financial advisory services business plan

Financial Advisor Business Plan Template

Written by Dave Lavinsky

Over the past 20+ years, we have helped over 9,000 entrepreneurs create business plans to start and grow their financial advisor and financial planning businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a financial advisor business plan template step-by-step so you can create your plan today.

Download our Ultimate Financial Advisor Business Plan Template here >

What is a Financial Advisor Business Plan?

A business plan provides a snapshot of your financial advisor business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Financial Advisory Firm

If you’re looking to start a financial advisor business or grow your existing financial advisor business you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your financial planning business in order to improve your chances of success. Your financial advisor business plan is a living document that should be updated annually as your company grows and changes.

Source of Funding for Financial Planning Businesses

With regards to funding, the main sources of funding for a financial advisor are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

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Your business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of financial advisor business you are operating and the status; for example, are you a startup, do you have a financial advisor business that you would like to grow, or are you operating a chain of financial planning businesses.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the financial advisor business industry. Discuss the type of financial planning business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company analysis, you will detail the type of financial advisor business you are operating.

For example, you might operate one of the following types:

• Financial Planning for Consumers : this type of financial advisor provides services such as retirement planning and investment management for individuals.
• Financial Management Consulting : this type of financial advisor business typically serves businesses and governments, providing portfolio management services.

In addition to explaining the type of financial advisor business you operate, the Company Analysis section of your financial planner business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the financial advisor business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the financial advisor business industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards cryptocurrency investment, it would be helpful to ensure your plan calls for continuing education in alternative investments.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your financial advisor business plan:

• How big is the financial advisor business (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your financial advisor business. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your financial planning business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: families, high net worth individuals (HNWIs), baby boomers, businesses, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of financial advisor business you operate. Clearly baby boomers would want different pricing and product options, and would respond to different marketing promotions than high net worth individuals.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most financial advisor businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other financial advisor businesses.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes independent advisory firms, commercial banks, investment banks, insurance companies, broker-dealers, discount brokerages or self-managing one’s finances and investments. You need to mention such competition to show you understand that not everyone who seeks financial advice engages the services of a financial advisor.

With regards to direct competition, you want to detail the other financial advisor businesses with which you compete. Most likely, your direct competitors will be financial advisor businesses located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What products and services do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior services?
• Will you provide products/services that your competitors don’t offer?
• Will you make it easier or faster for customers to engage your services?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. Your financial advisor marketing plan should include the following:

Product : in the product section you should reiterate the type of financial advisor business that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to financial advice, will you offer trust services or brokering and dealing?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the products and services you offer and their prices.

Place : Place refers to the location of your financial advisor business. Document your location and mention how the location will impact your success.

Promotions : the final part of your financial advisor business marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Pay per click advertising
• Reaching out to local bloggers and websites
• Social media advertising
• Local radio advertising
• Banner ads at local venues

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your financial advisory such as serving customers, procuring supplies, keeping the office clean, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 100th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.

Management Team

To demonstrate your financial advisor business’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in the financial advisor business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in financial advisor businesses and/or successfully running small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 50 accounts at a time, or 100? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your financial advisor business, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a financial advisor business:

• Office location build-out including design fees, construction, etc.
• Cost of equipment like computer hardware and software, office equipment, etc.
• Cost of required licenses (e.g., FINRA fees)
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office design blueprint or location lease, etc.

Additional Financial Advisor Business Plan Tips

When writing a business plan for a financial advisor practice, take great pains to avoid these three mistakes which each give funders reason to set the plan aside or stop returning your calls.

Resting on Your Laurels

Your financial experience that prepares you to be an advisor is certainly important to explain in your business plan, but this isn’t enough. You have to go beyond explaining the experience you bring to the table to explain how you will market and operate a business with that experience serving as a cornerstone. Without a plan for how the business will run, readers cannot truly judge how you expect the business to succeed.

Ignoring Competition

Writing that there is no competition for the customers you want in the location you will operate is a huge mistake in a business plan. There are always competitors, even if the competition is Fortune magazine or the Motley Fool website. At a minimum, clients have the option of finding financial advice in these inexpensive sources rather than working with you. The competitive analysis section of your plan must recognize the challenge you face in proving your practice’s worth beyond these competitors, at the very least.

Not Connecting the Dots

The business plan is a type of logic puzzle. When put together, it connects opportunity to means to methods to results. Think through the logic of whether the means you present (your experience, team, location, etc.) are adequate to take advantage of the opportunity. Consider whether the operations and marketing methods you propose make sense for the means. Look at whether the results you project are reasonable given these methods. If you don’t think through these steps, your readers will find gaps in your logic and turn down funding for your plan, even if each component sounds perfectly fine on its own. The plan must work as a cohesive whole to be fundable.

Financial Advisor Business Plan Summary

Putting together a business plan for your financial advisor business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the financial advisor business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful financial advisor business.

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You can download our financial advisor business plan PDF here . This is a business plan template you can use in PDF format.  

Financial Advisor Business Plan FAQs

What is the easiest way to complete my financial advisor business plan.

Growthink's Ultimate Financial Advisor Business Plan Template allows you to quickly and easily complete your Financial Advisor Business Plan.

Where Can I Download a Financial Advisor Business Plan PDF?

You can download our financial advisor business plan PDF template here . This is a business plan template you can use in PDF format.

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How to Write a Financial Advisor Business Plan (+ Template)

Creating a business plan is essential for any business, but it can be especially helpful for financial advisor businesses that want to improve their strategy and raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every financial advisor business owner should include in their business plan.

Download the Ultimate Financial Advisor Business Plan Template

What is a Financial Advisor Business Plan?

A financial advisor business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Financial Advisor Business Plan?

A financial advisor business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Financial Advisor Business Plan

The following are the key components of a successful financial advisor business plan:

Executive Summary

The executive summary of a financial advisor business plan is a one- to two-page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your financial advisor company
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast, among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company began and provide a timeline of milestones your company has achieved.

If you are just starting your financial advisor business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your financial advisor firm, mention this.

You will also include information about your chosen financial advisor business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a financial advisor business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the financial advisor industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and, if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, financial advisor business customers may include corporate human resources departments, small business owners, and individual investors.

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or financial advisor services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your financial advisor business may have:

• Extensive knowledge and experience in the industry
• Proven track record of success
• Strong relationships with clients
• Offers a unique service that is not currently being offered by competitors
• Highly specialized services that cater to a specific niche
• Low overhead costs

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, or launch a direct mail campaign. Or you may promote your financial advisor business via word-of-mouth or referrals.  

Operations Plan

This part of your financial advisor business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a financial advisor business include reaching $X in sales. Other examples include acquiring a certain number of clients or partners, launching a new service, opening a new location, and hiring key personnel.

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to your specific financial advisor industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities, you plan to hire for in the future.

Financial Plan

Here, you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Financial Advisor Firm

Financial advisor balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : Everything you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Financial Advisor Firm

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include cash flow from:

• Investments

Below is a sample of a projected cash flow statement for a startup financial advisor business.

Sample Cash Flow Statement for a Startup Financial Advisor Firm

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your financial advisor company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

Following the tips and using the template provided in this article, you can write a financial advisor business plan that will help you succeed.  

Finish Your Financial Advisor Business Plan in 1 Day!

Wish there was a faster, easier way to finish your Financial Advisor business plan?

With our Ultimate Financial Advisor Business Plan Template you can finish your plan in just 8 hours or less!

Other Helpful Articles

Financial Advisor Marketing Plan to Get Clients (+Template)

Establishing Business Goals For Your First Year as a Financial Advisor

Developing Your Financial Advisor Value Proposition

How to Create a Financial Advisor Vision Statement

How to Write a Financial Planner Business Plan (+ Template)

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Essential requirements in crafting a one-page financial advisor business plan.

August 17, 2015 07:01 am 21 Comments CATEGORY: Practice Management

Executive Summary

In a world where most advisory firms are relatively small businesses, having a formal business plan is a remarkably rare occurrence. For most advisors, they can “keep track” of the business in their head, making the process of creating a formal business plan on paper to seem unnecessary.

Yet the reality is that crafting a business plan is about more than just setting some business goals to pursue. Like financial planning, the process of thinking through the plan is still valuable, regardless of whether the final document at the end gets put to use. In fact, for many advisory firms, a simple “one-page” financial advisor business plan may be the best output of the business planning process – a single-page document with concrete goals to which the advisor can hold himself/herself accountable.

So what should the (one-page) financial advisor business plan actually cover? As the included sample template shows, there are six key areas to define for the business: who will it serve, what will you do for them, how will you reach them, how will you know if it’s working, where will you focus your time, and what must you do to strengthen (or build) the foundation to make it possible? Ideally, this should be accompanied by a second page to the business plan, which includes a budget or financial projection of the key revenue and expense areas of the business, to affirm that it is a financially viable plan (and what the financial goals really are!).

And in fact, because one of the virtues of a financial advisor business plan is the accountability it can create, advisors should not only craft the plan, but share it – with coaches and colleagues, and even with prospective or current clients. Doing so becomes an opportunity to not only to get feedback and constructive criticism about the goals, but in the process of articulating a clear plan for the business, the vetting process can also be a means to talk about the business and who it will serve, creating referral opportunities in the process!

Author: Michael Kitces

Michael Kitces is Head of Planning Strategy at Buckingham Strategic Wealth , which provides an evidence-based approach to private wealth management for near- and current retirees, and Buckingham Strategic Partners , a turnkey wealth management services provider supporting thousands of independent financial advisors through the scaling phase of growth.

In addition, he is a co-founder of the XY Planning Network , AdvicePay , fpPathfinder , and New Planner Recruiting , the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com , dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

Read all of Michael’s articles here .

Why A Business Plan Matters For Financial Advisors

There’s no end to the number of articles and even entire books that have been written about how to craft a business plan , yet in practice I find that remarkably few financial advisors have ever created any kind of formal (written or unwritten) business plan. Given that the overwhelming majority of financial advisors essentially operate as solo practitioners or small partnerships, this perhaps isn’t entirely surprising – when you can keep track of the entire business in your head in the first place, is there really much value to going through a formal process of crafting a financial advisor business plan?

Having been a part of the creation and growth of numerous businesses , I have to admit that my answer to “does a[n individual] financial advisor really need a business plan?” is a resounding yes . But not because you’re just trying to figure out what the basics of your business will be, which you may well have “figured out” in your head (or as the business grows, perhaps figured out in conversations with your partner). The reason a business plan matters is all about focus , and the ability to keep focus in proceeding towards your core objectives, and accountable to achieving them, even in a dynamic real-world environment full of distractions.

