The money management business is one of the most promising and stable ground floor home based businesses around.  The recession is clearly making an impression upon America and the hardest hit are those with limited income which forced them to seek out assistance with planning for the future and financial matters. As a result, you can get involved with this booming industry as a money management consultant. You’ll be helping clients manage their finances, debts, taxes, and investments. Those who are interested in getting started now should first make sure they pass their test to become a Certified Financial Planner.

How to Start a Money Management Business

People can set financial goals and devise a plan of action to achieve them with the assistance of a financial advisory company. Employees of the company who analyze investments, insurance, budgeting, and other financial products on behalf of clients. Due to their deep understanding of both fundamental and complicated financial concepts, they create strategies for clients and play a crucial role in today’s society. Additionally, they can serve as a coach or guide and teach their clients how to create their own financial plans.

The majority of individuals perceive money to be intrinsically complex, so a financial planning company fills in the knowledge gap while offering clients significant support and resources. The top financial planning companies offer more than simply goods and services. They change people’s lives and encourage them to reflect carefully and thoughtfully on money and how it affects their lives and the planet.

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Follow the Rules

When leaving their current employment, aspiring wealth management entrepreneurs must make sure they are acting properly and politely. Employees in the financial services industry frequently have legal duties to their employers that preclude them from working on or for a competing firm or soliciting clients for outside services. Non-compete agreements that prohibit some workers from working in the financial services sector for a certain amount of time after leaving their jobs are also common, though these agreements are frequently breached in certain situations.

Entrepreneurs should take these contractual commitments seriously to avoid being sued and to follow good manners. To prevent any issues with their prior employment, entrepreneurs should, for example, avoid working on their new firm during business hours, wait to contact clients until they have left their employer, and approach former clients diplomatically after the fact.

registration and licensing

If your assets under management are less than $25 million and you plan to make any kind of investments on behalf of your clients, register with your state’s securities regulator. The SEC requires larger AOMs to register. The Uniform Investment Adviser Law Examination, also known as the Series 65 exam, is needed by most states. To take it, register on the FINRA website. If you possess another financial qualification, however, your state might waive the Series 65 exam. The Investment Adviser Registration Depository system is used to submit Form ADV, Parts 1 & 2, including Form U4, which is the last requirement for legally becoming a money manager. Avoid skipping the licensing because there may be serious consequences.

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setting up shop

Opening your money management firm is similar to starting any other business once you have taken care of all the legal prerequisites to be a money manager. Consult your local government for information on business permits and zoning regulations that may impact where you can place your company. Get liability, errors and omissions, and other insurance, and establish a legal entity such as an LLC or C-corporation. According to Charles Schwab, which offers assistance to money management businesses, the price for a stockbroker switching to independent money management can be anywhere between $15,000 and $75,000, depending on the amount of assets under administration. Using a large broker-services dealer’s can provide your company access to record keeping, reporting, custodial, legal, and even marketing services, or you can set up such services yourself.

your client base

Typically, stockbrokers, accountants, bankers, insurance agents, and other professionals in the financial services business found independent money management companies. Typically, they already have a clientele list. Others who enter the market are typically private investors who draw a following of clients who request that the investor manage their money as well. Before starting your own business, keep in mind that your running costs could be between 30% and 50% of your client fees, which could be a flat annual charge or a percentage of assets under management. In either case, increasing the amount of money you have under management will increase your profit.

Develop a Pitch

In order to pay their employees and maintain their new business, most entrepreneurs need to get started right once after leaving their previous jobs. Reaching out to former customers while keeping the guidelines in mind is frequently the first step. Entrepreneurs should prepare a persuasive proposal for these former clients that explains why they should transfer their accounts before they get to this point. Entrepreneurs face difficulties when dealing with these former clients and trying to draw in new customers because newly founded enterprises have no reputation (apart from the owner’s) and a high amount of early solvency risk.

The most effective proposals highlight the entrepreneur’s skill sets and advantage over bigger organizations. For instance, the new company might be an expert in finding the finest prospects using computer algorithms. The smaller client base of smaller wealth management companies allows them to offer more individualized client service, guaranteeing that their account receives more attention and maximizing results. This is something a new owner may also bring up.

