Table of Content

    Do you want to start financial advisor business?

    Do you want to start a financial advisor business? Well, there are many benefits of starting this business, the biggest one of which is the extremely low initial investment required for its startup. Secondly, you can also start it from your home, or a small office or even a virtual location and can still make huge profits.
    The only problem associated with this business is that it is never easy for startups to find high-paying clients in the initial run. So, it is highly recommended that you prepare a comprehensive business plan which will not only help you attract good clients but will also establish the basis of your company’s operations and future decisions. If you are wondering how to write a good business plan, here we are providing you the business plan for a financial advisor business startup named ‘Martin Financial Services’.

    Executive Summary

    2.1 The Business

    Martin Financial Services will be a licensed and registered financial advisory company aimed at solving all your financial problems by providing exceptional financial advisory and consultation services. The company will be owned by Nick Martin, a renowned financial expert, and the company’s main office will be located in Downtown Chicago.

    2.2 Management

    The success of a startup heavily depends on its staff and management that’s why Martin planned it before developing his financial advisor business model. The company’s management will comprise of sales executives, financial analysts, and insurance consultants.

    2.3 Customers

    This sample business plan for financial advisor position also outlines what are the main target customers for a financial advisory firm. Martin Financial Services will provide financial consulting services to individuals, organizations, and businesses located in Chicago.

    2.4 Business Target

    Our target is to balance the initial cost of the startup with earned profits and to achieve the net profit margin of $10k per month by the end of the first year.

    Financial Advisor Business Plan - 3 Years Profit Forecast

    Company Summary

    3.1 Company Owner

    Martin Financial Services will be owned by Nick Martin, a business graduate from the University of Illinois. Martin has more than ten years’ experience of working with various financial organizations including Wells Fargo and Equifax.

    3.2 Why the Business is being started

    The business is being started with the purpose of making profits in this industry while also providing quality services.

    3.3 How the Business will be started

    Before starting your own financial advisor business, you have to plan everything beforehand otherwise you have very lower chances of succeeding in it. Martin Financial Services is a well-planned venture and its exceptional planning will become one of the reasons behind its success. The company will be started in a leased office in Downtown Chicago. In addition to computer systems and usual office inventory, professional financial software will also be procured. The startup summary is as follows:

    Financial Advisor Business Plan - Startup Cost

    The detailed startup requirements are given below:

    Start-up Expenses  
    Legal $55,300
    Consultants $0
    Insurance $32,750
    Rent $32,500
    Research and Development $32,750
    Expensed Equipment $32,750
    Signs $1,250
    TOTAL START-UP EXPENSES $187,300
    Start-up Assets $0
    Cash Required $332,500
    Start-up Inventory $32,625
    Other Current Assets $232,500
    Long-term Assets $235,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING $0
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $11,875
    Start-up Assets to Fund $15,000
    TOTAL FUNDING REQUIRED $0
    Assets $23,125
    Non-cash Assets from Start-up $18,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $18,750
    Cash Balance on Starting Date $21,875
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $332,500
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $695,000
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $251,875
    TOTAL CAPITAL AND LIABILITIES $251,875
    Total Funding $255,000

    Services for customers

    Considering the economic demands of today’s world, there are countless firms that are providing financial advisory services. You can do some research about them and find out what services they are offering to their customers. You can also find many financial advisor business plan free templates on the internet or you can take help from this sample business plan for financial advisor. Deciding your services is extremely important since the planning of other subsequent components depend on it.
    Martin Financial Services will offer a variety of financial advisory and consulting services to its clients from United States. Our main services include:

    • Insurance and Tax Consulting
    • Accounting and Financial Services Consulting
    • Budgeting and Financial Planning
    • Financial Auditing
    • Estate Planning
    • Income Tax Preparation
    • Mortgage, Pension, Retirement and Investment Advisory Services
    • Asset Management
    • Wealth Creation and Wealth Management
    • Investment (Business Portfolio) Management

    Marketing Analysis of financial advisor business

    The most important component of an effective financial advisor business plan is its accurate marketing analysis that’s why Martin acquired the services of marketing experts to help know how to write a business plan for financial advisor and develop a financial advisor marketing plan template. The success or failure of a financial advisory business totally depends upon its marketing strategic business plan which can only be developed on the basis of accurate marketing analysis. Marketing analysis is a must-do thing before you develop your financial advisor business plan sample. If you are starting on a smaller scale, you can do marketing analysis yourself by taking help from this financial advisor sample business plan or any other financial advisor business plan template available online.