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As the famous military saying goes, “ no battle plan ever survives contact with the enemy ”, because the outcomes of battle contact itself change the context, and it’s almost impossible to predict what exactly will come next. Nonetheless, crafting a battle plan in advance is a standard for military leadership. Because even if the plan will change as it’s being executed, having a clearly articulated objective allows everyone, even (and especially) in the heat of battle, to keep progressing towards a common agreed-upon goal. In other words, the objective stated in the battle plan provides a common point of focus for everyone to move towards, even as the (battle) landscape shifts around them. And the business plan serves the exact same role within a business.

Essential Elements Required In A Financial Advisor Business Plan

Because the reality is that in business – as in battle? – the real world will not likely conform perfectly to an extensively crafted business (or battle) plan written in advance, I am not a fan of crafting an extensively detailed business plan, especially for new advisors just getting started, or even a ‘typical’ solo advisory firm. While it’s valuable to think through all the elements in depth – the process of thinking through a business plan is part of what helps to crystallize the key goals to work towards – as with financial planning itself, the process of planning can actually be more valuable than “the plan” that is written out at the end .

Accordingly, for most financial advisors trying to figure out how to write a business plan, I’m an advocate of crafting a form of “one-page business plan” that captures the essential elements of the business, and provides direction about where to focus, especially focus the time of the advisor-owner in particular. In other words, the purpose for a financial advisor business plan is simply to give clear marching orders towards a clear objective, with clear metrics about what is trying to be achieved along the way, so you know where to focus your own time and energy!

Of course, the reality is that what constitutes the most important goals for an advisory firm – as well as the challenges it must surmount – will vary a lot, depending not just on the nature of the firm, but simply on its size, scope, and business stage. Financial advisors just getting started launching a new RIA face very different business and growth issues than a solo advisor who has been operating for several years but now hit a “wall” in the business , and the challenges of a solo advisor are different than those of a larger firm with multiple partners who need to find alignment in their common business goals. Nonetheless, the core essential elements that any business plan is required to cover are remarkably similar.

Requirements For An Effective Financial Advisor Business Plan

While there are many areas that can potentially be covered, the six core elements that must be considered as the template for a financial advisor business plan are:

6 Required Elements Of A (One Page) Business Plan For Financial Advisors 1) Who will you serve? This is the most basic question of all, but more complex than it may seem at first. The easy answer is “anyone who will pay me”, but in practice I find that one of the most common reasons a new advisor fails is that their initial outreach is so unfocused, there’s absolutely no possibility to gain any momentum over time. In the past, when you could cold-call your way to success by just trying to pump your products on every person who answered the phone until you found a buyer, this might have been feasible. But if you want to get paid for your advice itself, you need to be able to demonstrate your expertise. And since you can’t possibly be an expert at everything for everyone, you have to pick someone for whom you will become a bona fide specialist (which also provides crucial differentiation from other advisors the potential client might choose to work with instead ). In other words, you need to choose what type of niche clientele you’re going to target to differentiate yourself. And notably, this problem isn’t unique to new advisors; many established advisors ultimately hit a wall in their business, in part because it’s so time-consuming trying to be everything to everyone, that they reach their personal capacity in serving clients earlier than they ‘should’. Focusing on a particular clientele – to the point that you can anticipate all of their problems and issues in advance – allows the business to be radically more efficient. So who, really , do you want to serve? 2) What will you do for them? Once you’ve chosen who you will serve, the next task is to figure out what you will actually do for them – in other words, what services will you deliver. The reason it’s necessary to first figure out who you will serve, is that the nature of your target niche clientele may well dictate what kind of services you’re going to provide them; in fact, part of the process of identifying and refining your niche in the first place should be to interview a number of people in your niche , and really find out what they want and need that’s important to them (not just the standard ‘comprehensive financial plan’ that too many advisors deliver in the same undifferentiated manner ). For instance, if you’re really serious about targeting retirees, you might not only provide comprehensive financial planning, but investment management services (for their retirement portfolios), a specific retirement income distribution strategy, assistance with long-term care insurance, and guidance on enrolling in Medicare and making decisions about the timing of when to start Social Security benefits . On the other hand, if you hope to work with entrepreneurs, you might need to form relationships with attorneys and accountants who can help facilitate creating new business entities, and your business model should probably be on a retainer basis, as charging for assets under management may be difficult (as entrepreneurs tend to plow their dollars back into their businesses!). If your goal is to work with new doctors, on the other hand, your advice will probably focus more on career guidance, working down a potential mountain of student debt, and cash flow/budgeting strategies. Ultimately, these adjustments will help to formulate the ongoing client service calendar you might craft to articulate what you’ll do with clients (especially if you plan to work with them on an ongoing basis), and the exact business model of how you’ll get paid (Insurance commissions? Investment commissions? AUM fees? Annual retainers? Monthly retainers ? Hourly fees?). 3) How will you reach them? Once you’ve decided who you want to reach, and what you will do for them, it’s time to figure out how you will reach them – in other words, what will be your process for finding prospective clients you might be able to work with? If you’re targeting a particular niche, who are the centers of influence you want to build relationships with? What publications do they read, where you could write? What conferences do they attend, where you might speak? What organizations are they involved with, where you might also volunteer and get involved? If you’re going to utilize an inbound marketing digital strategy as an advisor , what are the topics you can write about that would draw interest and organic search traffic, and what giveaway will you provide in order to get them to sign up for your mailing list so you can continue to drip market to them? In today’s competitive world, it’s not enough to just launch a firm, hang your (virtual) shingle, and wait for people to walk in off the street or call your office. You need to have a plan about how you will get out there to get started! 4) How will you know if it’s working? Once you’ve set a goal for who you want to serve, what you want to do for them, and how you will reach them, it’s time to figure out how to measure whether it’s working. The caveat for most financial advisory businesses, though, is that measuring outcomes is tough because of the small sample size – in a world where you might have to reach out to dozens of strangers just to find a dozen prospects, and then meet with all those prospects just to get a client or two, it’s hard to tell whether a strategy that nets one extra client in a quarter was really a “better strategy” or just random good luck that won’t repeat. As a result, in practice it’s often better to measure activity than results , especially as a newer advisory firm. In other words, if you think you’ll have to meet 10 Centers Of Influence (COIs) to get introductions to 30 prospects to get 3 clients, then measure whether you’re meeting your activity goals of 10 COIs and 30 prospect meetings, and not necessarily whether you got 2, 3, or 4 clients out of the last stint of efforts. Not that you shouldn’t ultimately have results-oriented goals of clients and revenue as well, but activity is often the easier and more salient item to measure, whether it’s phone calls made, articles written, subscribers added to your drip marketing list, prospect meetings, COI introductions, or something else. So when you’re defining the goals of your business plan, be certain you’re setting both goals for the results you want to achieve, and the key performance indicator (KPI) measures you want to evaluate to regarding your activities along the way? 5) Where will you focus your time in the business? When an advisory firm is getting started, the role of the advisor-as-business-owner is to do “everything” – as the saying goes, you’re both the chief cook and the bottle washer . However, the reality is that the quickest way to failure in an advisory firm is to get so caught up on doing “everything” that you fail to focus on the essential activities necessary to really move the business forward (that’s the whole reason for having a plan to define what those activities are, and a measure to determine whether you’re succeeding at them!). Though in truth, the challenge of needing to focus where you spend your time in the business never ends – as a business grows and evolves, so too does the role of the advisor-owner as the leader, which often means that wherever you spent your time and effort to get your business to this point is not where you need to focus it to keep moving forward from here. From gathering clients as an advisor to learning to transition clients to another advisor, from being responsible for the firm’s business development to hiring a marketing manager, from making investment decisions and executing trades to hiring an investment analyst and trader. By making a proactive decision about where you will spend your time, and also deliberately deciding what you will stop doing, it also becomes feasible to determine what other resources you may need to support you, in order to ensure you’re always spending your time focused on whatever is your highest and best use. In addition, the process can also reveal gaps where you may need to invest into and improve yourself, to take on the responsibilities you haven’t in the past but need to excel at to move forward from here. 6) How must you strengthen the foundation? The point of this section is not about what you must do to achieve the goals you’ve set, but what else needs to be done in the business in order to maximize your ability to make those business goals a reality. In other words, if you’re going to focus your time on its highest and best use in the business, what foundation to you need to support you to make that happen? If you’re a startup advisory firm, what business entity do you need to create, what are the tools/technology you’ll need to launch your firm , and what licensing/registrations must you complete? Will you operate with a ‘traditional’ office or from a home office , or run an entirely virtual “location-independent” advisory firm ? What are the expenses you’re budgeting to operate the business? If you’re an advisor who’s hit a growth wall , what are the essential hire(s) you’ll make in the near future where/how else will you reinvest to get over the wall and keep moving forward? At the most basic level, the key point here is that if you’re going to execute on this business plan to move the business forward from here, you need a sound foundation to build upon – so what do you need to do to shore up your foundation, so you can keep building? But remember, the goal here is to do what is necessary to move forward, not everything ; as with so much in the business, waiting until perfection may mean nothing gets done at all.

Creating A Budget And Financial Projections For Your Advisory Business

In addition to crafting a (one-page) financial planner business plan, the second step to your business planning process should be crafting a budget or financial projection for your business for the upcoming year (or possibly out 2-3 years).

Key areas to cover in budget projections for a financial advisory firm are:

Revenue - What are the revenue source(s) of your business, and realistically what revenue can you grow in the coming year(s)? - If you have several types of revenue, what are you goals and targets for each? How many hourly clients? How much in retainers? How much in AUM fees? What commission-based products do you plan to sell, and in what amounts? Expenses - What are the core expenses to operate the business on an ongoing basis? (E.g., ongoing salary or office space overhead, core technology you need to operate the business, etc.) - What are the one-time expenses you may need to contend with this year? (Whether start-up expenses to launch your advisory firm , new hires to add, significant one-time projects to complete, etc.)

An ongoing advisory firm may project out for the next 1-3 years, while a newer advisors firm may even prefer a more granular month-by-month budget projection to have regular targets to assess.

Ultimately, the purpose of the budgeting process here is two-fold. The first reason for doing so is simply to have an understanding of the prospective expenses to operate the business, so you can understand if you do hit your goals, what the potential income and profits of the business will be (and/or whether you need to make any changes, if the business projections aren’t viable!). The second reason is that by setting a budget, for both expenses and revenue, you not only set targets for what you will spend in the business to track on track, but you have revenue goals to be held accountable to in trying to assess whether the business is succeeding as planned.

Vetting Your Business Plan By Soliciting Constructive Criticism And Feedback

The last essential step of crafting an effective financial planner business plan is to vet it – by soliciting feedback and constructive criticism about the gaps and holes. Are there aspects of the financial projections that seem unrealistic? Is the target of who the business will serve narrow and specific enough to be differentiated, such that the person you’re talking to would clearly know who is appropriate to refer to you? Are the services that will be offered truly unique and relevant to that target clientele, and priced in a manner that’s realistically affordable and valuable to them?

