago with c£20k (CA then was only £10k) although I moved from network so already had some things such as computers I just carried over.

You only need the £25k for CA if you incorporate. Assuming that you have at least that in other personal assets. For example a decent pension fund could qualify (assuming you are over 55) if you are unincorporated.

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Any IFA who runs a business unincorporated is simply mad I’m my opinion!

Why have the risk of a complaint from 30 years ago come at you when you’re 82 and retired years ago?

My first piece of financial advice to any new IFA is ,.., go limited.

(And I’ve never had a complaint yet btw)

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Why Open Your Own Firm?

  • Growing Demand

Veterans and Client Base Retention

Rookies and client base building, #1. start-up costs, #2. licensing and training, #3. business plan creation, #4. business model and services.

  • #5. Professional Relationships
  • #6. Risks and Liabilities

#7. Reaping the Rewards

The bottom line.

  • Financial Advisor
  • Practice Management

Tips on Starting a Financial Planning Firm

starting a financial planning business uk

Whether you're a veteran financial planner looking to get out from under a tyrannical boss or a rookie just out of college, the dream of starting your own financial services firm is probably an aspiration that gets you out of bed on even the rainiest of days. Money, autonomy, convenient office hours, and recognition within the community all come as part of the package, at least in our dreams. In reality, starting a financial services firm is a lot of hard work. Those who fail are often those who fail to plan.

Read on as we explore what you need to know to turn your dream into a thriving business reality. We will go over seven crucial factors to keep in mind when starting your own practice.

Growing Demand for Financial Planners

The age of your average financial planner  is increasing, along with the ages of their client base. With that, more planners are leaving their practices while more potential clients are entering their retirement years.

This changing demographics in the American population is rapidly opening up new areas of specialization, such as long-term care and alternative investments. The most recent generation of financial products and services also allows advisors to meet the needs of clients in ways that could not have been anticipated even a few years ago. These factors have increased the need for qualified financial planners.

If you're a veteran in this business trying to go independent, you're probably tired of the constant sales pressure, office politics, and other corporate restrictions placed upon you now. At this point in your career, you have probably developed your own personal investment philosophy that may differ from the methods espoused by your current employer. You may also be concerned about managing your book of business and feel that your client base  would be better served in a more independent setting.

While having an established client base is a huge advantage for anyone starting their own financial planning practice, it also creates its own set of issues. Think about how you will achieve client retention and still be able to service key customers when moving those accounts from one company to another.

Newcomers to the business will face much bigger obstacles on the path to success. In addition to the normal start-up issues that must be dealt with, rookies must also build up a client list from scratch, as well as learn the mechanics of the business, which can be considerable. But, like many entrants into this field, you may see financial planning as a way to make a real difference in other people's lives.

If you are an entrepreneurial spirit, you may be enticed by the possible prestige, freedom, and high compensation enjoyed by many financial planners. But regardless of your background or motives, establishing your own financial planning firm will likely be one of the most difficult—and satisfying—things you've ever done.

Starting a financial planning firm entails many of the same start-up costs as any other business. These include furniture, rent, advertising, technology, utilities, and perhaps an earnest deposit with the new broker-dealer (if one is to be used). Licensing and training costs must be taken into account for those who need them as well. Veterans with a book of business will also need to factor in any possible loss of revenue resulting from the changeover to a new company.

In addition to obtaining the necessary licenses, rookies should consider earning a professional designation or two, such as the Certified Financial Planner or Chartered Life Underwriter. Credentials like these can help provide much-needed credibility and academic training for those who are new to the business or looking to expand their repertoire.

If you're a veteran in the business, however, licensing and training may not be a critical issue unless you are getting into a new line of work. For example, if you have an insurance business and plan to add investments or comprehensive financial planning to your practice, then you will need to be licensed (and perhaps certified) accordingly.

