Starting Out as a Financial Advisor: An Insider’s Guide for Beginners

The financial advisory industry faces a significant demographic shift, with the average age of advisors in the U.S. at 56 and about 20% set to retire in the coming years. This suggests plenty of changeover toward younger talent over the next decade, which also means that younger advisors will have a greater chance than previous generations to shape the industry. But first, they need to get their footing in a challenging and competitive career that often throws unexpected obstacles their way.

To help aspiring and early-career financial advisors navigate their early careers, we sought the insights and advice of experienced professionals. In addition to the six main tips outlined in this article, weve included standout bonus tips throughout the piece. From emphasizing the importance of lifelong learning to finding a niche and honing communication skills, these advisors share the lessons they wish they had known when starting.

Beginning a career as a financial advisor can be an exciting yet daunting endeavor. As a novice just starting out it’s crucial to have realistic expectations and equip yourself with the right knowledge and skills to set yourself up for success.

After coaching and working with thousands of financial advisors over my career, I’ve learned there are several key things new advisors should know when first getting into the industry. Consider this your insider’s guide to navigating the first years as a financial advisor and avoiding common beginner mistakes.

Define Your Niche and Ideal Client

One of the biggest mistakes rookie advisors make is trying to be everything to everyone right out of the gate. However, no one can effectively serve every type of client The most successful financial advisors focus on a particular niche or ideal client profile

Narrowing down who you want to serve allows you to really understand that clientele and what they need. It also helps you craft marketing messages and choose services that resonate with your targets.

For example, an advisor who specializes in physicians has a very different ideal client than one who focuses on retirees. The niche you choose depends on your interests, knowledge, skills, and business goals.

Some top niches for new financial advisors include:

  • Young professionals
  • Families
  • Small business owners
  • Executives
  • Tech employees
  • Medical professionals
  • Attorneys
  • Retirees

In addition to occupational niches, you may focus on a specific service like financial planning or portfolio management. Defining an ideal client helps you hone your expertise to provide real value.

Develop a Business Plan

Having a strategic business plan in place from the start helps guide your activities and measure progress. Surveys show only about 17% of advisors have a formal business plan, while top producers almost always do.

Your financial advisor business plan doesn’t need to be hundreds of pages like some complex corporate plan. It should outline:

  • Your target niche and ideal client profile
  • Services and products you’ll offer
  • Marketing and client acquisition strategies
  • Operations like staffing, tools and office space
  • Revenue and new client goals
  • Budgets and key milestones

A good business plan helps you pursue activities purposefully instead of getting distracted by sales fads or ineffective tactics. Review and revise it regularly as your business evolves.

Create a Marketing Strategy

They say that if you fail to plan, you plan to fail. This is especially true when it comes to financial advisor marketing.

Far too many rookie advisors think they can build a book of business through referrals or by “picking up the phone to dial” alone. While referrals are great, they’re difficult to rely on initially. Cold calling also has limits and lower success rates today.

That’s why having an intentional marketing plan is critical. Your strategy should likely include a mix of:

  • Content marketing through a blog, videos, podcasts etc.
  • Social media presence
  • Email marketing and newsletters
  • Direct mail
  • Public speaking and seminars
  • Referral programs
  • Advertising

I recommend new advisors focus heavily on digital marketing tactics like social media, email and content. Track results closely so you can double down on what works. Be prepared to test and tweak your plan frequently at first.

Learn How Clients Search for Advisors

One marketing mistake beginners make is using blanket tactics without considering how their niche actually searches for financial advisors.

For example, surveys show retirees still rely heavily on referrals and in-person events to find advisors. Meanwhile, young professionals predominantly search online and use social media in their selection process.

That means acquisition strategies should align with your clientele. A new advisor targeting young families needs a stellar website and social media presence. Someone focused on retirees may get more mileage from networking events and seminars.

Understanding your niche’s behavior ensures you meet them where they are and use the right channels. Don’t try to be everywhere at once.