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Enlist Professionals

The process of starting a new wealth management company can be difficult, time-consuming, and require substantial legal, regulatory, and compliance work. While many of these concepts may be familiar to financial advisors, setting them up frequently necessitates expert assistance. The good news is that more businesses are emerging to assist financial advisors in starting their own practices. In return, these businesses can demand a consultancy fee, a share of the company’s assets, or even an equity investment. For example, Tru Independence assists ambitious business owners with everything from office space selection and design to registered investor advisor (RIA)/broker-dealer registration and credit and lending facilities.

Independent financial advisors should think about hiring professionals to create a professional-looking website, business cards, and other marketing materials in addition to having a strong legal foundation. Professional consultants can also be helpful in avoiding the hiring of full-time staff to undertake straightforward jobs like bookkeeping, accounting, or even secretarial responsibilities. This can help keep expenses low early on without compromising quality.

Financial Planning Tips for Business Owners

Separate your personal and business goals

One of the biggest mistakes business owners can make is to not separate their personal and business goals.

It’s easy to get caught up in the idea that you don’t want to miss out on any of the perks of being a business owner, but it’s important to be realistic about what you can and can’t do with your money.

One way to separate your personal and business goals is by using different financial accounts for each. You can even set up separate savings accounts or credit cards if you want to keep things really separate. You can also just keep track of these things in a notebook or spreadsheet, but having them all in one place will make it easier on you when it comes time to pay bills or make other large purchases for both parts of your life.

One of the biggest mistakes business owners make is combining their personal and business finances. While it may be tempting to think that all of your money is “business” money, especially if you’re a solopreneur, the truth is that your personal and business finances are often very different.

While it’s true that you should keep an eye on both your personal and business savings accounts and investments, they don’t always need to be combined. Your business goals might not align with your personal goals—and vice versa!

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Build emergency fund

One of the best financial planning tips for business owners is to build an emergency fund. This means saving money in a separate account that you can access if you need to cover unexpected expenses, like car repairs or medical bills. Having this fund will help ensure that you don’t take on debt in order to cover these expenses, which can lead to problems later on down the line.

Business owners know that they need to keep a reserve of money in the bank to ensure their companies are stable and secure. But what if you have an emergency fund? The best way to create an emergency fund is to start small and build up over time. If you can’t save up all the money at once, don’t worry! Just try saving a little each month until you get enough.

Another tip is to try saving different amounts of money for different kinds of emergencies. For example, if your business is doing well, you might want to set aside a certain amount for tax season or other financial obligations that come around every year; then save another portion of your earnings for unexpected expenses like fixing broken equipment or covering employee absences.

Go Cashless

The number one financial planning tip for business owners is to go cashless.

It’s a simple idea, but it can make a huge difference to your bottom line. You might be thinking, “but what about tips?” Well, if you’re worried about that, you can set up an app to let people leave tips on their credit cards or PayPal—it’s easy! You won’t even have to worry about collecting the money yourself.

The other thing you can do is charge a fee if someone wants to use cash. Just make sure it’s not too much of a hassle for them—you don’t want them to stop tipping altogether because they don’t want to mess with paying in cash and then having your employees count it out for them later (and then dealing with the hassle of putting all that money away).

Cash is expensive, and it’s also risky. You can’t make change for $100 bills if you don’t have them on hand, and you can’t take credit card payments if you don’t have a working credit card machine. Cash is also inconvenient—you’ll need to get a bank deposit every day or two to keep track of your funds.

But what if there were a better way? What if there was an app that let you accept credit card payments from your customers and send them their reciepts immediately? And what if it also told you when your money was coming in so that you didn’t have to worry about running out of cash?

Hire an Accountant

If your company is just getting off the ground, you might not want to pay someone else, yet hiring an accountant is a wise investment. By reducing the stress of money management, working with an experienced professional can free you up to concentrate on expanding your business.


You may also want to think about what kind of money management service you’re going to offer. You can either stick with just keeping track of their finances and giving them general advice, or you could take a more active role and help clients manage their net worth. If clients are older and more experienced in managing their finances, for example, it might be easier for you to simply keep track of what they’re doing and let them do the rest. But if clients are younger and make impulsive spending decisions, for example, then maybe you should get more involved in how they make financial decisions.

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