As with any other business, it is vital that independent financial planners begin with a sound written business plan . This plan should include:

  • The goals of the business
  • Specific strategies on how to achieve these goals
  • The current state of the financial markets
  • The demographics of clients and prospects
  • How to differentiate your firm from the competition
  • A flexible marketing plan
  • All probable costs (these should be clearly defined)
  • A realistic estimate of the amount of time it will take to accomplish the plan's objectives

Determining what kind of financial planning practitioner, you will be is an important decision. This choice involves both the type of services you will provide your clients as well as your method of compensation. Financial planners who work on commission tend to earn much more (on average) than fee-based planners.

Customers who specifically desire unbiased advice, however, usually seek out fee-based planners . Your personality type may play a role in making this choice; if you have an analytical mind and don't enjoy high-pressure sales, you may feel more at home with just running numbers and making recommendations.

On the other hand, if you are a Type-A personality who likes working with people, then you may have more success using a sales-based approach. The type of business model you decide to employ may also determine which licenses you will need to obtain.

#5. Build Professional Relationships

Establishing professional relationships is crucial for any budding financial planner, especially one without an established book of business. Finding an attorney or CPA who is willing to partner with you may be the best thing you could do for your business. A mentor can be equally important, particularly for newcomers to the business. Having someone to ask the advice of who can guide you through the difficult early stages is invaluable for those who are still learning the business.

If you both need and can afford it, then you will have to find and build an effective support team around you, whether it is a single assistant or an actual team of people. Making certain all of these pieces fit correctly will take some time and adjustment, but the end result should be a streamlined, efficient staff that allows the business to run smoothly and profitably.

#6. Know the Risks and Liabilities

Starting any business involves a certain amount of risk. There is the risk the business will generate insufficient revenue to survive, as well as risk from liability and other fiduciary responsibilities. All financial planners need indemnity insurance . Errors and omissions (E&O) insurance will guard against malpractice suits, but remember that ensuring regulatory compliance in your business will ultimately be your responsibility. All client complaints and problems must be dealt with in a professional manner to ensure the stability of the business.

Successful planners enjoy high (sometimes very high) compensation, virtual autonomy, and convenient office hours, as well as recognition within the community. But the best reward of all can be the sense of accomplishment that comes from helping a client achieve peace of mind by resolving a complex financial issue. Regardless of which type of reward you desire, the financial planning profession may well offer what you seek.

While starting a private financial planning practice undoubtedly involves a significant amount of work and risk, those who desire to do so should not let fear prevent them from realizing their dream. Many private and even corporate practitioners will readily tell you that financial planning is the best business in the world.

starting a financial planning business uk

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Financial planning for first-time business owners

Our experts.

  • The Startups Team

Owning your own business is a dream come true for most entrepreneurs – so once you have it, you're going to do everything in your power to create and maintain a successful, growing business.

However, business owners often put a lot of their own cash into their new companies, so it is important not to lose sight of how running a business affects your own financial position. Often, entrepreneurs are focused on setting up their business and ensuring all the relevant systems are in place, but can forget to plan for their own financial goals. They are too busy writing a business plan to think about their own personal financial plan.

Financial planning is crucial. You may well have bags of common sense and knowledge, but the excitement and busy schedule that a new business requires can inevitably mean that financial planning drops down the list of priorities. Keeping on top of your finances and being aware of your options is imperative to your business' survival.

A financial adviser is a great option for entrepreneurs and business owners, if only to make sure you get off on the right financial foot and clear the way for future success. They can also assist in forming a succession plan and ensuring your business enables you to meet your personal dreams and ambitions.

The crucial thing to remember when your business is off the ground is not to spend too much too soon. Of course, you'll want to celebrate your success, but try to hold off from spending too much for as long as possible. Around 90% of entrepreneurs' businesses go bust because of bankruptcy. This is why it is crucial to plan your cashflow as meticulously as possible. A good financial plan will clearly outline how much you can afford to invest and pay yourself. When planning, it's a good idea to overestimate overheads and underestimate income.

To help cashflow, it is crucial to invoice customers as soon as possible, run credit checks on customers and invest time into negotiating the best deals possible with suppliers.

As well as considering corporation tax, you will also need to look at your personal tax liabilities and how you can reduce these by taking advantage of tax-planning opportunities, particularly in the area of pension planning.

