Wealth Management Practice Business Plan and SWOT Analysis

Wealth Management Practice Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Wealth Management Practice Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Wealth Management Practice business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

Your Business Planning Package will be immediately emailed to you after you make your purchase.

Product Specifications (please see images below):

  • Bank/Investor Ready
  • Complete Industry Research for the Industry
  • 3 Year Excel Financial Model
  • Business Plan (26 to 30 pages)
  • Marketing Plan (24 to 28 pages)
  • 425+ Page Funding Directory
  • PowerPoint Presentation
  • Loan Amortization and ROI Tools
  • Three SWOT Analysis Templates
  • How to Start a Business Guide
  • Easy to Use Instructions
  • All Documents Delivered in Word, Excel, and PowerPoint Format
  • Meets SBA Requirements

Wealth management practices have become prevalent within the United States given that many people do not have the time to properly manage a large portfolio of stocks, bonds, mutual funds, and other investment vehicles. Additionally, many wealth management practices are used so that individuals are able to properly plan to retire, save for their children’s educations, buying a home, and engaging related activities require a substantial amount of capital. It should be noted that many wealth management practices are often developed and are focused more towards people have a middle to upper middle income and an asset range of $100,000 all the way to about $750,000. The middle income and upper middle income market is very much underserved by financial advisory firms and investment firms throughout the United States.

As such, many wealth management practices launch their operations by targeting a broad base of individuals that have a moderate income as well as a moderate amount of wealth. This is one of the quickest ways that many wealth management practices can develop and expand their operations once they open their doors. One of the nice things is that most wealth management practices are somewhat immune from negative changes in the economy. However, this is dependent on how the fee structure of the wealth management practice operates. More and more financial planners and wealth managers are focusing on a fee-for-service protocol rather than taking a percentage of assets under management or receiving sales commissions. As this is a highly competitive industry, many financial planners and wealth advisors are using this fee-for-service model so that their interests are completely aligned with their clients.

The barriers to entry for a new wealth manager are considered to be moderate. There are usually a number of federal securities licenses that must be acquired as well as certain state securities licenses that must be obtained as well especially if the wealth management practice is going to be engaged in the sale of insurance. Many of these licenses do require a baseline of education as it relates to accounting, finance, tax laws, and related disciplines. Additionally, certain training must be provided by a third-party firm as it relates to ethics, proper protocols and procedures, and other issues that arise from owning and operating a wealth management practice. Most people who are entering this field is a financial planning practitioner typically have about five year because of experience before establishing their own business.

The startup costs are considered to be somewhat moderate given that most of these firms can be started for as little as $50,000 all the way up to about $100,000. One of the biggest and most important expenses that a wealth management practices going to have, especially on an ongoing basis, is the fact that they’re going to need to make continued investments into their marketing campaigns. Obtaining new clients for these practices is somewhat difficult, and as such – a well-developed marketing plan needs to be implemented in order to ensure that clients are obtained from the onset of operations. It can be expected that about 20% to up to 50% of the total startup costs are going to need to be allocated towards asset management fees. The ongoing operating expenses outside of marketing are considered to be moderately low depending on the location and the size of the office.

It should be noted that most financial institutions do not provide loans or startup financing for many wealth management practices. There are a myriad of laws and related regulations regarding providing capital to a financial services business. As such, many financial companies will only extend a working capital line of credit once a wealth management practice once it has been in business for two years worth the practitioner has a significant amount of collateral from something such as a primary residence. However, many individual investors are willing to provide the necessary money to start a new wealth management practice given the high gross margins generated from their services. As such, a wealth management practice business plan is typically required from a private funding source. This business plan should have a three-year profit and loss statement, cash analysis, balance sheet, breakeven analysis, and business ratios page. As it relates to the wealth management practice industry, there are approximately 250,000 people that are actively involved with in the industry and it generates about $60 billion revenue per year. This industry is expected to grow as well as consolidate over the next 20 years. One of the most important aspects of focus on within the business plan is the fact that many people from the Baby Boomer generation now require substantial financial advice as they enter their retirement years. Also, many people have just entered the workforce force are also in need of five proper financial planning as it relates to acquiring homes, saving for retirement, and engaging in large-scale purchases. One of the key things to note within the business plan as well is to complete a complete demographic analysis which should overview the size of the population, population density, median household income, median family income, median household value, as well as a host of other demographics that are targeted with two customers within the market. Some wealth management practices will engage a specific focus such as small business owners or medical professionals. This is one of the ways that many of these businesses can differentiate themselves within this highly competitive market.