    5.1 Market Trends

    For finding the marketing trends before starting your business, you can take help from this financial advisor business plan example or any other financial advisor business plan template free available online. This financial advisor marketing plan example also contains information about current industry and market statistics of financial advisory services. Financial advisory industry is one of the booming industries of the United States. Currently, the industry generates more than $56 billion annually with around 121,000 businesses employing more than 215,000 people across the United States. Furthermore, the industry grew by 8.1% over a course of 5 years from 2012 to 2017. This increase is attributed to the economic development and the increase in other industries of the country, thus creating more demand for financial consulting and advisory services.

    5.2 Marketing Segmentation

    It is very important to analyze the market segmentation of the future customers of your services before you start your business because a successful and efficient marketing strategy can only be developed after we completely know our potential customers. Our target market is the residential community as well as the corporate sector located in Chicago however, we will primarily focus on our clients from business sector. Our experts have identified the following type of target audience which can become our consumers in future:

    Financial Advisor Business Plan - Market Segmentation

    The detailed marketing segmentation of our target audience is as follows:

    5.2.1 Corporate Sector:

    The biggest consumer of our services will be the corporate sector located in the Downtown Chicago ranging from small startups to established multinational companies. This group includes product manufacturers and distributors, real estate owners, hotels, restaurants and food companies, IT and software development firms, branding and advertising agencies as well as many other industries. These businesses will frequently need our advisory services for insurance and tax consultation, asset management, budgeting and financial planning, as well as investment management and auditing.

    5.2.2 Institutions & Organizations:

    Our second target group comprises of various institutions and organizations located in Manhattan including government organizations, schools, colleges, universities, non-profit organizations, religious and cultural institutes as well as social bodies. This group will also need our financial advisory services for addressing all their financial needs as well as in their budgeting and auditing.

    5.2.3 Individuals:

    Our third target group consists of individuals including both the employed and retired persons belonging to all age groups. This group will mostly need our services for getting advice and consultation related to mortgages, pension, retirement and investment.
    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Corporate Sector 48% 22,334 32,344 43,665 52,544 66,432 10.00%
    Institutions & Organizations 18% 11,433 13,344 16,553 18,745 20,545 13.43%
    Individuals 34% 18,322 19,455 20,655 22,867 24,433 15.32%
    Total 100% 52,089 65,143 80,873 94,156 111,410 9.54%

    5.3 Business Target

    Our main goal is to become the best financial advisory service in Chicago within next 10 years. This goal is not something that can be achieved easily. For achieving this goal, we will have to increase our revenue, create an exceptional clientele and establish a name across the country. Our main goal of the business can be divided into three main business targets, which are as follows:

    • To achieve the net profit margin of $10k/month by first year, $15k by second year, and $25k by third year
    • To balance the initial cost of the startup with earned profits by the end of the first year
    • To start an online financial advisory service by the end of the first year

    5.4 Product Pricing

    Product pricing is one of the most important factors in deciding the strategy for financial advisory business. After considering the market demands and our current competition, we have priced all our products in the similar ranges as of our competitors.

    Strategy

    Like marketing analysis, sales strategy is also an important component of financial advisor business plans so it must be given proper attention before you think about creating your own business plan template financial advisor.

    6.1 Competitive Analysis

    As mentioned earlier, there are more than 121,000 financial advisory companies in the United States, so we can say that we have a tough competition ahead. In addition to that, many international and local banking companies also financial consultation services to their customers, thus making this field even more competitive. Although we have a lot of competitors, we hope to surpass all of them by providing exceptional quality services and unparalleled customer experience.