Another crucial element to the financial planning process is risk management. If your business is small, you may depend on a few key people for the operation of the company. This means that key person insurance may be important to plan for the unknown.

It's also imperative to ensure you have enough personal protection in place for the eventuality that you may not be able to work. Putting together an insurance and protection plan may not seem like a top priority in the very early stages of your business – but it's definitely better to be safe than sorry.

When first setting up a business, it is important to come to an agreement with all shareholders regarding the terms of the shareholder agreement. This will specify a method of valuing the company. It will also set out the terms of buying and selling shares in the event of illness or retirement.

You should apply the same financial planning priorities for your employees too, putting in place pension plans and group health insurance plans. In general, it will be in your own interest to provide a competitive benefits scheme.

When it comes to setting up a business – there are many angles that need covering. Whether you hire someone to do every job or outsource some tasks – this is something that needs a lot of consideration and forethought.

Financial planning for both you and your business is a long-term task that involves regular review. As your goals and financial situation changes over time, the strategies for managing your income and outgoings will always need to be re-evaluated in order to remain in tune with changes within the business and the economic climate.

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Financial Advisor

The COMPLETE guide to becoming a Financial Advisor! (2023)

  • Table of contents:
  • Financial Advisors, what do they do?
  • How much does a Financial Advisor earn?
  • How long do Financial Advisors work?
  • The benefits of being a Financial Advisor
  • Types of Financial Advisor
  • Employed VS Self-employed
  • What qualifications do I need to become a Financial Advisor?
  • Desirable Qualities of a Financial Advisor
  • Different Routes to becoming a Financial Advisor 
  • Writing your CV
  • Financial Advisor Interviews
  • Financial Advisor career progression

  • What do Financial Advisors do?

Financial Advisors help people to manage and plan their current and future finances. Whether that be helping someone plan their retirement or advising you on how to invest and save. When it comes to finances, Financial Advisors have a large breadth of services they can offer advice on. 

Throughout every person’s life, their financial needs and goals grow with them. A person who is looking to purchase their first home, for example, will be thinking about mortgages and life insurance. Someone who is growing older may be thinking about retirement plans and pensions. A Financial Advisor can help with all of these things by devising a detailed financial plan. Financial Advisors look at each of their individual clients’ finances and financial goals and try to align the two. This can involve recommending their clients the best savings accounts, mortgages, insurance services, pensions and even investment advice. A large part of a Financial Advisors’ job is the justifications behind the products they advise. Financial Advisors must be meticulous at explaining their process, in order to explain why they have come to the conclusions that they have, instilling trust in their clients. 

An average list of duties for a Financial Advisor can look like:

  • Liaising with back-office staff 
  • Meet performance and sales targets
  • Providing advice to clients talking through their finances and plans
  • Travel to meet clients 
  • Stay up to date with current trends in the market 
  • Source new business
  • Research financial products and explain them simply and clearly
  • Update clients about their investments
  • Attend business meeting 
  • Create marketing literature 
  • Remain compliant 
  • Nurture leads
  • Develop your career and knowledge
  • Liaise with product providers
  • Produce financial reports
  • Keep up to date with new products and law changes

Of course, you can easily invest in back-office support that may help with some of these duties. 

When thinking of starting a new career journey, it is only natural to consider how much money said career pays. There is potential to earn a very comfortable amount of money as a Financial Advisor. However, there is definitely not a conclusive sum that you can expect to earn. There is a big range in earnings that Financial Advisors take home.

Financial Advisors don’t always earn a salary from an employer. In fact, it is becoming increasingly common for Advisors to be self-employed and earn a commission rather than a salary. Some reports on a Financial Advisor’s average earnings:

Premier Jobs UK

  • £40,000 – £70,000 (plus bonuses)  
  • Senior Financial Advisors that work with an average-wealth client base £60,000 per annum
  • £64,000 – £70,000 per annum
  • £70,000 – £100,000

Financial Advisors typically contractually work between 35 – 40 hours per week, however, this can vary. 

An important part of being a Financial Advisor is building a good relationship and rapport with your clients. Due to this sometimes your work hours may become unsociable because your clients often have busy working schedules. Therefore, it is not uncommon for Financial Advisors to have to work on Saturdays and take appointments in the evenings. 