In terms of who should help to vet your financial advisor business plan, most seem to get their plan vetted by talking to a business coach or consultant to assess the plan. While that’s certainly a reasonable path, another option is actually to take the business plan to fellow advisors to vet, particularly if you’re part of an advisor study (or “mastermind”) group ; the reason is that not only do fellow advisors have an intimate understanding of the business and potential challenges, but if their target clientele is different than yours, it becomes an opportunity to explain what you do and create the potential for future referrals! In other words, “asking for advice on your business plan” also becomes a great opportunity to “tell you about who I work with in my business that you could refer to me” as well! (In fact, one of the great virtues of a clearly defined niche practice as an advisor is that you can generate referrals from other advisors who have a different niche than yours !)

Similarly, the reality is that another great potential source for feedback about your business plan are Centers of Influence already in your niche in the first place. While you might not share with your potential clients the details of your business financial projections (which is why I advocate that those be separate from the one-page business plan), the essential aspects of the business plan – who you will serve, what you will provide them, how you will charge, and how you will try to reach them – is an area that the target clientele themselves may be best positioned to provide constructive feedback. And in the process, once again you’ll effectively be explaining exactly what your niche business does to target clientele who could either do business with you directly, or refer business to you , even as you’re asking for their advice about how to make the business better (to serve people just like them!). So whether it’s people you’re not yet doing business with but want to, or an existing client advisory board with whom you want to go deeper, vetting your plan with prospective and current clients is an excellent opportunity to talk about and promote your business, even as you’re going through the process of refining it and making it better!

And notably, the other benefit of vetting your business plan with others – whether it’s a coach, colleague, prospects, or clients – is that the process of talking through the business plan and goals with them also implicitly commits to them that you plan to act on the plan and really do what’s there. In turn, what this means is that once you’ve publicly and openly committed to the business plan with them, it’s now fair game for them to ask you how it’s going, and whether you’re achieving the goals you set forth for yourself in the plan – an essential point of accountability to help you ensure that you’re following through on and executing the business plan you’ve created!

So what do you think? Have you ever created a formal business plan for yourself? If you have, what worked for you – a longer plan, or a shorter one? If you haven’t created a business plan for yourself, why not? Do you think the kind of one-page financial advisor business plan template articulated here would help? Have you checked out our financial advisor business plan sample template  for yourself? Do you have a financial advisor business plan example you're willing to share in the comments below?

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Creating Your Financial Advisor Business Plan

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Does your personality influence the sale, active etf growth continues to amaze, treasury cash soars providing a liquidity reprieve, bridging marketing and customer experience: 16 conversation starters, the power of sales scripts in a rainmaker’s succession plan, how advisors can improve communication with clients, tying the knot a second time talk to your advisor.

A  business plan  is a critical step to success as a financial advisor.

An effective financial advisor business plan includes:

• Services you provide
• Commitment and philosophy
• Your ideal client, marketing plan, business goals, and financial numbers

Sample Financial Advisor Business Plan for [Business Name]:

Our financial advisory business, [Business Name], is committed to providing to  affluent women and couples  and closely held businesses:

• Comprehensive financial planning
• Insurance, retirement, and tax planning
• Investment management services

We understand the importance of financial security. Our goal is to guide our clients in making informed decisions. As a result, they can achieve their short-term and long-term financial goals.

Creating Your Financial Planner Business Plan

Executive summary.

[Business Name] is a full-service financial advisory firm located in [City, State].

Our team of experienced advisors offers personalized financial planning advice.

We also offer investment management, retirement planning, insurance planning, estate planning, and tax strategies to clients.

Our mission is to build deep meaningful relationships with our clients. We provide customized solutions that align with their financial goals and values.

Business Description

Our firm will operate as a registered investment advisory firm, offering commission and fee-based services. We offer financial planning to closely held business owners and their family.

Our advisors will assess clients’ financial situations, create tailored financial plans, implement investment strategies, and provide ongoing monitoring and support.

Market Analysis

The market for financial advisory services is continuing to grow. There is an increasing need for financial advice. Our target market comprises high-net-worth individuals, professionals, and closely held businesses in North America. We will continue to expand our reach and opportunities through online marketing, referral partnerships, and virtual consultations.

Financial Planning Services include:

1. Financial Planning

Our firm will offer a comprehensive evaluation of clients’ financial situation. The analysis will include our clients’ goals, cash flow analysis, budgeting, debt management, and risk assessment.

2. Investment Management

Our firm will create custom investment portfolios. The portfolios will include our clients’ risk tolerance, investment objectives, and time horizons.

3. Retirement Planning

We offer retirement income planning and projections. We analyze existing retirement accounts to help our clients maximize their retirement savings.

4. Insurance Planning

We provide insurance planning and analysis. Our review includes an assessment of the current insurance assessment and gaps in coverage.

5. Estate Planning

We assist with estate distribution, legacy planning, wealth preservation, and minimizing tax implications.

6. Tax Strategies

We provide guidance on tax-efficient investment strategies, tax planning, and coordination with clients’ tax professionals.

7. Generational Wealth Planning

We offer generational planning for our clients. As a result, our clients’ children and grandchildren have the tools and resources to create a bright financial future.

Marketing and Sales Strategy

To attract clients, we will implement the following marketing strategies:

1. Website Development

Our goal is to develop an informative and user-friendly website highlighting our services, team, and case studies. We provide weekly blog posts with relevant financial insights.

2. Social Media

We will create a presence on [Name of the social media platforms]. Our firm will consistently engage with our niche market of affluent clients and closely held businesses. We will share helpful financial tips, insight, and industry news.

3. Networking

We will join [name of the business organization], [name of the community events], and [name of online forums]. By doing so, we can build relationships, establish our credibility, and talk with prospective clients.

If you want more referrals, click here:

4. Referral Marketing

Our firm will thank current clients for their business and referrals. We will also communicate the value of receiving warm introductions.

We will continue to expand and grow our network of reciprocal referral partners. By growing our network, we connect with partners who are committed to giving and to getting referrals.

We will develop strategic partnerships with traditional referral partners, such as accountants or attorneys. We will also expand referral partnerships with non-traditional referral partners such as commercial lenders, business bankers, and business brokers.

5. Operations and Management

[Business Name] is managed by experienced financial advisors. Our services include financial planning and investment management.

Our firm will continue to improve our knowledge and skills. As a result, we will provide our clients with the most up-to-date financial solutions.

We leverage technology tools for efficient operations, data security, and streamline client communication.

6. Financial Projections

We will identify our annual revenue goal and then determine and monitor our daily, weekly, monthly, and quarterly numbers.

Based on our actual numbers, we will adjust our financial advisor business plan.

By combining market research and conservative assumptions, we project the following financial performance over the next three years:

a) Year 1: Generate total revenues of $X and achieve a net profit margin of X%.

b) Year 3: Increase total revenue by X% and improve the net profit margin to X%.

c) Year 5: Continue revenue growth, reaching $X, and maintain a net profit margin of X%.

7. Risks and Challenges

The financial advisory industry is highly competitive. Gaining clients’ trust requires consistent performance and proven results.

Market uncertainty and regulatory changes can also impact our business. We will mitigate these risks through continuous professional development, staying informed about market trends, and adapting our strategies accordingly.

Conclusion – Financial Advisor Business Plan

Financial advisors and money coaches need a business plan. The plan should include a solid foundation, winning strategy, and consistent execution of your plan.

A well-crafted business plan provides a roadmap for success. It also helps you achieve their long-term objectives while navigating the ever-changing financial advisory industry.

Related:  11 Reasons Financial Advisors Fail

How to Create a Financial Advisor Business Plan

• March 21, 2024

The notion of crafting a business plan often takes a backseat for many financial advisors, seen more as an initiative for budding entrepreneurs rather than established professionals. The apprehension tied to formulating a business plan can stem from its perceived complexity or unfamiliarity. 

However, the distinction between an ordinary practice and an elite one can often be attributed to a well-curated financial advisor business plan. This is corroborated by findings from the consulting firm CEG Worldwide , which show that 70 percent of top-earning advisors possess both formal business plans and marketing strategies. 

Although having a written financial advisor business plan does not necessarily guarantee success, there is compelling evidence to suggest that the act of planning instills a valuable level of clarity and discipline. Read on to learn about what elements make an effective business plan for a financial advisor. 

Calculate Your Business Growth Number  

It’s often said that you can’t manage what you can’t measure. As a financial advisor, objectively assessing the needs and growth trajectory of your own business can be a complex task. The concept of the “Business Growth Number” has been introduced to simplify this process, providing a clear metric that can guide your strategic decisions and formulating your financial advisor business plan. 

This number serves as a barometer of your firm’s growth potential, helping you identify the areas where improvement is most needed, and guiding you to the resources that can help amplify your effectiveness, revenue, and profit. Employing this metric allows you to select the most fitting for your enterprise, optimizing your potential for growth.

5 Elements to Include in Your Financial Advisor Business Plan  

When creating an effective financial advisor business plan, several key considerations can guide your strategy and decision-making process. These elements are crucial in determining your business’s direction, shaping its growth, and ensuring its sustainability. Read on to learn five of these essential considerations, providing insight into how they can be effectively integrated into your business plan.

1. Your Niche

Understanding ‘WHO’ your niche will be is step one. The success of your practice hinges on knowing who your ideal client is and tailoring your services to meet their precise requirements. A niche focus can significantly enhance the efficiency of your service delivery and even empower you to command a premium for your specialized advice.

While many advisors aspire to carve out a niche, the challenge lies in aligning core business elements such as service offerings, marketing, and business development to the specific profile of the niche. Examples of such niches could include clients from a specific profession, individuals experiencing life transitions , or employees from a specific industry. Therefore, it is essential to introspect and identify the client segment you genuinely enjoy working with, enabling you to design a specialty planning practice that can not only cater to, but even anticipate, their needs.

2. Your Services and Tech Stack 

The second essential consideration in formulating your financial advisor business plan involves defining your distinctive services and the technology that will enable them, which forms your Unique Value Proposition (UVP). Your UVP answers the question, “Why should I work with you?” and can set you apart in the marketplace.

Such differentiation could be serving entrepreneurs in managing personal and business finances, helping pre-retirees and retirees with retirement income plans, or offering financial planning for engineers. Prospective clients who identify with these profiles will find your value proposition attractive.

3. Your Marketing Plan  

Implementing your marketing strategy is the next pivotal step in making your presence known and demonstrating how you can assist potential clients. This strategy will be influenced by your target market, UVP, and tech stack, and will serve as a road map to attract and convert prospects into clients .

