Questions to ask yourself when considering your financial advisor business model

financial advisor business model

Questions to Ask Yourself When Considering Your Financial Advisor Business Model

As a Coach for Financial Advisors, I know a lot is required for you to set up a successful financial advisory business. You should always be ready to sacrifice your time and resources to ensure that your practice set up with the right business model. Coming up with an ideal business model is one of the things you can do.

What is a Business Model?


It is also a method by which you decide to support your business’s profitability, providing information on how you operate, how you earn, and how you intend to achieve your goals by generating value for customers. All the processes and company policies that a business adopts and follows are part of the business model.

To establish a valid model, you would need to know who your customer is, what value you can generate, how you want to extract this value, and how you can do it while keeping costs reasonable. Therefore, a business model describes how your financial advisory practice creates, delivers, and acquires value for itself and the customer.

A good business model is essential for all types of businesses and it’s especially important for financial advisor businesses.
Coming up with a good business model for your financial advisory firm can help you sail through smoothly in your quest to acquire clients. Before you rebrand your business, there are several questions you need to ask yourself to define the right business model for you.

The answers will give you a better sense of direction and help you determine the right approach. Here are questions to ask yourself when opting for a financial advisory business model.

Are You an Investment Manager or Portfolio Manager?

The role of an investment manager is to manage the client’s assets together with the clients. Portfolio management is one area of investment management that mainly specializes in managing the assets. You have to establish what you want to specialize in to choose the right business model as a financial advisor.

Are You an Advisor to Elite Investors?

You also have to identify the group you want to deal with. Elite financial advisors offer different services than most advisors because they deal with high net worth clients who have different financial goals than less wealthy clients. Understanding this will help you settle for the perfect business model for your financial advisory firm.

Relationship Manager to the Affluent?

The role of a relationship manager is to build and maintain proper relationships with clients. A good affluent relationship manager is vital for your financial advisory firm.
This is because you may be dealing with wealthy or high net worth clients. You must consider this to have an easy time setting up your business model.

An Asset Gatherer Focusing on Prospecting?

Asset gatherers value client relationships the most. They love helping their clients achieve their goals and go on a journey with them.  It is even better if you are focused on prospecting because this can help prospective clients plan and know what to expect. This is one thing you need to establish to set up a good business model for your financial advisory firm.
An asset gatherer will be the point person or the rainmaker setting up appointments, meeting with centers of influence, meeting with prospective clients, following up with contacts in their pipeline.

A Financial Planner or Per Project Planner?

Do you plan to base your quotes on the number of hours a specific project is intended to take? This is what per project planners do. Financial advisors mostly charge on an hourly rate. You have to establish where you stand or how you plan to base your quote when setting up your business model.

Monthly Retainer?

A monthly retainer is an amount a client is supposed to pay in advance to guarantee your services will be available to them for an extended period.  They are always required to pay a certain sum upfront every month for you to work with them on a long term project. You should be clear about this in your financial advisory firm to come up with the best business model.

Assets Under Management?

Asset Under Management fee or AUM is the amount your financial advisory firm will charge as a percentage of the price of the assets you are managing for a specific client. This is usually charged quarterly.

To calculate this, you have to take the full market value of the assets you are managing on behalf of a specific client or investor and multiply it by the fee percentage. You have to come up with a fair rate to attract more clients. Determining this will help you set up a good business model for your firm.

Benefits of a Good Financial Advisor Business Model

The Business Model acts as a model of your firm and defines a roadmap for its success (or failure) as it explains how it creates and acquires value through decisions and processes of which it is composed.

Previously, when there were not many competitors on the market, entrepreneurs used to start a business, and its model evolved by itself over time.

However, as the number of players in the market has grown, developing a business model has become necessary to decide how to operate, connect with customers, and differentiate in the market. That is to say; the business model motivates customers to choose your offer over the others available.

The Relevance of Customer Value When Choosing a Business Model

A question you need to answer when choosing your business model is the following: “How much value does a potential customer get by adopting your solution?” Think in terms of the impact it will have on their life.

Does it finally help them solve a problem they have struggled with for years? Will it allow them to get closer to achieving a goal? If you focus on which business model will be most profitable for you while neglecting the customer, you won’t get very far.
Customers are the lifeblood of every enterprise, and their wants and needs must be at the heart of every business. Understanding your customers’ wishes will help you determine how best to approach the sale and what price they will be willing to pay.