Being a Financial Advisor, in many ways, is an attractive career. Some of the main positives we recognise are:

  • It is a career that has a high earning potential and is typically well-paid from the start
  • Finances are often the biggest stress in people’s lives, and helping them plan their finances in order could relieve them of this stress. Making your job highly rewarding!
  • There’s also a lot of opportunity. The average Financial Advisor is 57 years old according to St James’s Place meaning many Financial Advisors are approaching retirement leaving opportunities open for the next wave of Financial Advisors to join the industry.
  • Being a Financial Advisor is all about working with people. This means that during your career you will grow a large network of professional connections. 
  • Due to the time and rapport built up with these clients, you will surely make personal connections as well. This can come in handy during the rest of your career and you can utilise this network of people.
  • Types of Financial Advisors

The 2 main types of Financial Advisors are Independent Financial Advisors and Restricted Financial Advisors. Both can offer great advice and they are both good career options. The main differences are:

Independent Financial Advisors (IFA) 

Independent Financial Advisors (or IFAs) have no restrictions on the products and providers they advise their clients with. They will also have no restrictions on the areas of the market they advise on. A Financial Advisors’ goal is to find out their client’s financial goals and strategise to create a plan that includes products that can help them to reach this. 

Benefits of being an Independent Financial Advisor

  • A benefit of being an Independent Advisor is that you have the freedom to give the most personalised advice to a client due to your unrestricted access to the products on the market
  • Another benefit of being an Independent Financial Advisor is that it makes you stand out. It is more common for Advisors to be restricted rather than Independent so this can be a real differentiator for potential clients

Restricted Financial Advisors

Restricted Advisors focus on a selection of products and providers that is limited. However, this does mean they can sometimes access exclusive rates or products due to working closely with this provider. Usually, they will have a small amount of leeway to go off-panel, but the vast majority of their advice must be using a particular range of products. A restricted Financial Advisor also could be an Advisor who only advises on one particular market i.e. investments or pensions. Therefore, they are restricted by proxy. 

Benefits of being a Restricted Financial Advisor 

A Restricted Advisor has a significantly lower amount of due diligence to do when advising products, as most of this will be done by the firm. It makes the Advisors job much simpler in comparison to an Independent Advisor

There are thousands of products on the market, limiting the number of products that an Advisor can allow them more time to focus on other clients and do things like fact finds and writing suitability letters.  

Should I become a Restricted or Independent Financial Advisor?

There are pros and cons to becoming either type of Advisor. It is natural to think that becoming an Independent Financial Advisor would be the better option. For some individuals this will be true, some Advisors will thrive on giving advice that isn’t limited to a certain set of products and providers. However, for some, being a Restricted Advisor will make for a less stressful life as having access to the thousands of products and providers on the market is such a broad range. Overall, you can have a successful and fulfilling career in either job role.

Types of Financial Advisor

  • Employed VS Self-Employed: Which is better for a Financial Advisor? 

In the Financial Advisor industry, commonly there will commonly be self-employed and employed jobs. There are positives and negatives to both, and everyone works differently so it is up to you to figure out which type of role would suit you best.  

Advantages employed Financial Advisor roles: 

  • Employed roles offer Advisors a fixed salary, a lot of Advisors will value the stability of a guaranteed income each month
  • You often will service a client bank and/or be supplied with leads, this can make an Advisors life a lot easier as they can grow their network easily and have a good flow of business without having to network themselves
  • Some people thrive with having management over them in a place of work due to the structure it brings

Advantages of self-employed Financial Advisor roles:

  • You get to be your own boss and structure your days, this is the type of freedom that you can only get from a self-employed position
  • There are no limits on how much a self-employed Advisor can earn
  • Being self-employed often means they receive a larger proportion of the income they produce, a hardworking and motivated Advisor typically has a larger earning potential being self-employed than being employed
  • You can build up your client bank which you can pass on or sell at the end of your career 
  • Usually, self-employed Advisors will have to be fairly (but not completely) self-sufficient in finding their clients and leads. Financial Advisors often offer lifetime advice though, so having repeat clients will minimise the severity of the impact this has

