How to Start a Financial Advisor Business

Starting a financial advisory business allows you to leverage your expertise to help clients achieve their financial goals while building a profitable career. If you’re a newly certified financial advisor, you may choose to launch your own firm instead of joining an existing one. Alternatively, if you’re already established in the industry, you might feel ready to leave your current firm and operate independently as a breakaway advisor. Knowing which steps to take to start a financial advisory business can help you lay the foundation for long-term success.

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How Hard Is It to Start as a Financial Advisor?

Getting started as a financial advisor requires an investment of time and money, as you’ll need to tackle the legalities, fund your initial operating budget and find your first clients. A typical timeline to launch an RIA is four to six months, according to LPL Financial. ¹ In terms of the cost to go independent as an advisor, a realistic startup budget for an RIA is around $25,000, though you could spend more or less, depending on what your business model requires.

A cohesive RIA startup checklist includes strategies to:

• Secure premises for your business
• Establish your service offerings
• Attract prospects and acquire new clients
• Create a cohesive brand that highlights your firm’s mission, values and unique value proposition
• Develop a marketing strategy that leads to conversions
• Obtain startup financing, if necessary
• Maintain accurate records and manage the books
• Build a network and cultivate centers of influence
• Balance expenses against revenues to maintain positive cash flow
• Grow your team, either through in-house hiring or outsourcing
• Secure an RIA custodian
• Build your tech stack
• Meet regulatory and compliance requirements

Despite the challenges, the number of advisors seeking independence continues to expand. The independent registered investment advisor channel reported a five-year compound annual growth rate (CAGR) of 11.4%, according to an April 2026 report from Cerulli Associates. ² Approximately 16,544 registered investment advisors were operating in the U.S. at the end of 2025, according to the Investment Advisor Association (IAA) Industry Snapshot. ³

As a new financial advisor, the initial 12 months you’re in business may be the most difficult. Setting some first-year financial advisor goals can make it easier to define the direction you want your new business to take. For example, you may set a goal to acquire a specific number of clients per month or reach a certain AUM threshold. The most effective goals are specific, actionable, time-bound and measurable.

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How to Start a Financial Advisor Business

Starting a financial advisor business begins with clarifying your business model and target market. For example, will you operate as a fee-only, commission-based or hybrid advisor? This early clarity helps guide decisions around licensing, services and pricing. Here are the key steps required to get an advisory business off the ground.

Step 1: Create a Business Plan

A financial advisor business plan outlines how you will run your business, your goals and expectations. A good business plan describes the services you plan to offer, includes details about how the business will operate, outlines your marketing plan, analyzes your competition and includes financial projections.

Writing a business plan is an opportunity to define your business’s mission and who you want to serve. Before you proceed with the planning process, make sure to identify your target audience.

Do financial advisors need a niche? Technically, no. There are some benefits, though, to niching down. When you target clients from a specific group or financial background, you can better differentiate yourself from other businesses.

Step 2: Name the Business

Picking a name for your new financial advisor business may seem small, but it’s important for many reasons. The name you choose can impact how clients perceive your business. It can also help you stand out in a competitive market.

First, your business name should be representative of the brand image that you’re hoping to cultivate. Having a strong brand can make your business easier to remember and stand out from other competitors.

Your business name also matters for marketing. If you plan to set up a website, blog or social media account, it’s important to make sure that you’ll be able to secure domain names or usernames that match your business name. You’ll also need to verify that your business name is not already registered in your state and that there are no trademarks or copyrights in place that could bar you from using it.

Step 3: Legally Form the Business

Once you have a name, you’ll need to decide how to structure your new advisory business. There are several options to choose from, including:

Each one has advantages and disadvantages. For example, a sole proprietorship is the easiest business entity to set up, but it offers the least liability protection if you’re sued. If you’re unsure which structure might be best, talking to an accountant or other tax professional may be helpful.

After you’ve decided on a structure, you can take the next steps to register the business as a legal entity. What you’ll need to do can depend on where you’re opening your advisory firm, as each state has different rules. To get a federal tax identification number, apply with the IRS. Considering what type of business insurance you might need at this stage is a good idea. You can also open a business checking account and a business credit card once you’ve registered your new company.

Step 4: Obtain Professional Licenses/Designations

A professional designation is not a requirement to start a financial advisor business, but it could help you establish credibility with prospective clients. Pursuing professional certifications, like the Certified Financial Planner® (CFP®) or chartered financial consultant (ChFC) designations, can signal to prospects that you have the knowledge and expertise required to help them reach their financial goals.

