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How to Start a Financial Coaching Business

Do you want to start a financial coaching company? If YES, here is a complete guide to starting a financial coaching business with NO money and no experience. If you are already in the financial industry or you have a degree or background in finance, then you can build a career as a certified financial advisor or coach by establishing a financial coaching firm. Becoming a certified financial advisor or coach might not come cheap, but it is worth pursing if indeed you want to earn big in the financial industry.

The truth is that starting a financial coaching firm is a rewarding business venture as demand for certified financial advisors or coaches is on the increase. Statistics has it that there are approximately 272,000 certified financial advisors / coaches in the united states.

On the average, the salary per annum for financial advisors in the United States is $67,520. The lowest ten percent of earners in this field make less than $32,280 and the top ten percent make more than $187,200.

You can be sure that your services would always be in demand by those small businesses, corporate organizations and individuals that can’t afford to hire the services of well – established financial consultants. They know that it would save them cost and one good thing about it is that you can handle up to 20 clients per time depending on how organized and hardworking you are.

If you have been pondering on starting your own financial coaching firm, but do not know how to go about it, then you should go through this article, it will give you the needed guide and direction.

19 Steps to Starting a Financial Coaching Business

1. Understand the Industry

Financial coaching firm is under the financial planning & advice industry and establishments in this industry basically provide financial planning, financial advice and wealth management to clients. Financial coaches also offer advice, in conjunction with other activities such as portfolio management, protection planning and brokerage services.

Please note that the financial planning & advice industry does not include mutual fund companies, hedge funds, discount brokers, insurance brokers or other companies that deliver these services, outside the context of a written financial plan.

To qualify for inclusion in this industry, these products and services must be provided in the context of a written financial plan. In fact, according to the Investment Advisers Association, an estimation two-thirds of firms registered with the Securities and Exchange Commission are not engaged in any business other than giving financial advice. Financial planning provides tools to identify a client’s current situation and future goals and then proposes recommendations to meet those goals.

The Financial Planning & Advice industry that financial coaching firm is a part of is a thriving sector of the economy of the United States of America and the industry generates over over $55 billion annually from more than 51,73 registered and licensed financial coaching companies scattered all around the United States of America.

The industry is responsible for the employment of over 141,733 people. Experts project the industry to grow at a 5.4 percent annual rate between 2013 and 2018. It is important to state that Ameriprise Financial Inc., Bank of America and Morgan Stanley Wealth Management are the organizations with the lion share of the available market in the industry.

A recent report published by IBISWorld shows that growth in the Financial Planning and Advice industry has compounded swiftly over the five years to 2018. Advisers generate revenue in a variety of ways, including financial planning fees, investment commissions, insurance commissions and other fees.

Over the past five years, economic growth and rising employment has pushed the industry upwards. Over the five years to 2023, revenue is projected to continue to increase as financial markets improve.

IBISWorld forecasts that the growing number of affluent households and rising equity markets will help increase total assets under management for the industry and raise revenue generated from fees charged on the value of assets under management.

Some of the factors that encourage entrepreneurs to start their own financial coaching business include that the business has low level entry requirements and it can be started with very little startup capital especially if you choose to start from the comfort of your home.

Finally, with financial coaching business, you can afford to partner with other smaller firms that are into finance and investment related services. You can partner with mutual fund companies, hedge funds, discount brokers, insurance brokers or other companies. The bottom line is that if you have a robust network and you are well positioned, you can indeed maximize your financial coaching business.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who require the services of financial coaching firms cut across individuals, households, corporate organizations, investors and business owners cum entrepreneurs who need advice and guidance to sort out financial related issues.

So, if you are looking towards defining the demographics of your financial coaching business, then you should make it all encompassing. It should include corporate organizations, corporate executives, investors, retirees and pensioners, startups, and households within and outside the city you are operating in who have the capacity to pay for your services.

3. Decide Which Niche to Concentrate On

Most financial coaching firms tend to operate the general services that a standard financial coaching firm is expected to offer. This is why it seems that there are no niche areas in the industry. But on the other hand, some financial coaching firm may decide to major in some key areas or niche area such as;

  • General financial coaching services
  • Business and government financial planning and management
  • Personal financial planning and advice
  • Personal investment management
  • Fee-based financial investment advice services
  • Financial planning services
  • Other financial related services such as portfolio management, protection planning and brokerage services
The Level of Competition in the Industry

The level of competition in the financial planning & advice industry depends largely on your area of specialization and how big and organized your firm is.

