Do you want to start a financial consulting firm? If YES, here is a complete guide to starting a financial consulting business with NO money and no experience.
Okay, so we have provided you an in-depth sample financial consulting business plan template. We also took it further by analyzing and drafting a sample financial consulting services marketing plan backed up by actionable guerrilla marketing ideas for financial consulting businesses. In this article, we will be considering all the requirements for starting a financial consulting business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- 1 Why Start a Financial Consulting Firm?
- 2 Starting a Financial Consulting Firm – Market Research and Feasibility Studies
- 3 Starting a Financial Consulting Firm – Legal Matters
- 4 Is Professional Certification Needed to Run a Financial Consulting Firm?
- 5 Starting a Financial Consulting Firm – Technical & Manpower Details
- 6 Starting a Financial Consulting Firm – The Marketing Plan
Why Start a Financial Consulting Firm?
In case you don’t know, there are loads of small businesses that do not possess the slightest accounting skills. These businesses struggle with their books and accounting concerns a lot. Research shows that one of the reasons why many small businesses remain small and sometimes close shop is not because they don’t have clients or capital to run the business but because they fail to keep their books properly. If you are an accountant, then you can leverage on this to start your own financial consulting services firm.
You can be rest assured that your services would always be in demand not only by small businesses that can’t afford to hire a full time accountant, but also medium scale and big corporations especially for auditing purposes and other financial consulting services. The good thing is that you can handle up to 20 clients per time depending on how organized and hardworking you are.
Just like most businesses, the financial consulting services industry is open to as many people that are interested in the industry as long as you have what it takes to run a financial consulting services firm. Even if you don’t have the finance and other requirements for starting a standard financial consulting services firm, you can come into the industry as a small financial consulting firm servicing mom and pop businesses in your neighborhood.
If you have decided to start a financial consulting services firm, then you should must make sure that you carry out thorough feasibility studies and also market survey. This will enable you properly locate the business in a community or city with the right demography; a location that can readily accept your services.
So, if you have done the required feasibility studies and market research, then you might want to venture into this business.
Starting a Financial Consulting Firm – A Complete Guide
- Industry Overview
Talking about the financial services industry wouldn’t be complete without first talking about the financial advisers cum financial consulting business. The basic responsibility of financial consulting firms is to offer their clients financial services, subject to the licenses/professional certifications they possess and the training they have had. A financial adviser cum consultant may create financial plans for clients or sell financial products, or a combination of both.
Furthermore, financial consulting firms provide their customers with specialist advice on how to manage their finances. They carry out their jobs by researching the marketplace and recommending the most appropriate financial products and services available. They also ensure that their clients are aware of the product and also understand the product that best meet their needs and before sealing a business deal.
Financial advisers cum consultants are known to sell financial products such as; employee pension schemes to companies or offering mortgage, pension or investment advice to private clients who can afford it. Some financial consulting firms are generalists; they offer financial related advice to clients in all of these areas, as well as saving plans and insurance.
The financial consulting industry is expected to be one of the fastest-growing industries over the next decade, with a projected growth rate of 30 percent through 2024, based on the report released by the Labor Department. That obviously is an additional 73,900 new positions on top of the 249,400 jobs financial advisers held in 2014. So also, the retirement of baby boomers in need of financial planning advice will facilitate appreciable growth in the industry.
If you are tinkering with the idea of becoming a financial adviser or starting a financial consulting business, you would need to acquire financial expertise. Basically, you would need a bachelor’s degree in a finance or business related course. Asides from a bachelor’s degree in a related financial discipline, you would also need professional certifications.
Basically, The Certified Financial Planner exam is required because a distinction in it looks good to clients. You can also acquire other related designations if you want to specialize in certain areas of financial planning. For example, you can complete the necessary certification exam to acquire the Chartered Retirement Plans Specialist, or CRPS, designation.
Over and above, as a financial consulting firm, your core responsibility is to improve your client’s finance by effecting changes in response to your analysis; you should be able to change the fortune of their finances within an agreed time line.
Individuals and even organizations are willing to pay expensive fees as long as they are going to get results. No business person will be willing to pay you for a financial consulting service if you don’t have a track record that shows that you know what you are doing. It is one thing to convince a client to patronize your financial consulting services and it another thing for you to deliver solutions as agreed.
The fact that financial consulting services firms can easily be found in cities in the United States of America, does not in any way mean that the industry is over saturated. The fact that there are people and organizations out there who would always need financial advice from time to time to sort out financial related deals makes the business ever green.
Some of the factors that encourage entrepreneurs to start their own financial consulting business despite the fact that the business is risky is that the business is quite profitable and can be started in any part of the world.
One good thing about the financial consulting industry is that there is a readily available market for their services simply because individuals and even organizations naturally would want to improve and effectively manage their finances. So, if you are well positioned and you know how to deliver results as a financial adviser, you will always smile to the bank.
Starting a Financial Consulting Firm – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require the services of financial consulting firms cut across individuals, 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 consulting business, then you should make it all encompassing. It should include corporate organizations, corporate executives, investors, retirees and pensioners, accredited Investors, blue chip companies, businessmen and women, start-ups, entrepreneurs, aspiring entrepreneurs, and households within and outside the city you are operating in who have the capacity to pay for your services.
