Slideshow 5 Best Tips for Startup Advisors

  • August 29 2013, 3:06pm EDT
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5 Best Tips for Startup Advisors

By Samantha Allen and Teck Lim

Earlier this year Dave Grant left his job as a financial planner at an established firm and started his own financial planning firm, Finance for Teachers.

This transformation didn't happen overnight, Grant writes. It took me four years to develop this dream, and nine months of long nights and early mornings to make it a reality. After talking about it for such a long time, it seems slightly surreal to be living it.

Grant acknowledges that there have been “hiccups” along the way, but says that five key decisions made his journey easier than he anticipated.

Here are the strategies that helped Grant get started, along with tips from other advisors who have experienced the challenge of starting their own firms.

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Some advisors have become successful by being generalists, but I believe specialization is the future of financial planning -- and that planners who develop a niche will become successful a lot more quickly than those who do not, Grant writes. I've chosen to focus on teachers, a niche that also includes my wife as well as several family members and friends. My wife's benefits are a key part of my own financial plan, and I know several people facing similar issues, Grant adds. Even if these people don't become clients, my casual conversations with them have given me priceless insight into their world.

A year ago Alan Moore started his own planning firm, Serenity Financial Consulting in Milwaukee, Wis. He was 25 at the time. He didn’t start off with a clear niche, and says that was a mistake. Now Moore’s ideal clients are under 45 and are high-income, low-net-worth savers. My niche doesn’t revolve around a profession, but instead around a personality type, he says.

Advisor coach Robert Sofia, founder of Platinum Advisor Strategies, agrees that developing a niche is crucial to a new planner’s success, but says it’s important for advisors not to rush it. It usually takes time to figure out your niche, and what it ends up being might surprise you, Sofia says. Be patient. Be selective. The right niche will usually be discovered with time.

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Some vendors want to sell you products. Better vendors are willing to educate you, Grant says.

When starting his firm and evaluating vendors, Moore also found that some were more helpful and accommodating to him as a startup. Vendors that have big upfront costs can be difficult for a new firm to afford, he says. The biggest thing for vendors is how supportive they are for startups.

Advisor Brian Hayes of Kokomo, Ind., says the more vendors you work with, the better. Become independent and represent as many companies as possible, he says. You have to be able to bring a lot of options to the table to be able to really take care of a client the best way.


One of the big fears my wife and I had about me being self-employed was losing a steady paycheck. Some people are happy to live off of savings while they launch, but as a fiscally conservative family, we did not want to tap our savings for income, writes Grant.

Fortunately, Grant was able to secure additional income by working with a fellow planner who was spearheading a project with a consumer advice website. The hours were also flexible which made it feasible to do both. Grant says he was able to head into the company launch with 50 % of his previous income being replaced.

Moore was also able to find side projects to help out while he got started. He tapped his network for opportunities, and wound up helping out as a project-based paraplanner preparing financial plans, doing financial consulting for military families for another company and reviewing educational materials for a certification program.

Though any additional income will help a new advisor, Sofia warns against holding onto it for too long. If you hold onto a lifeline forever, you'll never learn to swim, Sofia says. Try to wean yourself away from distractions like secondary sources of income as soon as possible. Running a successful solo practice requires tremendous focus.

5 Best Tips for Startup Advisors

Launching your own practice isn't easy. Here are five tips for getting started from advisors who have experienced the challenge of going out on their own.

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Perhaps most important however is having the support of those closest to you.

Grant and his wife worried about how difficult the process might be. He writes about a breakthrough moment when it became very clear that his wife was on board:

One evening we were taking a walk and she started a conversation by asking, What strategies are we thinking about to generate clients and revenue? Here's what I think we should do. ...

I stopped walking and wrapped my arms around her. I gave Sarah a great, big kiss. Do you realize what you just said? I asked. You said 'We.'

That day, Finance for Teachers became a family company, not just mine. And now, with the right nurturing, we'll watch it grow together.

Advisors strongly agree that having your spouse or partner's support is vital. It’s hard in a solo practice, says Adam Nugent of Foresight Wealth Management in Sandy, Utah. You need to have an understanding spouse or significant other who can be flexible and understands that you might have to work nights or early mornings, or in some cases when you first start, on a weekend. The work/life balance in this industry is a juggling act, especially when you work as a sole practitioner.

The hours can be demanding, Hayes notes. In order to make it in this business, you will have to sacrifice some things. You cannot only work 30 to 40 hours a week.

Despite the challenges, these advisors have found the experience rewarding. The best part? Starting from scratch and building something out of nothing, Hayes says.