Elixir Consulting has shared a number of insights for what it says is the growing number of advisers inquiring about starting up their own financial planning business.
In its June newsletter, Elixir Consulting Business Coach, Lana Clark, suggests that advisers considering a move to their own practice start by undertaking some honest soul-searching as to exactly why they wish to take this step in the first place.
Ms Clark suggests prospective practice owners ask themselves whether they are really self‐employment material or whether they have an ’employee’ mindset. She points out that the skills and disciplines required to successfully run a business are different to those required to be a successful financial planner and that a successful practice owner needs both sets of skills.
Other tips and suggestions offered by Ms Clark include:
- Addressing the financial implications of becoming your own boss. This includes:
- A clear agenda as to what the practice owner is prepared to spend in order to ‘… get the job done’
- The imperative of understanding and monitoring cashflow issues
- The vision for the business and the need to articulate this vision in a business plan that should be considered a dynamic document to be reviewed and updated regularly
- The importance of compliance and understanding that “… a compliant business is about doing the right things by your clients…”
On the subject of managing staff, Ms Clark points out that an adviser taking people with them from one business into another may be a mistake because they may never get used to the adviser’s rules or the new culture in which they wish to operate. Ms Clark also warns that “While you may be successful at managing relationships with clients, managing staff is a completely different experience.”
In making the transition to running their own practice, Ms Clark encourages advisers to:
- Do your homework during planning phase
- Understand the opportunities
- Be honest in your reflection of your own ability and propensity to be able to do what it takes to survive and thrive in business
- ‘Take the plunge’ with the intention of ‘running it like a business’ from the very beginning
- Be aware that you will no longer have the same safety net that you had when employed
Advisers can click here to access the full article.