List of Niche ideas Within the Financial Consulting Industry That You Can Specialize in
Most financial consulting services firms tend to operate general services that a standard financial consulting firm is expected to offer. That is why it seems that there are no niche areas in the industry.
But on the other hand, some financial consulting firms may decide to major in some key areas such as;
- Investment (Business Portfolio) Management
- Financial Advisory Services
- Wealth Creation and Wealth Management
- Asset Management
- Mortgage, Pension, Retirement and Investment Advisory Services
- Income Tax Preparation
- Financial Auditing
- Estate Planning
- Budgeting and Financial Planning
- Accounting and Financial Services Consulting
- Tax Consulting
- Insurance Consulting
The Level of Competition in the Financial Consulting Services Industry
No matter the line of business you decide to pitch your tent, you are still going to compete with others who are into same area of business and financial consulting services business is not an exemption.
The level of competition in the financial consulting services industry depends largely on your area of specialization and how big and organized your financial consulting services firm is.
The truth is that, no matter the level of competition in an industry, if you brand and promote your services properly, you will always make headway in the industry. Just ensure you have what it takes to proffer the right solutions to people and organizations’ financial concerns and you know how to reach out to your target market.
List of Well – Known Brands in the Financial Consulting Industry
These are some of the leading financial consulting services firms in the United States of America and also in the globe;
- T. Kearney
- Bain & Company
- Deloitte Consulting
- Ernst & Young
- McKinsey & Company
- Oliver Wyman
- PricewaterhouseCoopers (PwC)
- The Boston Consulting Group
- Booz & Company
- Towers Watson
- IBM Global Business Services
- Zolfo Cooper
- Milliman, Inc.
- NERA Economic Consulting
- Roland Berger Strategy Consultants
- Aon Consulting Worldwide
- Diamond Management & Technology Consultants, Inc.
- Analysis Group, Inc.
When it comes to starting a financial consulting services firm, you just have to get your feasibility studies and market research right before venturing into the business. The financial consulting services business is not for rookies; it is for professionals who have successfully gathered the required experience and expertise to proffer solutions to people’s and organizations financial concerns.
Starting this kind of business definitely entails that you acquire the required degree and professional certifications and also build good working relationship with stakeholders in the industry. If you are already a major player in the financial consulting services industry before venturing out to start your own financial consulting services firm, this might not be an issue.
Depending on the scale at which you want to start from, you might require as much as multiple thousands of dollars to strike this off and at the same time you might need far less than that if you choose to start the business from your house, a virtual office and a shared office space.
You will be expected to hire the services of experts that will help you with comprehensive economic and cost analysis within the location that you intend launching the business. If you get your economic and cost analysis right before launching the business, you may not have to stay the long before you break even.
Starting Your Financial Consulting Services Firm from Scratch vs Buying a Franchise
When it comes to starting a business of this nature, it will pay you to buy the franchise of a successful financial consulting services firm as against starting from the scratch. Even though it is relatively expensive to buy the franchise of an established financial consulting services 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 services industry, then you might just want to start your own financial consulting services firm from the scratch. The truth is that it will pay you in the long run to start your financial consulting 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 big and successful financial consulting services firms around started from the scratch and they were able to build a solid business brand.
Possible Threats and Challenges You Will Face When Starting a Financial Consulting Services Business
If you decide to start your own financial consulting services firm today, one of the major challenges you are likely to face is the presence of well-established financial consulting services firms 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 you may face as a financial consulting services firm operating in the United States are unfavorable government policies, the arrival of a competitor within your location of operation and global economic downturn. 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.
Starting a Financial Consulting Firm – Legal Matters
- Best legal entity to use for a financial consulting business
When considering starting a financial consulting services firm, the legal entity you choose will go a long way to determine how big the business can grow.
Generally, you have the option of either choosing a general partnership or limited liability company which is commonly called an LLC for a business such as a financial consulting services firm. Ordinarily, general partnership should have been the ideal business structure for a small scale financial consulting services firm especially if you are just starting out with a moderate startup capital.
But people prefer limited liability Company for obvious reasons. As a matter of fact, if your intention is to grow the business and have clients both corporate and individual 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.
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. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your financial consulting services firm; limitation of personal liability, ease of transferability, admission of new owners, investors expectation and of course taxes. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
Catchy Business Name Ideas Suitable for a Financial Consulting Services Firm
When it comes to choosing a name for your business, it is expected that you should be creative because whatever name you choose for the business will go a long way to create a perception of what the business represents. If you are considering starting your own financial consulting services firm, here are some catchy names that you can choose from;
- Rowland Pence & Co® Financial Consulting, LLC
- J P Mullen Financial Consulting Services, LLC
- Darlington & Williams Financial Advisors, LLP
- Claire Moor Financial Consulting Services, LLP
- Kelly Sandy Financial Consulting Services Company, Inc.