Invest in the Right Technology

It’s critical for new financial advisors to implement the right technology early on to work efficiently and scale their practice. Here are some must-have tech tools to invest in:

CRM Software: A CRM centralizes client data and tracks your interactions and tasks. It’s much more robust than a typical contact manager. Popular options include Salesforce, Redtail, Wealthbox CRM and SmartOffice.

Financial Planning Software: Programs like eMoney Advisor, MoneyGuidePro or RightCapital allow you to efficiently build financial plans digitally. This saves huge amounts of time versus manual planning.

Portfolio Management Software: Solutions like Orion Advisor Services, BlackDiamond and Advyzon help you organize investment accounts, track performance, rebalance portfolios and make trades.

Email Marketing Platform: Email is a top strategy for acquiring clients and staying in touch. A service like MailChimp, Constant Contact or ConvertKit helps you create and send professional emails at scale.

Presentation Software: Using visuals to explain concepts and ideas is hugely helpful when advising clients. Create polished presentations quickly through programs like Visme, Canva and Prezi.

Virtual Meeting Software: As an advisor, you’ll spend lots of time in virtual client meetings. Choose a platform like Zoom, Skype, GoToMeeting or Google Meet.

Investing in productivity technology early on saves massive time and helps you deliver much more value to clients.

Stay Organized and Follow Processes

When just starting out as a financial advisor, it’s easy to feel scattered and overwhelmed by all the hats you have to wear. That’s why having rock-solid organization and processes in place is key.

Block out time on your calendar for different types of work like prospecting, client meetings, continuing education and administrative tasks. Use your CRM to create workflows and standard follow-up processes for common scenarios.

Document your core client onboarding and financial planning processes so you handle each new case consistently. Little organizational habits like keeping a daily to-do list helps you prioritize and not drop any balls.

Over time these processes will become second nature. But putting them in place immediately as a beginner prevents you from getting buried.

Track Your Key Performance Metrics

Unlike some careers, financial advising is essentially running your own business. That means you need to embrace a business mindset and track key performance indicators (KPIs) to gauge your progress and profitability.

Some important metrics for new financial advisors include:

  • Number of client appointments booked
  • Appointment show rate
  • Appointment-to-client conversion rate
  • Average revenue per new client
  • Total new clients onboarded
  • Assets under management
  • Monthly recurring revenue
  • Marketing costs and ROI

By monitoring your KPIs in a spreadsheet or through reporting software, you’ll gain insights on what’s working well. You can also quickly identify problems and course correct when needed.

Invest in Yourself First

When just starting out, it’s tempting to cut corners and save money wherever possible. But I always advise new financial advisors: invest in yourself first before anything else.

Things like professional development, courses, coaching programs and tools that make you more knowledgeable and productive provide a very high ROI. Whereas trying to skimp on those early on to save pennies could really limit your success down the road.

Beyond business investments, take care of your health and wellbeing too. Don’t overwork yourself to the bone chasing every dollar initially. Lay a sustainable foundation for the long-term by taking care of your mind and body.

Find a Mentor and Community

Launching a new financial advisor career can feel lonely and intimidating. That’s why connecting with a mentor and community provides much-needed support and guidance.

A mentor is someone further along than you who can provide insights and advice along the way. They may be within your company or an independent advisor you admire.

Formal mentorship programs like the FPA’s Residency program are great for new advisors. You may also join informal mastermind groups or communities through places like LinkedIn and Facebook.

Surrounding yourself with more experienced advisors gives you a tribe to learn from and prevents you from reinventing the wheel.

Develop Advisor “Soft Skills”

Hard skills like financial knowledge and technical expertise are crucial. But developing your “soft skills” as a financial advisor is equally important when starting out.

These include abilities like:

  • Communication: Active listening, explaining concepts simply, interviewing skills.
  • Emotional intelligence: Reading body language, building quick rapport, empathy.
  • Sales skills: Asking good questions, handling objections, closing confidently.
  • Time management: Prioritizing, scheduling, productivity strategies.
  • Problem solving: Evaluating issues, critical thinking, decision making.
  • Resilience: Handling rejection, persevering through obstacles.