    6.2 Sales Strategy

    • We will carry out a large-scale advertising campaign on social media sites
    • We will offer a 20% discount on our advisory and consultation services for the first three months of our launch
    • We will arrange free financial consultation seminars in various organizations and companies and will thus promote ourselves

    6.3 Sales Monthly

    Our monthly sales from target groups are forecasted as follows:

    Financial Advisor Business Plan - Sales Monthly

    6.4 Sales Yearly

    Our yearly sales from target groups are forecasted as follows:

    Financial Advisor Business Plan - Sales Yearly

    6.5 Sales Forecast

    Our forecasted sales are given in the following column charts.

    Financial Advisor Business Plan - Unit Sales

    The detailed information about the company’s forecasted sales is given in the following table.

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Accounting & Financial Consulting 187,330 260,320 258,240
    Insurance & Tax Consulting 802,370 815,430 823,540
    Budgeting & Financial Auditing 539,320 770230 1,002,310
    Mortgage, Pension & Retirement Consultation 265,450 322,390 393,320
    Investment & Asset Management 1,435,320 1,250,430 1,762,450
    TOTAL UNIT SALES 3,229,790 3,418,800 4,239,860
    Unit Prices Year 1 Year 2 Year 3
    Accounting & Financial Consulting $140.00 $150.00 $160.00
    Insurance & Tax Consulting $600.00 $800.00 $1,000.00
    Budgeting & Financial Auditing $700.00 $800.00 $900.00
    Mortgage, Pension & Retirement Consultation $650.00 $750.00 $850.00
    Investment & Asset Management $140.00 $120.00 $100.00
    Sales
    Accounting & Financial Consulting $214,800 $274,000 $333,200
    Insurance & Tax Consulting $120,050 $194,500 $268,500
    Budgeting & Financial Auditing $50,110 $71,600 $93,000
    Mortgage, Pension & Retirement Consultation $139,350 $194,600 $249,850
    Investment & Asset Management $62,350 $72,300 $82,250
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Accounting & Financial Consulting $0.70 $0.80 $0.90
    Insurance & Tax Consulting $0.40 $0.45 $0.50
    Budgeting & Financial Auditing $0.30 $0.35 $0.40
    Mortgage, Pension & Retirement Consultation $3.00 $3.50 $4.00
    Investment & Asset Management $0.70 $0.75 $0.80
    Direct Cost of Sales
    Accounting & Financial Consulting $98,300 $183,000 $267,700
    Insurance & Tax Consulting $66,600 $119,900 $173,200
    Budgeting & Financial Auditing $17,900 $35,000 $52,100
    Mortgage, Pension & Retirement Consultation $19,400 $67,600 $115,800
    Investment & Asset Management $27,700 $69,200 $110,700
    Subtotal Direct Cost of Sales $294,100 $699,400 $1,104,700

    Personnel plan

    Personnel plan is an important part of a business plan for financial advisor services since it gives an estimate about the staff you require along with their salaries. Martin has developed the following personnel plan for his company.

    7.1 Company Staff

    Martin will act as the General Manager of the company and will initially hire following people:

    • 1 Accountant to maintain financial and other records
    • 2 Sales Executives responsible to market and discover new ventures
    • 6 Financial Analysts to provide advice on various financial matters
    • 2 Insurance Consultant to provide consultation on insurance services
    • 2 Customer Representatives to interact with customers
    • 1 Front Desk Officer to act as a receptionist

    All employees will be hired by following strict testing procedures and all of them will undergo 2 weeks training prior to onboarding.

    7.2 Average Salary of Employees

    The estimated salaries of the staff required are given in the following table. These salaries can deviate slightly but the total sum will nearly be the same.