The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or services properly, you will always make headway in the industry. Just ensure you have what it takes to coach aright and to proffer the right solution to people and organizations’ financial concerns.

4. Know Your Major Competitors in the Industry

In every industry, there are always brands who perform better or are better regarded by customers and general public than the others.

Some of these brands have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years. These are some of the leading financial coaching firms in the United States of America and also in the globe;

  • Wiser Financial Coaching, LLC
  • ProWise Financial Coaching
  • Ur Y Financial Coaching & Services, LLC
  • Financial Coach Group
  • Waller Financial Coaching, Inc
  • Rigby Financial Group
  • Coaching in the Moment | Cylient‎
  • Wholistic Financial Solutions
  • Don W. Anthis, CPA
  • Dave Ramsey
  • Financial Liberty Network
  • Abundance Financial Coaching LLC
  • The Financial Coaching Centre
Economic Analysis

When it comes to starting a financial coaching services firm, you just have to get your feasibility studies and market research right before venturing into the business. It is good to mention that financial coaching services business is not for rookies; it is for professionals who have the required experience and expertise to proffer solutions to financial concerns.

Starting this kind of business entails that you acquire the required education and professional certifications and also build good working relationship with stakeholders in the industry. Depending on the scale at which you want to start, you might require as much as multiple thousands of dollars, and at the same time you might need far less than that if you choose to start the business from your home, a virtual office and shared office space.

5. Decide Whether to Buy a Franchise or Start from Scratch

When it comes to starting a business of this nature, it will pay you to buy the franchise of a successful financial coaching firm as against starting from the scratch. Even though it is relatively expensive buying the franchise of an established financial coaching firm, but it will definitely pay you in the long run.

But if you truly want to build your own brand after you must have proved your worth in the financial planning & advice industry, then you might just want to start your own financial coaching services firm from the scratch. The truth is that it will pay you to start your financial coaching services firm from the scratch.

Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business. Please note that most of the successful financial coaching firms round started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.

6. Know the Possible Threats and Challenges You Will Face

If you decide to start your own financial coaching services firm today, one of the major challenges that you are likely going to face is the presence of well – established financial coaching firms and also other related financial based and advisory businesses who are offering same services that you intend offering. The only way to avoid this challenge is to create your own market.

Some other threats that you are likely going to face as a financial coaching firm operating in the United States are unfavorable government policies, the arrival of a competitor within your location of operation and global economic downturn which may affect businesses such as financial coaching services firm. There is hardly anything you can do as regards these threats other than to be optimistic that things will continue to work for your good.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

When considering starting a financial coaching firm, the legal entity you choose will go a long way to determine how big the business can grow.

Usually, you have the option of choosing a general partnership, or limited liability company for your financial coaching firm. Ordinarily, general partnership should have been the ideal business structure for a small – scale financial coaching firm especially if you are just starting out with a moderate startup capital.

But if your intention is to grow the business and have clients from all across the United States of America and other countries of the world, then choosing general partnership is not an option for you. Limited Liability Company, LLC will cut it for you.

Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.

These are some of the factors you should consider before choosing a legal entity for your financial coaching services firm; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.

If you take your time to study the various legal entities to use for your financial coaching firm, you will agree that limited liability company; an LLC is the most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or a ‘S’ corporation especially when you have the plans of going public.

Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your financial coaching services firm so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.

8. Choose a Catchy Business Name

When it comes to choosing a name for a business, it is expected that you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. If you are considering starting your own financial coaching firm, here are some catchy names that you can choose from;

  • Johnson & Johnson® Financial Coaching Services, LLC
  • Sean Princeville Financial Coaching Services, LLC
  • Douglas & Williams Financial Coaching Firm, LLP
  • Mike Sanders & Co Financial Advisory Services, LLP
  • Andrew Morgan Financial Coaching Services Company, Inc.
  • Lance Maxwell & Associates Financial Advisers & Coaches, LLP
  • Pinnacle Financial Coaching & Advisory Services Group
  • Little Rock Financial Coaching Services, LLC
  • Sarah Jael & Co Financial Advisors, LLP
  • Blue Gates Financial Coaching Services, Inc.

9. Discuss with an Agent to Know the Best Insurance Policies for You

In the United States of America and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate policies for your financial coaching firm.

Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own financial coaching services firm in the United States of America;

  • General insurance
  • Risk Insurance
  • Financial reinsurance
  • Health insurance
  • Liability insurance
  • Workers Compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance
  • Payment protection insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

If you are considering starting your own financial coaching services firm, usually you are required to file for intellectual property protection/trademark because the nature of the business makes it possible for you to challenge organizations and individuals in court for illegally making use of your company’s intellectual properties.

So also, if you want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.

11. Get the Necessary Professional Certification

Aside from the result oriented financial advice you give to your clients, professional certification is one of the main reasons why most financial coaching services stand out. If you want to make an impact in the industry, you should work towards acquiring all the needed certifications in your area of specialization.

Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in this competitive market. These are some of the certifications you can work towards achieving if you want to run your own financial coaching services firm;

  • FFC Financial Fitness Coach – AFCPE
  • Certified Financial Coach™
  • Certified Money Coach (CMC)®
  • Certified Financial Planner® (CFP®)
  • Chartered Financial Analyst (CFA®)
  • Certified Fund Specialist (CFS)
  • Chartered Financial Consultant (ChFC)
  • Chartered Investment Counselor (CIC)
  • Certified Investment Management Analyst (CIMA)
  • Chartered Market Technician (CMT)
  • Certified Public Accountant and Personal Financial Specialist (CPA and PFS)
  • Chartered Retirement Plans Specialist, or CRPS
  • Degree in Finance Related Courses

Please note that you cannot successfully run a financial coaching services firm in the United States without necessarily acquiring professional certifications and business license even if you have adequate experience cum background in the financial services industry.

12. Get the Necessary Legal Documents You Need to Operate

The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized especially a financial coaching services firm. It is a fact that you cannot successfully run any business in the United States without the proper documentations.

If you do, it won’t be too long before the long hand of the law catchups with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own financial coaching services firm in the United States of America;

  • Certificate of Incorporation
  • Federal Tax Payer’s ID
  • State Permit
  • Business License and Certification
  • Business Plan
  • Non – disclosure Agreement
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Consulting contract documents
  • Online Terms of Use
  • Online Privacy Policy Document
  • Apostille (for those who intend operating beyond the United States of America)
  • Company Bylaws
  • Insurance Policy
  • Memorandum of Understanding (MoU)

13. Raise the Needed Startup Capital

Aside from the required certifications and hands-on experience, starting a financial coaching firm can be cost effective. Securing a standard office in a good business district, equipping the office and paying your employees are part of what will consume a large chunk of your startup capital.

When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business or to partner with you.

Here are some of the options you can explore when sourcing for startup capital for your financial coaching firm;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for loan from your bank/banks
  • Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
  • Source for soft loans from your family members and your friends.

14. Choose a Suitable Location for your Business

Financial coaching firms and most coaching based type of businesses require that you see physically with your clients hence it must be located in good location; a location that is prone to both human and vehicular traffic and a location that is at the epicenter of a business district if indeed you want to attend to loads of clients and maximize profits from the business.

The fact that you can operate your financial coaching services firm from any part of the world does not mean that location has little influence on the success of your business. If you have taken your time to study financial coaching firms, you will realize that those businesses are willing to pay expensive rents in order to stay in a busy business district.

If you make the mistake of renting or leasing a facility for financial coaching services firm in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential clients.

It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for your financial coaching business, then you should talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your firm.

So, if you are looking for a location for your financial coaching services firm, ensure that it is a place that is located in a business district in your city, a place that is visible and easily accessible. Of course, you would not want to locate this type of business in the outskirt of town. Your clients should be able to drive down and locate your office with little or no difficulty.

These are some of the key factors that you should consider before choosing a location for your financial coaching services firm;

  • The demography of the location
  • The demand for the services of financial coaching services firm related businesses in the location
  • Accessibility of the location
  • The number of financial coaching services firms and related businesses in the location
  • The local laws and regulations in the community / state
  • Traffic, parking and security.

15. Hire Employees for your Technical and Manpower Needs

On the average, there are no special technology or equipment needed to run this type of business except for customized financial planning software and other financial related software apps and social media management software applications. You will also need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves).

When it comes to choosing between renting and leasing an office space, the size of the financial coaching services firm you want to build, and your entire budget for the business should influence your choice. If you have enough capital to run a standard financial coaching services firm then you should consider the option of leasing a facility for your office; when you lease, you will be able to work with long – term planning, structuring and expansion.