- E W Deming & Associates Financial Advisers, LLp
- Clear Lead Financial Consulting Services Group
- Life Trust Financial Consulting Services, LLC
- Pally Drake & Co Financial Advisors, LLP
- Sammie Chris Financial Consulting Services, Inc.
- Shannon Pearce Financial Consulting Services, Inc.
- Gab & Gab Associates, LLP
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 policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your financial consulting services firm.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own financial consulting 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
Intellectual Property Protection/Trademark
If you are considering starting your own financial consulting services firm, usually you are required to file for intellectual property protection/trademark. This is so 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. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
Is Professional Certification Needed to Run a Financial Consulting Firm?
Professional certification is one of the main reasons why most financial consulting services firm stand out. If you want to make an impact in the financial consulting services 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 the competitive market.
These are some of the certifications you can work towards achieving if you want to run your own financial consulting services firm;
- 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 consulting services firm in the United States and in most countries of the world without necessarily acquiring professional certifications and business license even if you have adequate experience cum background in the financial services industry.
List of Legal Documents You Need to Run a Financial Consulting Firm
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 consulting 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 catches up 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 consulting 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
- Apostille (for those who intend operating beyond the United States of America)
- Company Bylaws
- Insurance Policy
- Memorandum of Understanding (MoU)
Financing Your Financial Consulting Services Business
Asides from the required certifications and hands-on experience, starting a financial consulting services 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 major factors that 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 consulting services 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
- 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
Choosing a Suitable Location for your Financial Consulting Firm
Financial consulting services firms and most financial services based type of businesses require that you see physically with your clients hence it must be situated 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 profit from the business.
The fact that you can operate your financial consulting services firm from any part of the world does not mean that location has little influence on the success of a financial consulting services firm. Financial consulting services firms and related businesses are willing to pay expensive rents in order to stay in a busy business district; a place where business and financial activities are at its peak.
If you make the mistake of renting or leasing a facility 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 a 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 a business such as financial consulting services firm, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your financial consulting services firm.
These are some of the key factors that you should consider before choosing a location for your financial consulting services firm;
- The demography of the location
- The demand for the services of financial consulting services firm and related businesses in the location
- The purchasing power of the residents of the location
- Accessibility of the location
- The number of financial consulting services firms and related businesses that in the location
- The local laws and regulations in the community/state
- Traffic, parking and security
Starting a Financial Consulting Firm – Technical & Manpower Details
On the average, there are no special equipment needed to run this type of business except for customized financial planning and other financial related software apps and social media management software applications. But you will definitely 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 consulting 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 consulting services firm then you should consider the option of leasing a facility for your office.
As regards the number of employees that you are expected to kick 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 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 consulting services 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 from big corporations. If you are just starting out you may not have the financial capacity or required business structure to retain all the professionals that are expected to work with you.
The Service Delivery Process of a Financial Consulting Firm
On the average, the way financial consulting services firms work varies from one agency to another, but ideally, a financial consulting services firm is expected to first and foremost build a robust company profile before sourcing for clients.
Basically, when clients hire your services, they expect you to proffer solutions to their pressing financial related challenges and concerns.
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 are indeed producing results. In some cases, the agreed consulting 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 consulting services firm may decide to improvise or adopt any business process and structure that will guarantee them good return on investment (ROI), efficiency and flexibility.
Starting a Financial Consulting Firm – The Marketing Plan
- Marketing ideas and strategies
As a financial consulting services firm, you would have to prove your worth over and over again before attracting corporate organizations and individuals to hire your services. So, if you have plans of starting your own financial consulting services firm, it will pay you to first build a successful career in alternative financial services industry.
People and organizations will only hire your services if they know that you are going to solve their financial related challenges.
So, when you are drafting your marketing plans and strategies for your financial consulting 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 in practical terms what you have been able to achieve in time past as it relates to the financial consulting services industry, and the organizations you have worked for. 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, so you must be pretty good with presentations. Here are some of the platforms you can utilize to market your financial consulting services firm;
- Introduce your business by sending introductory letters alongside your brochure to all the corporate organizations, corporate executives, investors, retirees and pensioners, accredited investors, blue chip companies, businessmen and women, start-ups, entrepreneurs, aspiring 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 and TV stations (make yourself available for financial consulting services related talk shows and interactive sessions on TV and Radio)
- List your business on local directories/yellow pages
- Attend international financial expos, seminars and business fairs
- 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
Strategies to Boost Your Brand Awareness and Create Your Corporate Identity
If your intention of starting a financial consulting 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 the print, electronic media and social media (the internet). As a matter of fact, it is cost effective to use social media platforms to promote your brand, besides it is pretty much effective and wide reaching.
Below are the platforms you can leverage on to boost your brand and to promote and advertise your financial consulting 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, Snapchat, Badoo, 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
- Contact corporate organizations, corporate executives, investors, retirees and pensioners, accredited Investors, blue chip companies, businessmen and women, start – ups, entrepreneurs, aspiring entrepreneurs, and households within and outside the city you are operating in who have the capacity to pay for your services by calling them up and informing them of your organization and the services you offer
- 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.