4. Your KPIs

It’s critical to set key performance indicators (KPIs) to measure your business plan’s efficacy. Your KPIs will be influenced by your ultimate objectives, which can range from amassing $1 billion in assets under management and building a legacy, to establishing a solo practice that maintains your family’s lifestyle and serves a client base you enjoy working with.

Various financial planning indicators can be used to benchmark your practice. For instance, consider tracking metrics like the next-generation client relationship rate. If your primary aim is to deliver an outstanding client experience , focus on service KPIs such as Net promoter scores, referrals per client, and response times.

5. Your Role & Operations

In the operation of your business, it’s essential to prioritize and focus on a limited number of key areas at a time, rather than attempting to direct efforts towards several tasks at once. This strategy entails first attending to the most substantial and important responsibilities in your business, such as business development and financial planning, ensuring that they are adequately integrated into your business schedule.

Once the primary elements of your business have been addressed, consider utilizing technology and creating repeatable processes for the less significant tasks. The option of outsourcing these secondary, less critical tasks could also be beneficial.

How IFG Can Help  

Integrated Financial Group delivers a unique, comprehensive solution for business development that goes beyond mere financial planning. Our Advisor Development team positions itself not just as a consulting entity, but as partners committed to accompanying you throughout your journey from being a financial planner to a successful business owner.

We provide strategic support in areas such as transition and integration meetings, business planning, and strategic coaching, which can help you focus on the fundamental aspects of your business. This allows you sufficient time to concentrate on primary tasks while we assist with the handling of secondary and tertiary responsibilities, enabling smoother operations and a stronger business foundation. This partnership with Integrated Financial Group empowers your business to flourish and reach its maximum potential.

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Securities offered through LPL Financial.  Member FINRA/ SIPC . Advisory Services may be offered through LPL Financial, a registered investment adviser or IFG Advisory, LLC, a registered investment adviser. Integrated Financial Group and IFG Advisory, LLC are separate entities from LPL Financial. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact business with residents of the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, DC, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin.

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Essential Parts of a Financial Advisor Business Plan

In the world of finance, foresight is everything, and that extends to how one manages their own business affairs. At the heart of a successful advisory firm lies a well-constructed financial planner business plan. But why is such a plan indispensable?

First and foremost, having a concrete business plan provides clarity. It allows financial advisors to map out their business goals with precision. This ensures every move is calculated and in line with their larger vision. 

This isn’t a luxury—it's a necessity. You wouldn’t advise clients without a detailed financial strategy, right? Similarly, running an advisory firm without a plan can lead to haphazard decisions and missed opportunities.

Moreover, in the realm of small businesses, which many advisory firms fall under, the terrain is fraught with challenges. From competition to regulatory changes, the landscape is ever-evolving.

Through meticulous planning, including identifying potential risks and strategizing on growth opportunities, advisors can navigate these complexities with confidence.

Here's our breakdown of everything you need to include in your comprehensive wealth management business plan. 

The Executive Summary

At the forefront of every robust business plan for financial advisors lies the executive summary. Think of it as the trailer to a blockbuster movie. It provides a concise overview of your business's entire narrative, touching on the highlights, the challenges, and the anticipated outcomes.

For a financial advisor, this section is vital. It encapsulates everything from your firm's mission and operational strategy to financial projections. The executive summary serves a dual purpose. 

First, it's a quick reference tool for those already familiar with your firm. It’s also a comprehensive introduction for potential investors who might be pursuing your plan for the first time.

While the bulk of your business plan dives deep into specifics, the executive summary gives readers an aerial view. It captures the essence of your advisory venture and its potential trajectory.

The Company Overview

The next step is to delve into the specifics of your enterprise with a comprehensive company overview. This section acts as the backbone of your blueprint. It provides critical details about your advisory firm's inception, its goals, and how it operates in the financial landscape.

The company overview addresses the "who, what, and why" of your business. It's where you define your target market, specify your services, and highlight your unique selling propositions. For instance, your firm might lean heavily on social media for client acquisition or financial education. If so, this is the place to note that.

Furthermore, understanding the nuances of cash flow and the financial structure of your business is crucial. This overview provides a clear snapshot for stakeholders, ensuring that they grasp the operational and financial vitality of your advisory firm. It sets the stage, offering context and clarity for the subsequent sections of your plan.

Industry Analysis

The industry analysis is a pivotal section in a financial advisor's business plan. It sheds light on the larger financial landscape in which the advisor operates. It encompasses a thorough competitive analysis, allowing the business owner to understand where their firm stands in relation to peers. 

Recognizing the strengths, weaknesses, opportunities, and threats in the industry provides invaluable insights. Such comprehension forms the bedrock of a sound marketing strategy. Staying informed about the industry's dynamics is essential. It allows an advisor to pivot when necessary, capitalize on emerging trends, and stay ahead in a competitive market.

Customer Analysis

In the realm of financial advising, understanding one's clientele is paramount. A thorough customer analysis provides insights into the specific needs and preferences of the clients in your target market. 

Financial advising clients are all different. Some are seeking wealth management to grow their assets. Others want financial planning for long-term stability, or retirement planning for a secure future. 

Still more need assistance with estate planning to ensure their legacy is passed on as intended. Recognizing these distinct requirements is crucial. 

By comprehensively analyzing the diverse financial objectives of clients, advisors can tailor their services more effectively. Ultimately, this will ensure they meet the unique goals and expectations of each individual they serve.

Competitive Analysis

A competitive analysis is a cornerstone for any RIA business plan. It involves diving deep into the market to understand how your financial advisory firm stacks up against competitors. What strategies are other firms using in their marketing plans? Which financial advisor business models are proving to be the most successful? 

By understanding the strengths and weaknesses of competitors, you can identify potential opportunities and threats in the marketplace. This information can be invaluable. It allows you to fine-tune your services, adjust your marketing strategies, and ultimately create a more resilient and successful business. After all, in the world of finance, knowledge truly is power.

Marketing Plan

Central to any investment advisor business plan is the marketing plan. It's where you lay out strategies to attract and retain clients. The marketing plan outlines how you'll position yourself in the industry. This includes the channels you'll use to reach potential clients and the tactics for engagement. 

Whether it's through social media campaigns, seminars, or referral programs, the marketing plan gives direction on promoting your services effectively. By aligning marketing efforts with overall business goals, you ensure that resources are used efficiently. Ultimately, this will drive growth and enhance your firm's reputation in the financial advisory landscape.

Operations Plan

The operations plan is a blueprint for the day-to-day functioning of a financial advisory firm. It outlines the nuts and bolts of how the business will run. From the client onboarding process to the management of resources. From the roles of members on your team to protocols for service delivery, the operations plan covers it all. 

A well-crafted operations plan ensures smooth operations, minimizes errors, and promotes a consistent, high-quality service experience for clients. Having this plan in place is essential to maintain efficiency, build trust, and nurture a growing client base.

Management Team

The management team section of a financial advisor's business plan highlights the individuals steering the firm towards its goals. It showcases the qualifications, experience, and expertise of key team members, underscoring their ability to execute the business's vision. 

By detailing their backgrounds and roles, potential investors or partners can gauge the leadership's competence and the firm's potential for success. This section provides reassurance to stakeholders that the business is in capable hands and that the team possesses the requisite skills and experience to drive growth, navigate challenges, and make sound financial decisions.

Financial Plan

The financial plan is a pivotal section of a financial advisor's business strategy, mapping out the fiscal foundation and anticipated growth of the firm. This section details the company's current financial status, projected revenue, expenses, and profitability. 

By laying out investment requirements, forecasting cash flows, and setting financial milestones, it offers a clear picture of the business's fiscal health and viability. Stakeholders, including potential investors and lenders, often scrutinize this portion to understand the sustainability of the business and to ascertain the potential return on investment.

Take Planning to the Next Level

Having created a business plan template is, unfortunately, only the first step to success. Lucky for you, Planswell has been perfecting the process of prospecting and closing deals for years. In fact, we’ve spent over $15 million on this learning process. 

We’ve developed a complete system advisors can use to boost their booking and close rate. We guarantee it.

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Financial Advisor Business Plan Sample

JUN.07, 2018

Do you want to start financial advisor business?

Do you want to start a financial advisor business? Well, there are many benefits of starting this financial advisor business plan, the biggest one of which is the extremely low initial investment required for its startup. Secondly, you can also start it from your home, or a small office or even a virtual location and can still make huge profits. The only problem associated with this business plan for a financial advisor  is that it is never easy for startups to find high-paying clients in the initial run. So, it is highly recommended that you prepare a comprehensive financial consultant business plan which will not only help you attract good clients but will also establish the basis of your company’s operations and future decisions. If you are wondering how to write a good business plan for financial advisor, here we are providing you with the business plan for a financial advisor  business startup named ‘Martin Financial Services’.

Executive Summary

2.1 the business.

Martin Financial Services will be a licensed and registered financial advisory company aimed at solving all your financial problems by providing exceptional financial advisory and consultation services. The company will be owned by Nick Martin, a renowned financial expert, and the company’s main office will be located in Downtown Chicago.

2.2 Management

The success of a startup heavily depends on its staff and management that’s why Martin planned it before developing his financial advisor business model . The company’s management will comprise of sales executives, financial analysts, and insurance consultants.

2.3 Customers

This sample business plan for a financial advisor position also outlines what are the main target customers for a financial advisory firm. Martin Financial Services will provide financial consulting services to individuals, organizations, and businesses located in Chicago.

2.4 Business Target

Our target is to balance the initial cost of the startup with earned profits and to achieve the net profit margin of $10k per month by the end of the first year.

Company Summary

3.1 company owner.

Martin Financial Services will be owned by Nick Martin, a business graduate from the University of Illinois. Martin has more than ten years’ experience of working with various financial organizations including Wells Fargo and Equifax.

3.2 Why the Business is being started

The financial advisor business plan is being started with the purpose of making profits in this industry while also providing quality services.

3.3 How the Business will be started

Before starting your own financial advisor business , you have to plan everything beforehand otherwise you have very lower chances of succeeding in it. Martin Financial Services is a well-planned venture and its exceptional planning will become one of the reasons behind its success. The company will be started in a leased office in Downtown Chicago. In addition to computer systems and usual office inventory, professional financial software will also be procured. The startup summary is as follows:

The detailed startup requirements are given below:

Services for customers

Considering the economic demands of today’s world, there are countless firms that are providing financial advisory services. You can do some research about them and find out what services they are offering to their customers. You can also find many financial advisor business plan free templates on the internet or you can take help from this sample business plan for financial planners . Deciding your services is extremely important since the planning of other subsequent components depend on it. Martin Financial Services will offer a variety of financial advisory and consulting services to its clients from United States. Our main services include:

• Insurance and Tax Consulting
• Accounting and Financial Services Consulting
• Budgeting and Financial Planning
• Financial Auditing
• Estate Planning
• Income Tax Preparation
• Mortgage, Pension, Retirement and Investment Advisory Services
• Asset Management
• Wealth Creation and Wealth Management
• Investment (Business Portfolio) Management

Marketing Analysis of financial advisor business

The most important component of an effective financial advisor business plan is its accurate marketing analysis that’s why Martin acquired the services of marketing experts to help know how to write a business plan for financial advisor and develop a financial advisor marketing plan template . The success or failure of a business plan for a financial advisor  totally depends upon its marketing strategic business plan which can only be developed on the basis of accurate marketing analysis. Marketing analysis is a must-do thing before you develop your financial advisor business plan. If you are starting on a smaller scale, you can do marketing analysis yourself by taking help from this business plan for a financial advisor  or any other financial advisor business plan template available online.