The disadvantages of employed Financial Advisor roles: 

  • As an employed Advisor, there will be limitations to how much money you can make. Your commission rates are lower and therefore your earning potential is definitely restricted when compared to a self-employed Advisor
  • When you are employed, you will likely not have a client bank that you can sell when you retire 
  • As with all employed jobs, there is a potential to be micromanaged. The freedom of planning your own days and working within your own time schedule

The disadvantages of self-employed Financial Advisor roles:

  • The lack of financial stability is a big disadvantage of a self-employed Advisor role. Self-employed Advisors rely on just their commission earnings, so if they have a month where they can’t work or business isn’t very good, their earnings will be jeopardised  
  • Self-employed Advisors also have to be extremely self-motivated as they don’t have any structure. They need to be organised and time managed at all times otherwise risk losing out on business 
  • When you are self-employed, you may not have access to back office staff and may have to pay a salary or monthly fee to have access to this resource – otherwise, your admin duties will quickly stack up!

Should I be an employed or self-employed Financial Advisor?

When choosing which is best for you, you should consider what environment you work best in. Do you thrive on the structure, or do you prefer to decide how to do things yourself? 

You should also consider what you place more value on, a high commission rate or a consistent salary. Self-Employed Advisors also need a large amount of self-motivation to succeed.

Not everyone has this so it’s definitely something to think of before making a decision.  We also advise that you consult an expert who can help you discuss your options and decide which route is best for you. We have multiple experts whom you can call and have a free no pressure chat with, contact us today .

To become a Financial Advisor you will have to have an FCA-recognised qualification in order to become authorised. The 2 main recognised professional bodies that award such qualifications are the LIBF and the CII . 

DipPFS – Diploma in Financial Planning (CII)

Key facts for DipPFS: 

  • 100 credit or 140 credit option 
  • There is flexibility in the modules you pick
  • If you complete the DipPFS you will have a designation, this designation can show employers and clients alike that you are dedicated to your career and work to a prestigious standard
  • You will receive EFA designation, through the Chartered Institutes mutual recognition agreement with the European Financial Planning Association
  • You will be able to claim discounts on a range of studying and learning tools
  • You will be granted access to pertinent market information through their extensive library of financial planning publications, reports and documents
  • Membership to a PFS region and CII local institute providing local CPD events, training and networking opportunities
  • You can enter a CPD scheme after completion of the DipPFS to keep your skills and knowledge up-to-date
  • As a member, you will get market news and updates from their membership magazine, Personal Finance Professional
  • As a member you will be eligible for their benefits scheme. This is called ‘Perks’ and gives you access to lots of discounts on high street brands and shops 

Read the full guide to DipPFS here

DipFA – Diploma for Financial Advisors (LIBF) 

  • The LIBF Diploma is more holistic, some would argue that it gives a more realistic view to aspiring Advisors 
  • The LIBF recommend students dedicate 400 hours of study time (average study time is 9 months)
  • Two units, Unit 1: Financial Services, Regulation and Ethics (FSRE) and Unit 2: Advanced Financial Advice (AFA)
  • Mixture of multiple-choice exam and coursework
  • The LIBF Diploma will cost you £1,160 with tutor support or £1,050 without tutor support, nearly half of the DipPFS 
  • For some the idea of sitting 6 exams will be too tedious, making the LIBF diploma a better option

Read the full guide to DipFA here

Should I take DipFA or DipPFS to become a Financial Advisor?

Both these diplomas are brilliant choices for those looking to have a prosperous career in Financial Advice. Although there are definitely differences between them, overall, both qualifications can be great options for an aspiring Financial Advisor it is just up to the individual to decide which Diploma is the best option for them. 

Read the full comparison between the qualifications here

DipFA or DipPFS

A Financial Advisor’s job is largely about liaising with clients. You are also trusted to give sound advice on people’s livelihood which is a large responsibility, so it is vital that every Financial Advisor possess the correct qualities. Some valuable qualities for a Financial Advisor to have are:

Analytical thinking: A large proportion of your job as a Financial Advisor will be benefit if you are a strong analytical thinker. As a Financial Advisor you need to aim to make your client’s financial goals a reality. This won’t always be as simple as you desire and it is important that you are able to consider factors like market trends and optimum investment return.