Soft skills allow you to better connect with clients and help them effectively. Many can be improved through practice, coaching and experience over time.

Don’t Try to Go It Alone

One final piece of advice I stress to new financial advisors is this: don’t try

starting out as a financial advisor

Tip 2: Keep Studying

Its likely the last thing youll want to read if youve recently finished exams or coursework. Nevertheless, more work now could boost your career in the long term. Gibson stressed the value of obtaining advanced qualifications early. “Get chartered and certified level qualifications ASAP,” he said. “It demonstrates to clients the highest level of technical competence and will be what employers are looking for.”

Doing it while youre young is challenging enough, especially if youre working full-time, but itll be more difficult to pick back up with studying later on. As Gibson points out, “Its tempting to sit back once youve achieved a certain level. But once youre in the studying for exams zone, just keep going and get the qualification—its much harder to get back into the exam mindset after a prolonged break from study.”

However, even after you get your credentials and exams out of the way, youll still need to make a habit of learning. It wont just be for the next credential. Ashley Folkes, a financial advisor in Hoover, Alabama, said a commitment to lifelong learning is a nonnegotiable part of the trade.

“In a constantly evolving industry, staying up-to-date on the latest trends, regulations, and best practices is essential,” Folkes said. “Your clients deserve an advisor who is up-to-date on the latest trends in investments and planning, especially given the ever-changing landscape of taxes and regulations.”

Young advisors should always be reading books and articles, taking online training courses, volunteering with professional organizations, and securing new educational credentials to continue enhancing their value to both clients and employers.

However, youre not expected to know it all out of the gate. Yes, youre going to feel out of your depth at times, Schmehil said. “Youre supposed to be nervous and stressed when starting out. You lack knowledge and thus confidence.” But, he added, “The nerves also show you care.”

Schmehil suggested “getting reps,” as you would at the gym, to strengthen your muscles. For an advisor, thats working with prospects and clients. “Learn as much as you can every day, and eventually, youll have the knowledge and confidence to make a difference in a lot of peoples lives. Thats when it gets fun,” he said.

Tip 4: Find a Niche

Folkes told us he wished hed received this advice earlier in her career. “Identify a niche early in your career and become known for it.”

“Some of the most successful advisors specialize in specific strategies or planning techniques,” Folkes added. “Prospecting can be challenging, but being recognized as the best in a particular area will attract prospects to you.”

By developing expertise in a particular area, advisors can attract clients seeking specialized knowledge and tailored products.

Nash said your niche could be something that already sets you apart. “It could be that, as a young advisor, you have a greater understanding of influencer finances and sponsorship deals, and you can make this your niche,” he said.

David Flores Wilson, a certified financial planner at Sincerus Advisory in New York City, said a niche can be good, but he pointed to potential drawbacks: “A niche can backfire if you don’t have sustained passion for it down the line. Moreover, your niche could be less favorable during certain times. For example, focusing on pre-IPO tech startup executives was very lucrative a few years ago, but is likely less profitable in the current market.”

Financial Advisor CAREER 2023

How do I become a financial advisor?

Use these tips when starting out as a financial advisor: 1. Be confident It can help to be confident about your abilities with your early clients. Though you might still experience new client needs and situations, consider addressing each confidently to build trust with your candidates.

What makes a good financial advisor?

One crucial aspect of being a financial planner is the ability to break down complex financial jargon and explain it to clients in a way they understand. In my experience, financial advisors should ideally have: An ability to build and maintain strong client relationships. A keen ear to actively listen to a client’s financial worries and goals.

Should you start your own financial advisor firm?

You might want to start your own firm. “Financial advisors who begin their career working for a large institution spend most of their time gathering assets for the company, rather than advising their clients,” says Jason Wenk, CEO and founder of Altruist and a practicing financial advisor.

What advice do financial advisors give if they’re just starting out?

“My advice to financial advisors just starting out is to leverage centers of influence such as accountants, attorneys, HR directors, business roundtables, as well as using social media ,” declares Donald Reichert, exit planning specialist and founder of The Reichert Company.

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