Banking

Hit The Ground Running: How Advisors Ace The First Year In Business

Instant success eludes most advisors. Typically, they face an initial rough patch before they gain the confidence — and clients — to thrive.




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The first year can prove a whirlwind for advisors who launch their own firm. They’re hit with myriad challenges, from completing the registration process to finalizing their business model to finding clients.

Advisors who persevere through the first year often credit their diligent planning. Before setting up shop, they research the technology they’ll need, the brand identity they seek and the type of practice they want to operate.

But they don’t stop there. A big part of preparation involves setting goals for client acquisition while sticking to a budget to contain their startup costs.

Aaron Agte, a certified financial planner in Foster City, Calif., opened his firm in 2019. He sought to acquire four to five clients per year to offset his prior salary as director of financial planning at a wealth management firm.

“I knew I wanted a lifestyle practice with a maximum of 50 clients,” he said. He set a revenue target and identified the average revenue per client that he needed to meet his goals.

Along with his careful planning, Agte remained open to unplanned opportunities as they arose during his first year in business. For example, a San Francisco company wanted to hire an advisor to speak to its workforce about stock options, college planning and other financial issues.

“I wasn’t planning on being a public speaker at companies,” he said. “But I said yes and did a series of talks for them. They paid for my time and expenses. I also got one client from it.”

Peer Support Provides Morale Boost

Even if you map out an effective strategy for your new firm, success can come slowly. Entrepreneurs often experience hiccups along the way.

Agte, 38, endured a five-month stretch in which he didn’t land a client despite his best marketing efforts. He recalls undergoing a “crisis of confidence” as he began to doubt his strategic plan.

“If I had lowered my fee, some prospects I met with probably would’ve hired me,” he said. “I started to wonder if my fee was too high.”

In the months before launching his firm, he joined XY Planning Network, a membership organization. He met other advisors starting their own practice and compared notes with them.

“They reminded me of what I wanted to do and gave me rational, unemotional feedback,” Agte said. “That was a morale boost. What’s important is you’re set up with other advisors who are doing what you’re doing. It’s not a spouse or your friends. It’s peers who understand the context of what you’re going through.”

The freedom that lures many advisors to run their own business can prove a double-edged sword. One reason Agte wanted to operate his own firm was to control his schedule and spend time with his kids when they played after-school sports.

“In the first year, you have so much extra time available and you’ve lost all the social components your former office provided,” he said. “It’s easy to get lost in your head” and get diverted from high-priority tasks. But Agte allocated his time wisely and finished his first year with four clients — on track with his goal.

Hire Freelancers To Provide Expertise

Some advisors try to launch their firm on a shoestring budget. But sometimes it’s better not to skimp — and set aside sufficient funds for business expenses that produce a predictable payoff.

While Agte knew his savings could carry him for at least a year, other advisors maintain a partial income stream as they transition to self-employment.

Anthony Watson, a certified financial planner in Dearborn, Mich., left his job as chief investment officer at a large financial advisory firm to launch his own practice. But he continued to provide consulting to his old employer for a few months while he set up his independent firm.

He says those early months required “an insane amount of work” to build his brand, devise a marketing plan and refine his service offering.

“You have to outsource some things, even if you think you’re good at it,” Watson said. And the costs can add up.

Watson, 46, hired a marketing consultant and website designer. Because he runs a virtual practice, he was comfortable working with freelancers from afar.

“Finding independent contractors through websites like Upwork was invaluable to me,” he said.

Watson found that working with outside experts helped him craft his business plan. They asked him to describe his target market and what messages he wanted his firm’s logo to convey.

“It’s a great exercise to answer those kind of tough questions,” he said.

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