     Personnel Plan      
    Year 1 Year 2 Year 3
    Accountant $85,000 $95,000 $105,000
    Sales Executives $85,000 $92,000 $109,000
    Financial Analysts $166,000 $173,000 $180,000
    Insurance Consultants $95,000 $105,000 $115,000
    Customer Representatives $63,300 $70,000 $76,700
    Front Desk Officer $20,000 $23,300 $30,000
    Total Salaries $429,300 $463,300 $510,700

    Financial Plan

    Just like the other plans, you must also prepare a detailed financial plan covering all financial aspects of your financial advisory startup. The financial plan should present a detailed map of the costs of startup, inventory, payroll, equipment, rent, utilities and how these costs will be covered by the earned profits. Also, make sure to carry out a detailed profit and loss analysis of your startup venture. While developing the financial plan, you can take help from various financial advisor business plan examples available online so as to know which things to include in it. Martin has developed the following financial plan for his company.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

    8.2 Brake-even Analysis

    Financial Advisor Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159,740
    Assumptions:
    Average Per-Unit Revenue $260.87
    Average Per-Unit Variable Cost $0.89
    Estimated Monthly Fixed Cost $196,410

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $309,069 $385,934 $462,799
    Direct Cost of Sales $15,100 $19,153 $23,206
    Other $0 $0 $0
    TOTAL COST OF SALES $15,100 $19,153 $23,206
    Gross Margin $293,969 $366,781 $439,593
    Gross Margin % 94.98% 94.72% 94.46%
    Expenses
    Payroll $138,036 $162,898 $187,760
    Sales and Marketing and Other Expenses $1,850 $2,000 $2,150
    Depreciation $2,070 $2,070 $2,070
    Leased Equipment $0 $0 $0
    Utilities $4,000 $4,250 $4,500
    Insurance $1,800 $1,800 $1,800
    Rent $6,500 $7,000 $7,500
    Payroll Taxes $34,510 $40,726 $46,942
    Other $0 $0 $0
    Total Operating Expenses $188,766 $220,744 $252,722
    Profit Before Interest and Taxes $105,205 $146,040 $186,875
    EBITDA $107,275 $148,110 $188,945
    Interest Expense $0 $0 $0
    Taxes Incurred $26,838 $37,315 $47,792
    Net Profit $78,367 $108,725 $139,083
    Net Profit/Sales 30.00% 39.32% 48.64%

    8.3.1 Profit Monthly

    Financial Advisor Business Plan -Profit Monthly

    8.3.2 Profit Yearly

    Financial Advisor Business Plan - Profit Yearly

    8.3.3 Gross Margin Monthly

    Financial Advisor Business Plan - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Financial Advisor Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Financial Advisor Business Plan - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $40,124 $45,046 $50,068
    Cash from Receivables $7,023 $8,610 $9,297
    SUBTOTAL CASH FROM OPERATIONS $47,143 $53,651 $59,359
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $47,143 $53,651 $55,359
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $21,647 $24,204 $26,951
    Bill Payments $13,539 $15,385 $170,631
    SUBTOTAL SPENT ON OPERATIONS $35,296 $39,549 $43,582
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35,296 $35,489 $43,882
    Net Cash Flow $11,551 $13,167 $15,683
    Cash Balance $21,823 $22,381 $28,239

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $184,666 $218,525 $252,384
    Accounts Receivable $12,613 $14,493 $16,373
    Inventory $2,980 $3,450 $3,920
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $201,259 $237,468 $273,677
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $12,420 $14,490 $16,560
    TOTAL LONG-TERM ASSETS $980 $610 $240
    TOTAL ASSETS $198,839 $232,978 $267,117
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $9,482 $10,792 $12,102
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $9,482 $10,792 $12,102
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $9,482 $10,792 $12,102
    Paid-in Capital $30,000 $30,000 $30,000
    Retained Earnings $48,651 $72,636 $96,621
    Earnings $100,709 $119,555 $138,401
    TOTAL CAPITAL $189,360 $222,190 $255,020
    TOTAL LIABILITIES AND CAPITAL $198,839 $232,978 $267,117
    Net Worth $182,060 $226,240 $270,420

    8.6 Business Ratios

     Ratio Analysis        
    Year 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    Total Debt to Total Assets 2.68% 1.04% 0.76% 67.10%
    Pre-tax Return on Net Worth 66.83% 71.26% 75.69% 4.40%
    Pre-tax Return on Assets 64.88% 69.75% 74.62% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19.20% 21.16% 23.12% N.A.
    Return on Equity 47.79% 50.53% 53.27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

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