5.1 Market Trends

For finding the marketing trends before starting your business plan for a financial advisor , you can take help from this financial advisor business plan example or any other financial advisor business plan template free available online. This financial advisor marketing plan example also contains information about current industry and market statistics of financial advisory services. Financial advisory industry is one of the booming industries of the United States. Currently, the industry generates more than $56 billion annually with around 121,000 businesses employing more than 215,000 people across the United States. Furthermore, the industry grew by 8.1% over a course of 5 years from 2012 to 2017. This increase is attributed to the economic development and the increase in other industries of the country, thus creating more demand for financial consulting and advisory services.

5.2 Marketing Segmentation

It is very important to analyze the market segmentation of the future customers of your services before you start your business plan for a financial advisor  because a successful and efficient marketing strategy can only be developed after we completely know our potential customers. Our target market is the residential community as well as the corporate sector located in Chicago however, we will primarily focus on our clients from business sector. Our experts have identified the following type of target audience which can become our consumers in future:

The detailed marketing segmentation of our target audience is as follows:

5.2.1 Corporate Sector:

The biggest consumer of our services will be the corporate sector located in the Downtown Chicago ranging from small startups to established multinational companies. This group includes product manufacturers and distributors, real estate owners, hotels, restaurants and food companies, IT and software development firms, branding and advertising agencies as well as many other industries. These businesses will frequently need our advisory services for insurance and tax consultation, asset management, budgeting and financial planning, as well as investment management and auditing.

5.2.2 Institutions & Organizations:

Our second target group comprises of various institutions and organizations located in Manhattan including government organizations, schools, colleges, universities, non-profit organizations, religious and cultural institutes as well as social bodies. This group will also need our financial advisory services for addressing all their financial needs as well as in their budgeting and auditing.

5.2.3 Individuals:

Our third target group consists of individuals including both the employed and retired persons belonging to all age groups. This group will mostly need our services for getting advice and consultation related to mortgages, pension, retirement and investment. The detailed market analysis of our potential customers is given in the following table:

5.3 Business Target

Our main goal is to become the best financial advisory service in Chicago within next 10 years. This goal is not something that can be achieved easily. For achieving this goal, we will have to increase our revenue, create an exceptional clientele and establish a name across the country. Our main goal of the business plan for financial planner can be divided into three main business targets, which are as follows:

• To achieve the net profit margin of $10k/month by first year, $15k by second year, and $25k by third year
• To balance the initial cost of the startup with earned profits by the end of the first year
• To start an online financial advisory service by the end of the first year

5.4 Product Pricing

Product pricing is one of the most important factors in deciding the strategy for a business plan for a financial advisor . After considering the market demands and our current competition, we have priced all our products in the similar ranges as of our competitors.

Like marketing analysis, sales strategy is also an important component of financial advisor business plans so it must be given proper attention before you think about creating your own financial consultant business plan .

6.1 Competitive Analysis

As mentioned earlier, there are more than 121,000 financial advisory companies in the United States, so we can say that we have a tough competition ahead. In addition to that, many international and local banking companies also financial consultation services to their customers, thus making this field even more competitive. Although we have a lot of competitors, we hope to surpass all of them by providing exceptional quality services and unparalleled customer experience.

6.2 Sales Strategy

• We will carry out a large-scale advertising campaign on social media sites
• We will offer a 20% discount on our advisory and consultation services for the first three months of our launch
• We will arrange free financial consultation seminars in various organizations and companies and will thus promote ourselves

6.3 Sales Monthly

Our monthly sales from target groups are forecasted as follows:

6.4 Sales Yearly

Our yearly sales from target groups are forecasted as follows:

6.5 Sales Forecast

Our forecasted sales are given in the following column charts.

The detailed information about the company’s forecasted sales is given in the following table.

Personnel plan

Personnel plan is an important part of a business plan for financial advisor services since it gives an estimate about the staff you require along with their salaries. Martin has developed the following personnel plan for his company.

7.1 Company Staff

Martin will act as the General Manager of the company and will initially hire following people:

• 1 Accountant to maintain financial and other records
• 2 Sales Executives responsible to market and discover new ventures
• 6 Financial Analysts to provide advice on various financial matters
• 2 Insurance Consultant to provide consultation on insurance services
• 2 Customer Representatives to interact with customers
• 1 Front Desk Officer to act as a receptionist

All employees will be hired by following strict testing procedures and all of them will undergo 2 weeks training prior to onboarding.

7.2 Average Salary of Employees

The estimated salaries of the staff required are given in the following table. These salaries can deviate slightly but the total sum will nearly be the same.

Financial Plan

Just like the other plans, you must also prepare a detailed financial plan covering all financial aspects of your financial advisory startup. The financial plan should present a detailed map of the costs of startup, inventory, payroll, equipment, rent, utilities and how these costs will be covered by the earned profits. Also, make sure to carry out a detailed profit and loss analysis of your startup venture. While developing the financial plan, you can take help from various financial advisor business plan examples available online so as to know which things to include in it. Martin has developed the following financial plan for his company.

8.1 Important Assumptions

8.2 brake-even analysis.

8.3 Projected Profit and Loss

8.3.1 profit monthly.

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

8.5 Projected Balance Sheet

8.6 business ratios.

Download Financial Advisor Business Plan Sample in pdf

OGS capital professional writers specialized also in themes such as holding business plan , insurance agency business plan ,  business plan loan , tax preparation business plan , credit repair company business plan and many others.

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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Financial Services Business Plans

Written by Dave Lavinsky

Explore our specialized web page offering a comprehensive range of business plan examples tailored to the financial services industry. These meticulously crafted plans are ideal for financial advisors, fintech startups, banks, and investment firms, providing professional insights into critical aspects such as market analysis, industry analysis, operations,  and client acquisition . Each plan presents a structured approach for navigating the complexities of the financial sector, offering guidance for achieving operational excellence and sustainable growth.

This resource is an essential tool for financial professionals seeking to establish or expand their presence in a highly competitive and rapidly evolving industry.

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How to Choose the Right Financial Advisor — A Guide for Entrepreneurs Use this guide to select a financial advisor who not only understands your unique financial needs but also has the expertise, experience and connections to support your business and personal goals effectively.

By Shirl Penney • Apr 26, 2024

Key Takeaways

• Business owners need advisors who offer more than just trading skills; they should also assist in goal planning, risk management and legacy establishment.
• Advisors who grasp the unique demands of entrepreneurship are often entrepreneurs themselves.
• When selecting a financial advisor, entrepreneurs should prioritize finding someone with relevant experience guiding clients through various stages of business growth, managing unpredictable cash flow, crafting investment strategies and navigating complex tax scenarios.

Opinions expressed by Entrepreneur contributors are their own.

Because you're a business owner, your financial advisor should know more than how to trade securities. You need an advisor who can help you plan and work toward your financial goals , manage the risks you encounter along the way and build a legacy for the next generation. You need someone who understands the cycles and pressures of entrepreneurship and has a track record to prove it.

Advisors who understand that their entrepreneur clients require more than standard financial services are often entrepreneurs themselves. Entrepreneurial advisors tend to be based in independent "registered investment advisors," or RIAs, overseen by the Securities and Exchange Commission.

In this article, I'll share a few specific things entrepreneurs should look for when choosing a financial advisor .

Related: You Have to 'Date' Your Financial Advisor to Find the Right One — Here Are 3 Tips to Doing Just That.

Look for passion tempered by training and experience

Because they've had experience as RIA owners, these advisors know the stages of business development from startup and early growth through achieving scale and, in some cases, selling the enterprise. Motivated by a fascination with personal finance in the context of business ownership, these advisors either focus on entrepreneurs exclusively or maintain a healthy roster of business-owning clients as a passion project within a broader practice.

Enthusiasm is no substitute for expertise, however. An advisor who can make sense of your business and personal finances has experience managing unpredictable cash flow , crafting investment strategies that complement your business and navigating complex tax scenarios.

An advisor's experience can't be overstressed. Has a particular advisor successfully guided business owners through various stages of growth and increasing complexity? Does this advisor have smart things to say about your industry? If "yes," then it's likely he has navigated challenges similar to those you encounter and can offer advice that's practical and feasible.

Remember, emotion clouds judgment. Knowing your business is everything to you, an entrepreneurial advisor will work to keep you calm and focused — especially when the stakes are high.

Find an advisor who gets business and has connections

Some advisors who specialize in business-owning clients enjoy working with entrepreneurs from a variety of business types, while others prefer going deep into specific niches. The generalist can draw on varied scenarios when formulating solutions for your business, while the specialist enjoys the advantages of concentration — namely expertise and credibility — in your line of business.

The choice will depend on your field and your circumstances. Are you looking for an advisor versed in early-stage fundraising for technology startups, exit-planning options for dentists, or the needs of a franchise restaurant owner in fast-growth mode? The answer should color your selection.

An advisor suited to an entrepreneur like you will have strong connections in finance and finance-adjacent spheres outside wealth management. After all, advisors who can call on investment bankers , tax professionals, insurance consultants and legal experts can put you on solid ground when it comes to spotting industry trends, devising valuation strategies, managing risk and keeping everything on the up-and-up when it comes to tax and estate planning. An advisor with working relationships in these spheres can provide full-spectrum financial insights on your enterprise and perhaps open doors to broader business opportunities.

Related: Is Your Financial Advisor Right For You? Here's A Simple Test To See If It's Time To Move On.

Use these tips to find an advisor you can trust

A major factor in evaluating financial advisors is their potential as a long-term partner. Entrepreneurs should vet potential advisors by asking for references from other clients in similar business phases or industries. These insights can tell you a lot about the advisor's capabilities, work style and overall responsiveness.

Taking the time to check an advisor's professional certifications, compliance history and status as a fiduciary (viewable online at BrokerCheck ) are also essential steps for choosing a wealth manager. Fiduciaries, such as RIA-based advisors, are constrained to put their clients' interests first. Stockbrokers, meanwhile, adhere to a lower standard stipulating only that their advice be broadly "suitable." If you're still unsure whether your advisor is a fiduciary, ask for a signed pledge that will act for you in a fiduciary capacity.