A wealth management practice SWOT analysis should also be produced as well and is usually done in conjunction with the business plan, marketing plan, as well as any of the related start documentation. As it relates to strengths, most wealth management practices are able to generate a positive income even during times of economic recession. Although many people will sell assets during this time in order to have access to cash and not have their portfolios decline – many wealth management advisors are able to receive fees equal to a certain percentage of the assets managed. Additionally, certain financial products like annuities and life insurance policies provide the originator with a yearly fee for maintaining the policy on behalf of the company. These fees often provide a highly recurring revenue that allows these businesses to remain profitable and cash flow positive. The barriers to entry are considered to be moderately high in the startup costs are considered to be moderate as well.

For weaknesses, there are a number of financial advisors and wealth managers within the United States and as such a new business needs to find a specialized niche or way to differentiate themselves within the market. Additionally, there are a tremendous amount of rules and regulations that must be adhered to on an ongoing basis as it relates to managing someone’s assets. This, can cause a substantial cost increase for a new business given that they must spend a substantial amount of money on compliance, legal advice, as well as accounting advice.

For opportunities, once established these businesses can grow very aggressively by acquiring additional clients, hiring additional licensed wealth managers, and buying existing financial planning practices that have a substantial number of clients on hand already. Additionally, these businesses can integrate new financial products into their offerings.

For threats, this industry has continually undergone consolidation over the past two decades. This trend is expected to continue in perpetuity given that vertical integration of financial planning practices is highly profitable for the acquiring company. One of the other threats that needs to be dealt with on an ongoing basis is that rules and regulations frequently change as a relates operating in a fiduciary capacity for rendering investment advice. As such, proper legal counsel should be acquired in order to ensure that these businesses are remain within the letter of the law at all times.

A wealth management marketing plan is frequently developed and this is going to be one of the more important aspects of your overall business planning process. This is primarily due to the fact that given the strong amount of competition in this market, individual wealth managers and group practices must find ways to effectively brand themselves within their individual markets. Most importantly, the financial planning practice or wealth management practice should have an expansive proprietary website that provides customers with the ability to log into their accounts to see applicable information. This website should discuss all financial products offered by the business, whether or not the wealth management practices of fiduciary, preliminary pricing information, information about the staff wealth managers, contact information, any of the other piece of pertinent information. One of the ways of these platforms often grow substantially is to the use of continually providing articles and insights as to the financial markets. This allows individuals to use the website not only as a method of getting financial advice but also reading insightful commentary about what they can expect in the years to come. The wealth management practices website should be listed among all major search engines.

Although it is not typically needed, most wealth management practices to maintain a presence on social media platforms such as FaceBook, Google+, and Twitter. However, the return on investment – either via time or money – is usually low for social media platform. The targeted demographics of most wealth management firms do not include people that frequently use social media. As such, it is important that while a minor presence or maintain a page on social media is done, is not imperative and does not usually provide a huge influx of new clients on an ongoing basis.

One of the key ways that many wealth management practices develop their operations is by hosting seminars and events within their target market. Additionally, many wealth managers will develop ongoing referral relationships with certified public accountants, enrolled agents, bookkeepers that are frequently used by small business owners, and related professionals that can provide referrals. Many wealth managers will also have a number of attorney referrals in place as well. This, during the early years of operation, can be one of the lifeblood ways that individual wealth management practices develop their operations.

Given the complexities of modern finance, most wealth management practices are in strong demand among busy professionals such as doctors, lawyers, dentists, business owners, and related individuals. The demand for quality investment advice and proper wealth management are not expected to wane in the future at all. Provided that the owner is able to keep an eye on all rules and regulations regarding investment advisory firms and wealth manager practices, these businesses can be highly lucrative for their owners. They also have a substantial valuation when they are sold to a third party.