As regards the number of employees that you are expected to start the business with, you would need to consider your finance before making the decision. Averagely, you would need a Chief Executive Officer/Lead Financial Coach cum Advisor, Financial Advisors, Financial Risk Analyst, Legal Secretary, Admin and HR Manager, Business Developer, Accountant, Customer Service Executive/Front Desk Officer.

Over and above, you would need a minimum of 5 to 10 key staff to effectively run a medium scale but standard financial coaching firm. Please note that there will be times when you are expected to go out of your way to hire experts to help you handle some high – profile clients especially from big corporations.

The Service Delivery Process of the Business

The way financial coaching firms work vary from one agency to another, but ideally, a financial coaching firm is expected to first and foremost build a robust company profile before sourcing for clients.

Depending on the agreement reached by both parties, you are expected to come up with measurable indices that will show that the financial advice you gave or financial products sold is indeed producing results. In some cases, the agreed coaching fee will be paid in part and in some cases, it will be paid in full and upfront.

It is important to state that a financial coaching firm may decide to improvise or adopt any business process and structure that will guarantee them, good return on investment (ROI) efficiency and flexibility; the above stated business cum services process is not cast on stone.

16. Write a Marketing Plan Packed with ideas & Strategies

As a financial coaching services firm, you would have to prove your worth over and over again before attracting clients to hire your services. So, if you have plans to start your own financial coaching services firm, it will pay you to first build a successful career in the alternative financial services industry.

People and organizations will only hire your services or purchase your product if they know that they are going to get good returns on their investment or solve their financial related challenges.

So, when you are drafting your marketing plans and strategies for your financial coaching services firm, make sure that you create a compelling personal and company profile. Aside from your qualifications and experience, it is important to clearly state what you have been able to achieve in time past as it relates to the financial advisory services industry and the organizations you have worked for in time past.

This will help boost your chances in the market place when sourcing for clients/investors. Please note that in most cases, when sourcing for clients from corporate organizations and other institutions, you will be called upon to defend your proposal, and so you must be pretty good with presentations.

Here are some of the platforms you can utilize to market your financial coaching services firm;

  • Introduce your business by sending introductory letters alongside your brochure to all the corporate organizations, corporate executives, investors, retirees and pensioners, startups, entrepreneurs, and households within and outside the city you are operating in who have the capacity to pay for your services
  • Advertise your business in relevant financial magazines, radio stations and TV stations (make yourself available for financial consulting services related talk shows and interactive sessions on TV and Radios)
  • List your business on local directories / yellow pages
  • Attend international financial expos, seminars, and business fairs et al
  • Create different packages for different category of clients in order to work with their financial needs
  • Leverage on the internet to promote your business
  • Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
  • Engage the services of marketing executives and business developers to carry out direct marketing

17. Work Out a Reasonable Pricing for your Services & Products

One key factor that will help you offer your services at a price that is attractive is to ensure that you source your working capital from sources that won’t put pressure on you or give you high interest rate.

Another strategy that will help you offer your services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products and services.

You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.

18. Brainstorm Possible Ways to Retain Clients & Customers

When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your services delivery, they can hardly source for alternative service provider or products.

Statistics has it that one of the major reasons why clients source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service.

If you can continue to improve on return on investment (ROI) for people that hire your services and your customer service delivery, then you won’t struggle to maintain loyal customers.

Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building loyal clientele base, you should purchase a customized CRM software.

With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).

19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.

If your intention of starting a financial coaching services firm is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.

In promoting your brand and corporate identity, you should leverage on both print and electronic media and also social media (the internet). As a matter of fact, it is cost effective to use the internet and social media platforms to promote your brands, besides it is pretty much effective and wide reaching.

Below are the platforms you can leverage on to boost your brand and promote and advertise your financial coaching services firm;

  • Place adverts on financial related magazines and newspapers, radio and TV stations.
  • Encourage the use of word of mouth publicity from your loyal customers
  • Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Google+ and other platforms to promote your business.
  • Ensure that you position your banners and billboards in strategic positions all around your city
  • Distribute your fliers and handbills in target areas in and around our neighborhood
  • Advertise your business in your official website and employ strategies that will help you pull traffic to the site
  • Brand all your official cars and ensure that all your staff members and management staff wear your branded shirt or cap at regular intervals.