An advisor's transparency about fee calculation and openness about the advisor's compensation sources are significant trust builders and must-haves for avoiding conflicts of interest. It's also critical that the relationship be collaborative. From the start, you want an advisor who proposes solutions that mesh with your personal and business goals. This shows the advisor has already taken time to understand your values and risk appetite and that they aim to provide meaningful advice.

Put "works well with me" at the top of your list

To assess this alignment, start by sharing your vision for and expectations of the relationship. Probe the advisor's investment philosophy and her approach to financial planning and portfolio construction in the context of business ownership. Ask how she tailors her advice to meet the specific needs of entrepreneurs, with case studies and anecdotes to illustrate her concepts. Meeting the team that supports the advisor can also provide insights into the depth and breadth of expertise the advisor's firm offers.

As mentioned, having experiences in common as business owners can support long-term collaboration between you and your advisor. Advisors who run their own businesses possess insight into the challenges and opportunities you face as an entrepreneur, resulting in appropriate advice.

Related: The Truth About Your Financial Advisor

Comprehensive advice for business owners should go beyond business and investment considerations. For most of us, after all, money is just a tool to help us accomplish our personal, family and philanthropic goals. A skilled advisor integrates these personal aspects of financial management with the business to ensure actions taken bolster other important facets of the entrepreneur's life.

Finding the right financial advisor is a crucial step for entrepreneurs eager to improve their financial health and make the most of their opportunities. A suitable advisor blends industry knowledge, experience, networking capabilities and a deep understanding of entrepreneurship. By choosing an advisor who can act as a partner, entrepreneurs can achieve financial strategies that support equally their business and personal goals.

Entrepreneur Leadership Network® Contributor

President and CEO of Dynasty Financial Partners

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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I’m a financial advisor: how to financially plan for different stages of retirement.

Planning for retirement isn’t a one-and-done kind of thing. There are many different stages of retirement, and it’s important to have a plan for each of them. What this means is that even if you already have a retirement plan, you’ll need to update or adjust it based on where you’re at in life and how well your current plan’s meeting your goals.

Find Out: 7 Bills You Never Have To Pay When You Retire Read More: 5 Genius Things All Wealthy People Do With Their Money

But what are the different stages of retirement, and how can you financially plan for them? GOBankingRates spoke with Joe Buhrmann (CFP, ChFC), a senior financial planning consultant at eMoney Advisor , and Sean Lovison (CFP, CPA), the founder and lead planner at Purpose Built Financial Services, LLC .

Here’s what they said.

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Planning During the ‘Pre-Retirement’ Stage

Pre-retirement is the first stage of retirement planning, and it starts during the early phases of your career.

“The mantra here is to make saving a sound, financial habit. ‘Save early; save often’ is the name of the game,” Buhrmann said. “Look to save at least as much in your employer-sponsored plan to receive the maximum employer-match. If you can, seek to save at least 10%-15% of your income.”

At that point, Buhrmann suggested speaking with your employer about automatically increasing how much of your annual income goes toward your retirement plan. This makes it easier to save even more as your income increases.

But don’t stop there. Now’s the time to start focusing on your other investments as well.

“Utilize target-date funds, which are geared towards your anticipated retirement date, to provide a single, diversified investment for your employer-sponsored plan,” Buhrmann said. “You may wish to utilize Roth contributions to your employer-sponsored plan at this stage of your career.”

Consider whether making pretax or after-tax contributions makes more sense based on your current earnings, career trajectory and long-term goals. Along with this, consider using a fintech platform that lets you connect your various accounts so you can monitor your finances as you go.

“This is the time for careful planning,” Lovison added.

This means analyzing your potential income sources and matching them with expenses, fine-tuning your savings goals, and making other financial considerations — like whether to downsize or relocate in retirement. As you approach the big day, make sure your assets align with your risk tolerance and goals — and make changes accordingly.

Check Out: Cutting Expenses in Retirement: 6 Home Items to Stop Buying

Focus On Wealth Accumulation

This is the next phase of retirement planning, though it can also be combined with the previous stage.

“The sooner, the better is the adage for retirement. Emphasize the power of compounding and encourage consistent contributions in the most tax-efficient way. [People] in this stage benefit from growth-focused investment strategies to maximize their retirement funds,” Lovison said.

“The focus is on building your nest egg. This stage involves maximizing contributions to retirement savings plans, strategically selecting investments, and managing debt,” he continued.

Mid-Career Retirement Planning

Around your late 30s to mid-40s or so is also your mid-career stage — depending on when you started working and your retirement timeline, of course.

“By now, you’re likely to have collected a few employer-sponsored plans from former employers such as 401(k)s. Seek to simplify your finances by consolidating these plans — either into your current employer’s plan (if allowed) or by rolling them into an IRA,” Buhrmann said. “As your assets have begun to grow, ensure that you’re properly allocated and diversified across types of asset classes.”

Depending on your financial situation, you may also want to speak with a financial advisor who can help you put together a plan to ensure you’re saving enough money to meet your goals and that your assets are properly managed and allocated.

Make sure you’re taking full advantage of any employer-sponsored benefits like retirement accounts and health savings accounts (HSAs).

“Consider maximizing your contributions to HSAs, and try to avoid using them for current healthcare expenses so that you’ll have access to a tax-free source of funds for healthcare expenses in retirement,” Buhrmann said.

Preparing During Your Late Career

About five to 10 years before retirement is when you’re going to want to make some more changes to your financial plan. In particular, be more aggressive with your retirement plan contributions and cut back on risky investments.

“You’re in the home stretch now. Take maximum advantage of employer-sponsored plans and HSAs,” Buhrmann said. “Begin to dial down the risk tolerance of your investments as retirement approaches. Now is not the time to ‘swing for the fences’ to make up for lost time.”

Now’s also the time to review all of your current and anticipated expenses in retirement. Doing this at least a few years ahead of time will give you a clearer picture of your financials and what other changes you might need to make as you approach the end of your working years.

“Put the final touches on that financial plan. Begin to address major decisions, such as when to claim Social Security and pension benefits, how you will address any pre-Medicare health insurance needs, and so on,” Buhrmann said.

If you decide you need to be more liquid, consider boosting your cash position, too.

“While working, your emergency fund may have had a few months of essential expenses. During retirement, consider having a ‘safe bucket’ of funds that could cover a couple years of withdrawals, so you can reduce the impact of needing to tap your investment accounts during a down market,” Buhrmann said.

And if you have any debts, review them to see if it makes sense to bring any of those with you into retirement or not.

Post-Retirement Planning

Just because you’ve retired doesn’t mean you should stop financially planning. If you’re in good health, there’s still a lot to live and that means a lot of time for potential changes.

The first part of your post-retirement phase is what Buhrmann called the “go-go years.”

“You’re most active at this point in retirement. You may be busy with children and grandchildren, hobbies, or travel,” he said. “Keep an eye on your spending. See how your actual spending aligns with your planned spending. Be cautious of overspending and taking on additional debt.”

At this point, you might be a bit more flexible with your withdrawal strategy — though you’ll still want to be cautious.

“While many subscribe to the 4% withdrawal strategy, your attainable withdrawal percentage can vary depending on investment returns, life expectancy, and so on,” Buhrmann said. “For retirees in ‘the red-zone’ — those few years prior to retirement and the early years of retirement — it’s critical to monitor your drawdown rate to ensure that your money lasts as long as you do.”

You might also want to simplify your finances. This could mean consolidating your different retirement accounts so you can better track your expenses and assets.

“If you haven’t done so already, now is the time to sit down and organize your financial affairs,” Buhrmann said. “Make sure you have a will, durable power of attorney, and advanced medical directives in place. Ensure family members know their role in your plans.”

As you continue to enjoy your retirement life, Buhrmann also suggested reviewing your housing situation and making changes as necessary — whether that means downsizing and freeing up home equity for additional retirement money or something else. He also suggested keeping an eye on your required minimum distributions (RMDs) and donating to charity if that’s something you’d like to do.

Planning for Your Final Years of Retirement

As you approach your final years of retirement, now’s a good time to solidify your plans and get your affairs in order.

“If you haven’t put your final plans in place, now is certainly the time to act on that,” Buhrmann said. “Make sure you have a will, durable power of attorney, and advanced medical directives in place. Ensure family members know their role in your plans. Consolidate assets to allow your financial caretaker to easily distribute funds on your behalf.”

Common Mistakes During Retirement Planning

A lot goes into retirement planning — not surprising considering the whirlwind that is life. But there are a few common mistakes you’ll want to try to avoid as you go.

One is underestimating how long you’ll live.

“People often underestimate how long their retirement might last. Planning for a 25-30-year retirement is crucial to avoid running out of money,” Lovison said.

Another is not starting early enough. Starting as early as possible can help you achieve your retirement and other financial goals.

And don’t forget about investing. You’ll want to be conservative at certain stages in life, but perhaps not all of them.

“Fear can lead to investment choices that don’t keep pace with inflation,” Lovison said. “Balancing risk with the need for growth throughout all stages is crucial.”

More From GOBankingRates

7 Bills You Never Have To Pay When You Retire

6 Hybrid Vehicles To Stay Away From Buying

Here's How to Add $200 to Your Wallet -- Just For Banking Like You Normally Would

I Retired in My 70s: Here's My Monthly Budget

This article originally appeared on GOBankingRates.com : I’m a Financial Advisor: How To Financially Plan for Different Stages of Retirement

More From Forbes

The dol’s final fiduciary rule is here. see what’s inside.

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The US DOL finally succeeds in passing its much anticipated final fiduciary rule. This landmark rule ... [+] aims to safeguard the interests of retirement savers by redefining the investment advice fiduciary under the Employee Retirement Income Security Act and the Internal Revenue Code.

This week the Department of Labor unveiled its much-anticipated final fiduciary rule, set to take effect on September 23, 2024. This landmark rule aims to safeguard the interests of retirement savers by redefining the investment advice fiduciary under the Employee Retirement Income Security Act and the Internal Revenue Code.

The final rule is readily available on the DOL website, awaiting its official publication in the Federal Register on April 25, 2024. The rule's final language reflects feedback received during a brief comment period, offering insights into the changes made from the proposed rule. In short, it requires retirement investment advisors to provide prudent, loyal, and honest advice free from overcharges.

The rule places high expectations on fiduciaries to recommend investments that do not favor their interests over the retirement savers'. Additionally, financial institutions supervising these advisors are required to enforce policies and procedures that manage conflicts of interest and ensure adherence to these guidelines.

Over the past four decades, the DOL has navigated how ERISA's fiduciary duties of prudence and loyalty converge with beneficiaries' best interests. The rule was initially submitted for review by the Office of Management and Budget in early spring, with expectations set for a release shortly thereafter. By April 10, the rule had been cleared by the White House’s Office of Management and Budget, setting the stage for this week’s announcement.