Professional certifications can also help you expand the services that your business offers. For example, an accredited estate planner (AEP) can improve a financial planning firm’s estate planning services and bring in more clients. You may also consider obtaining an insurance license if you’d like to sell life insurance to clients.

Securities licenses are required if you’d like to sell investment products, offer financial advice for a fee or a combination of the two. Obtaining a securities license typically starts with passing the Securities Industry Essentials (SIE) exam, which is a prerequisite for some licenses. Here’s an overview of other licenses you may consider.

Step 5: Register With Regulators

Investment advisors have the option to register with the SEC or state regulators. The one you choose depends largely on your firm’s assets under management. Here’s a quick guide to which regulator you’ll register with based on AUM.

What if you’re starting an RIA without any assets under management? In that case, you’d register with your state’s regulators using FINRA’s IARD system to submit your Form ADV.

Step 6: Market Your Business

Marketing is crucial for businesses to reach potential clients by informing them about your identity, services and location. Some of the ways that you might choose to market your business include:

• Setting up a website or blog
• Creating profiles on social media channels that your ideal clients frequent
• Establishing an email list

Initially, it may take a certain amount of time to gain traction with social media or a website. If you have the budget to outsource those marketing tasks to an expert, it may be worth the money to do so if it allows you to see faster results.

You can also focus on networking and building relationships with other financial advisors. Each new connection you make with centers of influence could be an opportunity to gain more referrals.

Step 7: Create a Client Acquisition Strategy

A financial advisor business needs clients to be successful. Client acquisition should be one of your top priorities once you’ve worked through some of the early operational details of launching your firm.

To create a client acquisition strategy, start by identifying your target audience and understanding the value you can provide to them. If you know that, then it becomes easier to formulate a plan for attracting the clients that you want to work with. Some of the ways you might do that include:

• Cold-calling or cold-emailing
• Participating in community events that prospective clients are likely to attend
• Asking for referrals
• Engaging with prospects on social media

You can also use a digital tool to make this step easier. With SmartAsset AMP, for instance, you can get leads in your email and decide which ones you’d like to pursue.

Robert Gilliland, Managing Director and Senior Wealth Advisor at Concenture Wealth Management, explains how he’s integrated SmartAsset AMP into his firm:

“It makes it so much easier, because a lot of that process ends up being automated, and being able to automate that takes a lot off of my plate. Our process is, we get the lead. Fifteen minutes after we get the lead, a text goes out. Two hours later, an email goes out. It just kind of kicks off the process. And then I, and people on my team, can start calling.”

As Gilliland mentions, it can be a simple and effective way to connect with prospects and potentially save time.

Here’s one more tip. If you don’t have an elevator pitch yet, then you may want to work on creating one. An elevator pitch is meant to offer prospects a short but sweet introduction to your business.

Step 8: Monitor Your Progress

As mentioned, setting some financial advisor goals for your first year can help you define the targets that you want to aim for. Tracking your progress regularly can make it easier to adjust your plan so that you’re more likely to reach your goals.

For instance, if one of your goals is to acquire 50 new clients your first year, you might schedule a weekly or monthly check-in to see how well you’re doing. Or you might plan a quarterly budget review to look at how much income you’ve generated versus what you’ve spent to decide which investments are working and which ones aren’t.

Step 9: Focus on Scaling Your Business

Once your firm is up and running, you can start focusing on ways to grow your business. Ultimately, adding new clients and more assets under management are how financial advisors scale their businesses. Of course, this growth shouldn’t come at the expense of the services you provide to existing clients, so balance is key.

Consider investing in your lead generation systems and adding more advisors to your staff. You may outsource services to a paraplanner or a third-party company if you don’t want to hire in-house. Review your tech stack to see where you may need to fill in the gaps or upgrade hardware and software. Make business development a regular part of your routine and continue expanding your advisor knowledge by reading books, listening to podcasts and investing in training programs.

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Bottom Line

Starting a financial advisor business requires more than financial expertise, it demands thoughtful planning, regulatory preparation and a clear strategy for serving clients. By defining a business model, building the right infrastructure and planning for both compliance and cash flow, advisors can set themselves up for long-term success. With the right foundation in place, launching an advisory firm can be a rewarding path to independence and growth.

Tips for Growing Your Financial Advisory Business

• Make it easier for clients to find you. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• Expand your radius. SmartAsset’s survey shows that many advisors expect to continue meeting with clients remotely, which is a trend that’s grown in recent years. Consider broadening your search and working with investors who are more comfortable with holding virtual meetings or spacing out in-person meetings.

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