Relationship-focused: As a Financial Advisor, one of the key components to doing your job successfully will be building and maintaining relationships with your clients. Many of your potential clients will be searching for prolonged financial advice so it is important for you to place value on the client relationships you encounter.

Conscientious: A Financial Advisor can not make impulsive decisions. Your clients will be placing a large amount of trust in you, and that shouldn’t be taken advantage of. Staying conscience helps maintain a brilliant standard of Advisory.

There are a multitude of other skills that would benefit an aspiring Financial Advisors career, looking introspectively is really important here. Some people will have these traits naturally, but if you don’t, there are many ways you can build upon these skills.

The more problem-solving tasks you complete, the stronger your analytical thinking will become. When you are in your current role or just in day-to-day life you will encounter things that go wrong. Instead of thinking up one solution, think of as many as you can, this will teach you to think more analytically. You should make a note of these situations too as in your future Financial Advisor interviews you will surely be asked.

To build on your ability to form great professional relationships , put yourself In situations where there are lots of new people. Strike up conversations where you can and this will help you to become more personable.

Being conscientious comes hand in hand with being passionate. If you are really determined to succeed in an Advisor position then being thorough should come naturally. It also helps to recognise how much trust Advisors clients put in them as finances are such an important part of life.

Different ways you can become a Financial Advisor

Due to the seriousness of the profession, it can take many years for people to reach the occupation of Financial Advisor. In fact, in the UK the average age of a Financial Advisor in the UK is 57 according to St James Place 

Option 1 – Career progression

The majority of Advisors will work their way up to an Advisory job but will get started in Administration. Then typically, once you have built up enough experience in a Financial Planning Administrator job you will progress into a Paraplanner position. Typically, after being a Paraplanner for a while, is when we see people starting to transition into Advisory positions. These Advisory positions will typically be Trainee roles at first. Only then will you have the experience that is required for most Financial Advisor roles.

Option 2 – Trainee Financial Advisor 

Of course, this is not the path that every Advisor will take. Some Trainee Financial Advisor jobs will give opportunities for younger less experienced people, depending on their ambition and educational achievements. These opportunities are usually quite rare and very popular.

Option 3 – Transitioning into Financial Advice

Some people end up in Financial Advisor roles after being on the Mortgage side of financial services. Typically a Mortgage Advisor will work towards this role from a Mortgage Administrator position. However, sometimes companies looking to take on Financial Advisors will take on those who previously worked in the mortgage sector. This is often attractive to previous Mortgage Advisors who want a career change.

Of course, there are more options than the above three, these are just the most common ways we see on a day-to-day basis.

  • How to write a CV for a Financial Advisor 

Before starting your career journey as a Financial Advisor, it is important you are aware of what makes a great CV. As the Financial Services industry is such a professional industry – it is important that your CV is up to scratch.

What should a Financial Advisor’s CV contain? 

As an aspiring Financial Advisor, getting your CV correct is very important as an employer will decide within seconds from your CV whether you are worth their time. Your CV needs to be truthful yet enticing to a current employer, especially as a Trainee where you won’t have any existing experience. 

Financial Advisor CV


As a Financial Advisor, arguably the most pertinent part of your CV is your experience. The Financial Services industry, and Advisors advise on matters that could have devastating effects if done wrong. Employers typically see it as the more experienced an Advisor, the more trustworthy and knowledgeable they will be perceived. Earlier on in this blog, we covered the career pathways that can lead you into Financial Advisory, so any experience that is relevant will benefit! Jobs that show you can be trusted, have good people skills and are good with numbers will all make great editions to your Financial Advisor CV. If you’re a Trainee, focusing on the specific skills and traits that would make you good at the role is key  

Other Important aspects for your Financial Advisor CV 

Besides experience there are definitely other ways to wow an employer or firm, using your CV. Some of these are as follows: 

  • Production – The Financial Advice industry is a revenue-driven one. Therefore, the more revenue you can bring as an Advisor, the more employable and desired you will become
  • Specialism – An Advisor who specialises in an area of financial advice (for example pensions) will be a lot more attractive to firms than other more holistic candidates. This is because specialism displays a deeper breadth of knowledge that could be extremely valuable to a company  
  • Values – It’s important to showcase your values on your Financial Advisor CV. Some firms are value-driven and having aligning values could land you a position! 