The updated definition of fiduciary duty comes into effect on September 23, 2024. It covers cases where financial services providers offer paid investment advice to retirement plan participants, individual retirement account owners, and plan officials who manage plans and their assets.

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What’s In The New Rule?

The rule aims to prevent advisors from prioritizing their interests over their clients', acknowledging that they deserve fair compensation for assisting retirement investors in pursuing their savings goals and retiring with dignity. It redefines fiduciary investment advice to include more types of advice, such as one-time advice about rollovers to IRAs or annuity purchases, thus broadening the definition of who is considered a fiduciary. It introduces a "trust and confidence" standard, replacing the previous five-part test, and applies not only to retirement plans but also to IRAs and HSAs.

Registered Investment Advisers have consistently been held to a fiduciary standard since the Investment Advisers Act of 1940, making the new fiduciary rule largely redundant for them as it enforces an obligation they already meet. The rule, however, significantly affects brokers, who were long held to a less stringent suitability standard that did not prioritize the client's best interests to the same degree. This marks a notable shift, elevating brokers' responsibilities to align more closely with the fiduciary standards long embraced by RIAs.

Previously, certain types of plan-level advice were not covered under the SEC’s Regulation Best Interest . The new rule effectively closes this gap by ensuring that fiduciary responsibilities are uniformly applied across all forms of investment advice related to retirement plans. This adjustment is crucial in standardizing the level of protection afforded to investors, aligning it more closely with the stringent standards expected in other areas of financial advice.

. The rule establishes higher standards for investment advisors, mandating honest and prudent advice ... [+] while mitigating conflicts of interest.

This change subjects them to stringent ERISA enforcement provisions, which notably include a private right of action. Consequently, they face increased legal risks; non-compliance with fiduciary standards could lead to class action lawsuits if their advice deviates from their duty to the client.

"America's workers and their families rely on investment professionals for guidance as they save for retirement," said Acting Labor Secretary Julie Su in a press release . "This rule protects the retirement investors from improper investment recommendations and harmful conflicts of interest. Retirement investors can now trust that their investment advice provider is working in their best interest and helping to make unbiased decisions."

With this rollout, the Biden-Harris administration highlight recent analysis by the Council of Economic Advisers showing that conflicted advice on a single investment product—fixed index annuities—could cost savers up to $5 billion per year. Such conflicts can diminish retirement investors' returns and incur expenses that erode workers' savings.

The rule also facilitates fair competition among investment professionals by addressing discrepancies in the standards applied to advice providers based on the products they recommend. Firms and investment professionals acting in the best interest of retirement investors should not face penalties for responsibly managing their conflicts of interest and making prudent and loyal recommendations.

The DOL press release acknowledges that the current definition of investment advice fiduciary, adopted in 1975, was crafted in a time when individual retirement accounts were less common, and 401(k) plans did not exist. In today's world, individual plan participants and IRA owners are expected to make important, complex financial decisions.

"These new rules update regulations created nearly a half-century ago that simply are not providing the protections America's workers need and deserve for their retirement savings so that they can retire with dignity," said Assistant Secretary for Employee Benefits Security Lisa M. Gomez in the DOL’s press release. "The investment landscape has changed, the retirement landscape has changed, and it is critical that our regulations are responsive to those changes so that workers can reach the secure retirement that they work for decades to finally achieve."

The DOL’s newly unveiled fiduciary rule signifies a significant development in the protection of retirement savers' interests. The rule establishes higher standards for investment advisors, mandating honest and prudent advice while mitigating conflicts of interest. By aligning regulations with contemporary retirement and investment landscapes, the rule aims to foster fair competition and provide workers with the tools to make impartial, well-informed decisions as they pursue confident retirements.

Brian Menickella is the founder and managing partner at Beacon Financial Services , a broad-based financial advisory firm based in Wayne, PA.

Securities and Advisory services offered through LPL Financial, a registered investment advisor. Member FINRA / SIPC .

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice.

Fixed Indexed Annuities (FIA) are not suitable for all investors. Annuities are long-term, tax-deferred investment vehicles designed for retirement purposes. No investment strategy assures a profit or protects against loss.

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As a financial planner, I give my clients 4 tips to make their money last a lifetime

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• I'm a financial planner, and I remind clients to look at a long timespan and plan for the worst.
• There's no easy answer to earning more money, but it's important to not ignore that factor.
• I encourage my clients to focus less on frugality and more on how they'll invest in the future.

As a certified financial planner , my goal is to help self-made professionals build wealth that they can enjoy throughout their lives. To do that, we have to make sure their money will last throughout their lifetimes.

But we also need to make sure that clients actually have opportunities to use their money now  while they're young, healthy, and able to fully experience life.

Here's the process we use to build long-term financial plans that work, including what your investment strategy should consider and why living frugally is a poor strategy for getting rich.

1. Plan for change

Your goals for retirement planning will probably evolve over time. The person you are today will not be the same person who retires in 10, 20, or 30 years.

A long-term financial plan that works accounts for inevitable shifts in goals, values, priorities, and circumstances. Although you might not know exactly what will change, you can still plan for an evolving life.

First, save more than you think you need to when you can. If you find you have excess cash flow, don't default to spending it or upgrading your lifestyle. Direct that money to investments instead so you can grow wealth.

Avoid unrealistic assumptions about future income and expenses. For my own planning, I assume a lower-than-expected growth in income and a higher-than-expected run rate for my cost of living.

When making decisions, opt for choices that allow you to walk away at a low cost. This makes it possible to change or adjust course as needed. Be cautious about decisions that demand fixed commitments (like buying a house) that are difficult to reverse.

2. Look for ways to earn more

Personally, I've shifted from "retire as soon as possible" to a more balanced approach to my financial goals.

I save less money now because I want to use some of my income for important experiences throughout life. I don't want to save everything for use on a distant (and unreliable!) "someday" in the future.

My financial plan can accommodate this choice for two main reasons:

First, I saved aggressively when I could for almost a decade. I've saved at least 30% to 40% of my income . The fact I did so in the past gives me increased flexibility now.

I also put a lot of time and energy into earning more money through growing my business.

If you want to grow wealth, increasing your income will fast-track your efforts. Too many people who want to throw out money tips ignore this reality.

I understand why no one wants to talk about it. Earning more is not easy to do, and there's no one piece of prescriptive advice to give that will help everyone.

But we cannot ignore the importance of making more money if our goal is to create more wealth. There are many avenues that can get you to a higher income, so you don't need one right answer. You need to select and stick with a strategy that makes sense for you.

3. Remember, frugality will only get you so far

No matter what you want to do, you'll need money to afford your chosen lifestyle in the future. And you won't be able to work to earn an income forever. By choice or by circumstance, you will eventually need another way to pay for your needs other than your own work.

This means we must recognize the necessity of saving money and investing . There's no disputing that. The question is how .

Living frugally to get wealthy is possible; it's a simple fact that the lower your expenses are, the more you can save.

But it's an inefficient path to building wealth. There are only so many costs you can cut. And only saving money misses out on opportunities to create assets that increase in value over time.

4. Develop an investment strategy

If you want to grow wealth without pinching pennies, you have to invest — and you have to do that wisely.

A sound investment strategy needs to consider:

• What investment vehicles to use
• The right asset allocation based on your goals and your time horizons
• The expenses associated with your chosen investments and how that may impact your returns
• How to leverage diversification across your portfolio as well as across the specific  brokerage accounts  or assets you invest into
• The tax implications of your choices
• Mistakes to avoid, including speculating, market timing, and taking on too much (or the wrong type) of risk

That just scratches the surface of comprehensive investment management here. But in general, if you want to build an investment strategy that will help you grow wealth, you want to look for:

• Long-term time horizons : The longer your money can be invested, the better your odds of a successful outcome where you see growth of your assets.
• Risk-adjusted strategies : You want to take on enough risk to see a return, but not more than you can actually afford to realize (or more than you need to meet your goals).
• Globally diversified portfolios : Remember that there is a literal world of financial markets out there. Throwing your money into one to three index funds that are all US large-cap stocks or US bonds is not a good example of true diversification.

One final key to keep in mind: You're better off sticking with a decent strategy that works over time than constantly hopping from one thing to another in search of the best strategy ever. Consistency is an underrated element on the road to building wealth.

Watch: 6 simple investing tips for beginners

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I’m a Financial Advisor: How To Financially Plan for Different Stages of Retirement

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Planning for retirement isn’t a one-and-done kind of thing. There are many different stages of retirement, and it’s important to have a plan for each of them. What this means is that even if you already have a retirement plan, you’ll need to update or adjust it based on where you’re at in life and how well your current plan’s meeting your goals.

But what are the different stages of retirement, and how can you financially plan for them? GOBankingRates spoke with Joe Buhrmann (CFP, ChFC), a senior financial planning consultant at eMoney Advisor , and Sean Lovison (CFP, CPA), the founder and lead planner at Purpose Built Financial Services, LLC .

Here’s what they said.

Planning During the ‘Pre-Retirement’ Stage

Pre-retirement is the first stage of retirement planning, and it starts during the early phases of your career.

“The mantra here is to make saving a sound, financial habit. ‘Save early; save often’ is the name of the game,” Buhrmann said. “Look to save at least as much in your employer-sponsored plan to receive the maximum employer-match. If you can, seek to save at least 10%-15% of your income.”

At that point, Buhrmann suggested speaking with your employer about automatically increasing how much of your annual income goes toward your retirement plan. This makes it easier to save even more as your income increases.

But don’t stop there. Now’s the time to start focusing on your other investments as well.

“Utilize target-date funds, which are geared towards your anticipated retirement date, to provide a single, diversified investment for your employer-sponsored plan,” Buhrmann said. “You may wish to utilize Roth contributions to your employer-sponsored plan at this stage of your career.”

Consider whether making pretax or after-tax contributions makes more sense based on your current earnings, career trajectory and long-term goals. Along with this, consider using a fintech platform that lets you connect your various accounts so you can monitor your finances as you go.

“This is the time for careful planning,” Lovison added.

This means analyzing your potential income sources and matching them with expenses, fine-tuning your savings goals, and making other financial considerations — like whether to downsize or relocate in retirement. As you approach the big day, make sure your assets align with your risk tolerance and goals — and make changes accordingly.

Focus On Wealth Accumulation

This is the next phase of retirement planning, though it can also be combined with the previous stage.

“The sooner, the better is the adage for retirement. Emphasize the power of compounding and encourage consistent contributions in the most tax-efficient way. [People] in this stage benefit from growth-focused investment strategies to maximize their retirement funds,” Lovison said.