Knowing the PAIN, a specific problem costs your audience and how much they are willing to pay to find a solution is a matter of knowing the amount a specific problem costs your audience. Always aim to give a higher value to the price you are asking.
If customers feel like they’re getting a lot of value for their investment, your business will thrive quickly, and your business model will be successful.

Final Thoughts

This is very important when looking for a business model that will work correctly for your financial advisory firm. A good business model will guide you on different things you will do and help you understand how to deal with your clients. Pay attention to the above factors to choose a model that will work well for your firm.


6 habits that make a successful financial advisor

6 Habits That Make a Successful Financial Advisor

6 Habits That Make a Successful Financial Advisor

As a Coach for Financial Advisors, I often discuss with my clients what habits are crucial to success in the financial planning field.

Being a financial advisor allows you access to a whole range of incredible rewards – both professionally and personally – as an occupation with incredible career progression opportunities, and an essentially unrestricted earning potential, all while you’re able to help people save for their future.

Having said this, there’s a huge gap between the top earners in the industry, and those at the bottom of the pile. Moreover, many new financial planners don’t make it past the first year, failing to garner enough clients – and make enough money – to go the whole way.

So, what separates the success stories from the cautionary tales? The answer could lie in these 6 daily habits that the most successful financial advisors abide by.

Financial Advisor Success #1 – Waking up early

Wire house advisors and independent advisors alike know that getting to the office early is crucial  If you’ve read any articles about success before, then you’re bound to have come across this tip – probably a number of times – and with good reason.

Waking up a couple of hours before the workday begins allows you to spend time on personal projects, do some exercise, and/or plan the rest of your day.

Doing this allows you to arrive at your office feeling refreshed, alert and motivated, bolstered by the personal successes of your morning, and allowing you to do the best possible job you can do.

Financial Advisor Success #2 – Doing mindless admin tasks in the evening

The most successful financial advisors use the limited time in their working day effectively – and they conduct their working day in a similar way.

Rather than using their precious daytime hours to create a list of prospects, reply to emails, or complete any other task that isn’t mentally demanding, they spend these crucial hours to do two things: meet clients and prospects, or tackle some marketing, since these tasks are more cognitively demanding, and directly related to their turnover.

On the other hand, they save mindless admin for when the working day is over, to ensure the best possible start for the next day.

Financial Advisor Success #3 – They invest in themselves

One thing that successful financial advisors have in common – and successful people in general, for that matter – is that they invest in themselves, and in their career.

The most successful financial advisors take the time – and the money – to develop themselves personally and professional. This can include taking courses, enrolling in coaching sessions, attending conferences, learning more about Social Media Marketing, and more.

Not only can this improve yourself as a financial advisor – and even as a person – but these things can help you to make valuable connections in the financial advising sphere.

Financial Advisor Success #4 – They make it a habit to call ‘just one more’

Part of your Marketing Plan is making phone calls, right?

When the most successful, prolific financial advisors have packed up their things – and are just about ready to leave the office – they make one more call to a prospect.

Each month, this can add up to scores of new prospect-to-client conversions, and this can lead to a skyrocketed monthly income, helping the most successful financial advisors to shoot past their peers in terms of business growth.

Financial Advisor Success #5 – They surround themselves with like-minded people

The quote from Jim Rohn, ‘You are the average of the five people you spend the most time with’ has become a commonplace idiom in the world of business, productivity and self-help. And, while the quote could be accused of harnessing motivational hyperbole, the people you surround yourself with do make a difference to your life trajectory.

For example, if you surround yourself with determined, ambitious people who inspire you, then you’re more likely to be motivated to be the best financial planner that you can be.

Moreover, lots of financial advisors meet up in study groups that allow them to collaboratively find solutions to problems they face, in addition to sharing knowledge and boosting motivation.

And, surrounding yourself with these kinds of people can – similarly – put you in the path of other influential people, making them a valuable networking commodity.

Financial Advisor Success #6 – They make goals

In order to achieve success, it’s essentially to qualify what success looks like to you, when it should be achieved by, as well as a plan to illustrate how you’re going to make it happen.

The most successful financial advisors have monthly and yearly goals, and an action plan to accompany them. More than simply having goals, they figure out exactly what steps they need to take to achieve the success they want. This can relate to earnings, number of new converted prospects per month, business operations, or anything else.

Having goals ensures that your priorities are kept top of mind, and enables you to track your progress, a allowing you to see whether you need to adjust your working behavior in order to meet the targets you set for yourself.

Final Thoughts

So, if you want to be the most successful financial advisor you can be, consider incorporating these 6 habits into your life, and watch your success skyrocket.

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