For more advice check out our COMPLETE guide to writing a fantastic Financial Services CV

Financial Advisors interviews

Before your illustrious Financial Advisor career starts, it is important to know how to ace the interview. The most common style of interview you will encounter as an aspiring Financial Advisor is competency-based interviews. Below are some of our guidance, tips and advice to help you excel in your interview.

How long are Financial Advisor interviews?

Most competency-based interviews will last around 1 hour. This can massively vary and can depend on how well the interview has gone. Other factors that can affect the time of the interview however are how many stages the company has in the recruitment process and how many candidates are interviewing for the role.

Check out our previous Guide to Financial Services competency-based interviews for more information  

Financial Advisor core competencies 

  • Detail orientation: A helpful competency that many Financial Advisors share is detail orientation. It is important for Advisors to listen to their client’s requests and advise them accordingly. To do so successfully they need to keep in mind multiple different products, figures, market trends etc
  • People skills: Client relationship skills are pertinent to an advisory role as your job will be customer based. As an Advisor, your clients place a lot of trust in you so your relationships with them are vital
  • Decisiveness: Decision-making is a brilliant competency for an Advisor to have. Advisors need to be confident in the advice they give to their clients and being able to make decisions even whilst in a high-pressure job, will certainly benefit you 

How do I identify my personal core competencies for Financial Advice?

In conjunction with some general Financial Advisor core competencies, it is a good idea to quiz yourself to help you work out your personal competencies:

Think back to what you were doing previously and how that could help you here:

  • How would others describe you?
  • What are you really good at?
  • Why are you good at those things?
  • What are some of your biggest achievements?
  • What was required from you to achieve these?
  • Financial Advisor career progression 

Once you land that first role as a Financial Advisor or Trainee Financial Advisor you can then set about moving up the ranks! The typical progression if you are in an employed role looks like:

  • Administrator 
  • Paraplanner 
  • Trainee Financial Advisor
  • Financial Advisor
  • Senior Financial Advisor
  • Chartered Financial Advisor
  • Head of Financial Advisors 

In the coming months, we’ll be looking to expand our content to cover how to become a Chartered Financial Advisor and what that entails – so keep your eyes peeled. Typically, career progression means more responsibility and more responsibility means more pay!

We have covered Trainee Financial Advisor and Financial Advisor roles already in this blog so just to add an additional layer of detail for the following roles:

  • Senior Financial Advisors = Typically have 5+ years of experience as a Financial Advisor and are at the point where they can mentor other Financial Advisors in the team and potentially train up new Trainees. They are also recognised and sought after by clients for their experience and as such can potentially charge more for their services
  • Chartered Financial Advisors = Can typically provide advice on more technical and nuanced matters due to their additional qualifications and a vast array of experience. As well as undertaking the same duties as those below them, Chartered Financial Advisors usually have a specialist niche that they lean towards
  • Head of Financial Advisors = Typically a Head of Financial Advisors would have done every other role at one point in their career and is now at the point where they can manage, lead and develop a team. Usually, they will have 10 to 15+ years in the industry and have seen most of what there is to see, well placing them to lead others

In this blog, we covered a large spectrum of topics that will all help you in your pursuit of a career as a Financial Advisor. These include: 

  • Different ways you can become a Financial Advisor:  
  • Financial Advisors interviews

It can always help to talk to a professional, who could potentially grant you with even more information on how best to achieve a career as a Financial Advisor. Call us now for a free no pressure chat, with one of our experts who can tell you all things Financial Services:  

  • Email: [email protected]
  • Telephone: 0208 0044 15
  • LinkedIn:


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