“The focus is on building your nest egg. This stage involves maximizing contributions to retirement savings plans, strategically selecting investments, and managing debt,” he continued.

Mid-Career Retirement Planning

Around your late 30s to mid-40s or so is also your mid-career stage — depending on when you started working and your retirement timeline, of course.

“By now, you’re likely to have collected a few employer-sponsored plans from former employers such as 401(k)s. Seek to simplify your finances by consolidating these plans — either into your current employer’s plan (if allowed) or by rolling them into an IRA,” Buhrmann said. “As your assets have begun to grow, ensure that you’re properly allocated and diversified across types of asset classes.”

Depending on your financial situation, you may also want to speak with a financial advisor who can help you put together a plan to ensure you’re saving enough money to meet your goals and that your assets are properly managed and allocated.

Make sure you’re taking full advantage of any employer-sponsored benefits like retirement accounts and health savings accounts (HSAs).

“Consider maximizing your contributions to HSAs, and try to avoid using them for current healthcare expenses so that you’ll have access to a tax-free source of funds for healthcare expenses in retirement,” Buhrmann said.

Preparing During Your Late Career

About five to 10 years before retirement is when you’re going to want to make some more changes to your financial plan. In particular, be more aggressive with your retirement plan contributions and cut back on risky investments.

“You’re in the home stretch now. Take maximum advantage of employer-sponsored plans and HSAs,” Buhrmann said. “Begin to dial down the risk tolerance of your investments as retirement approaches. Now is not the time to ‘swing for the fences’ to make up for lost time.”

Now’s also the time to review all of your current and anticipated expenses in retirement. Doing this at least a few years ahead of time will give you a clearer picture of your financials and what other changes you might need to make as you approach the end of your working years.

“Put the final touches on that financial plan. Begin to address major decisions, such as when to claim Social Security and pension benefits, how you will address any pre-Medicare health insurance needs, and so on,” Buhrmann said.

If you decide you need to be more liquid, consider boosting your cash position, too.

“While working, your emergency fund may have had a few months of essential expenses. During retirement, consider having a ‘safe bucket’ of funds that could cover a couple years of withdrawals, so you can reduce the impact of needing to tap your investment accounts during a down market,” Buhrmann said.

And if you have any debts, review them to see if it makes sense to bring any of those with you into retirement or not.

Post-Retirement Planning

Just because you’ve retired doesn’t mean you should stop financially planning. If you’re in good health, there’s still a lot to live and that means a lot of time for potential changes.

The first part of your post-retirement phase is what Buhrmann called the “go-go years.”

“You’re most active at this point in retirement. You may be busy with children and grandchildren, hobbies, or travel,” he said. “Keep an eye on your spending. See how your actual spending aligns with your planned spending. Be cautious of overspending and taking on additional debt.”

At this point, you might be a bit more flexible with your withdrawal strategy — though you’ll still want to be cautious.

“While many subscribe to the 4% withdrawal strategy, your attainable withdrawal percentage can vary depending on investment returns, life expectancy, and so on,” Buhrmann said. “For retirees in ‘the red-zone’ — those few years prior to retirement and the early years of retirement — it’s critical to monitor your drawdown rate to ensure that your money lasts as long as you do.”

You might also want to simplify your finances. This could mean consolidating your different retirement accounts so you can better track your expenses and assets.

“If you haven’t done so already, now is the time to sit down and organize your financial affairs,” Buhrmann said. “Make sure you have a will, durable power of attorney, and advanced medical directives in place. Ensure family members know their role in your plans.”

As you continue to enjoy your retirement life, Buhrmann also suggested reviewing your housing situation and making changes as necessary — whether that means downsizing and freeing up home equity for additional retirement money or something else. He also suggested keeping an eye on your required minimum distributions (RMDs) and donating to charity if that’s something you’d like to do.

Planning for Your Final Years of Retirement

As you approach your final years of retirement, now’s a good time to solidify your plans and get your affairs in order.

“If you haven’t put your final plans in place, now is certainly the time to act on that,” Buhrmann said. “Make sure you have a will, durable power of attorney, and advanced medical directives in place. Ensure family members know their role in your plans. Consolidate assets to allow your financial caretaker to easily distribute funds on your behalf.”

Common Mistakes During Retirement Planning

A lot goes into retirement planning — not surprising considering the whirlwind that is life. But there are a few common mistakes you’ll want to try to avoid as you go.

One is underestimating how long you’ll live.

“People often underestimate how long their retirement might last. Planning for a 25-30-year retirement is crucial to avoid running out of money,” Lovison said.

Another is not starting early enough. Starting as early as possible can help you achieve your retirement and other financial goals.

And don’t forget about investing. You’ll want to be conservative at certain stages in life, but perhaps not all of them.

“Fear can lead to investment choices that don’t keep pace with inflation,” Lovison said. “Balancing risk with the need for growth throughout all stages is crucial.”

More From GOBankingRates

• 7 Bills You Never Have To Pay When You Retire
• 6 Hybrid Vehicles To Stay Away From Buying
• Here's How to Add $200 to Your Wallet -- Just For Banking Like You Normally Would
• I Retired in My 70s: Here's My Monthly Budget

Share This Article:

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A death certificate is also acceptable for this purpose but only one of these two options are necessary.

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Once your submission is completed, we will fax or email a proof for review prior to publication in the newspaper. This proof includes price and days the notice is scheduled to appear.

Please review the proof carefully. We must be notified of errors or changes before the notice appears in the Pioneer Press based on each day’s deadlines.

After publication, we will not be responsible for errors that may occur after final proofing.

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Pre-payment is required for all obituary notices prior to publication by the deadline specified below in our deadline schedule. Please call 651-228-5263 with your payment information after you have received the proof and approved its contents.

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• The minimum charge is $162 for the first 10 lines.
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Please follow deadline times to ensure your obituary is published on the day requested.

MEMORIAM (NON-OBITUARY) REQUEST

Unlike an obituary, Memoriam submissions are remembrances of a loved one who has passed. The rates for a memoriam differ from obituaries.

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Please submit your memoriam ad to [email protected] or call 651-228-5280.

Business | Your Money: Don’t treat your 401(k) like an ATM

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Today's Paper

• Government & Politics
• Environment

An alarming article in the Wall Street Journal recently reported a growing number of people using their retirement accounts like cash machines — even to cover emergencies. About a quarter of 401(k) account owners who do tap their funds prematurely borrow an average of 11% of their account assets. And even if roughly 90% of those borrowers pay the loans back on time, 1 in 10 will struggle to do so or simply never pay the money back.

Today’s article discusses why you should always resist the urge to take early withdrawals from your 401(k), either through loans or hardship distributions.

Retirement plans use incentives and penalties specifically designed to keep you from tapping your nest egg until later in life. Contributions to a traditional 401(k) plan are made with pre-tax dollars, meaning if you have a retirement plan at work, you never see the money contributed to your account. It’s deducted from payroll before you get your paycheck.

However, if you take withdrawals from these traditional accounts, the IRS will require you to pay income tax on the full amount, plus often a 10% early withdrawal penalty if you are age 59½ or younger. It’s a strong incentive not to use this money before you retire.

Rules on loans and hardship withdrawals are designed to discourage early withdrawals

Despite the stiff penalties for taking money out early, most 401(k) plans allow you to borrow up to 50% of your vested balance, to a limit of $50,000, and for up to five years. On the surface, it seems like a great deal: Funds can be used for any reason and, because the funds are borrowed and not withdrawn, the loan is tax-free. Even better, you’re allowed to repay the loan gradually — including both principal and interest — and you pay the principal and interest to yourself, often at lower rates than you can get at a bank.

If this sounds too good to be true, it is! We’ll explain why in a minute.

The IRS also allows withdrawals for hardship-related reasons, such as preventing evictions, paying medical and educational expenses, or becoming permanently disabled. Hardship loans are marginally better than traditional loans because they do not need to be repaid. But they do have their own set of rules. For example, the amount of the withdrawal is limited to the amount necessary to satisfy that need. In addition, you’ll be taxed on the amount withdrawn (unless withdrawals are made from after-tax Roth contributions). Finally, you won’t be able to roll the distribution amount over to an IRA or another plan.

The Bipartisan Budget Act of 2018 and SECURE Act 2.0 relaxed some of the rules around taking hardship loans, and that, in part, has made them more popular as sources of emergency cash.

Why taking a loan is not a great idea

From a tax perspective, taking a loan from your 401(k) is inefficient. For one thing, you must pay the loan back with after-tax dollars. This means repayment will cost you more than your original contributions. For example, if you’re in the 24% tax bracket, every dollar you earn to repay your loan leaves you with only 76 cents for that purpose; the rest goes to income tax.

Furthermore, if you take a loan, you lose the earnings on your money while it’s outside the account, creating a huge opportunity cost. If the return on your 401(k) balance is 8% for a year in which you borrowed funds, for example, the effective interest on your loan is 8% — that’s an expensive loan!

Should you lose your job, you’ll have to repay the loan more rapidly — generally by the due date of your next tax return — when you already could be financially vulnerable.

Finally, if you default on the loan repayment, the amount you still owe converts to a withdrawal, and income tax and possible penalties will be due.

The law of unintended consequences

One of the reasons the use of hardship loans has increased is that more employers, to improve retirement security for their workers, are auto-enrolling them into the plans. This means a worker must opt out of their plan if they don’t want to save for retirement. The positive effect is that workers immediately begin to build a nest egg without thinking about it. On the other side, some participants often don’t take the time to understand the rules and penalties that come with participating in a workplace plan and view their 401(k) as a ready source of cash. In fact, according to data from Vanguard, 3.6% of its plan participants took early withdrawals from their accounts in 2023 for financial emergencies, up from a pre-pandemic average of about 2%.

This is not to minimize the very real hardships people were facing. In 2022 and 2023, everyday costs of gas and groceries were going up, and credit card debt began to rise significantly. Nearly 40% of those who took hardship distributions last year did so to avoid foreclosure. More than 75% of hardship distributions totaled $5,000 or less.

In a way, the success that 401(k) plans have recently enjoyed in getting more people to save and invest through auto-enrollment is sowing the seeds of a potential long-term crisis — the retirement savings gap is proving stubbornly difficult to close.

Unless it’s their only recourse, we advise most people against taking a loan from their 401(k). People think they will pay back the loan later, but in our experience, it rarely happens. The tax consequences of paying a loan back with after-tax money erode the value of your hard-earned retirement savings and potentially put you on the sidelines while you service the loan. Moreover, taking a loan could be a red flag that you are living beyond your means and need to consider changes to your lifestyle.

A better approach to the “nuclear loan option” is to build a more liquid emergency fund that will pay for six months or more of living expenses, leaving your retirement fund to build long-term wealth where it’s needed — for your retirement.

Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at [email protected] . Securities offered through LPL Financial, member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.

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