Wealth Management Business Plan Template

Written by Dave Lavinsky

Wealth Management Business Plan

Wealth Management Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their wealth management companies. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a wealth management business plan step-by-step so you can create your plan today.

What Is a Business Plan?

A business plan provides a snapshot of your wealth management business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start a wealth management business or grow your existing wealth management company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your wealth management business to improve your chances of success. Your wealth management business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Wealth Management Businesses

With regard to funding, the main sources of funding for a wealth management business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for wealth management companies.

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If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Business Plan Template and complete your plan and financial model in hours.

How to Write a Business Plan for a Wealth Management Business

If you want to start a wealth management business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your wealth management business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of wealth management business you are running and the status. For example, are you a startup, do you have a wealth management business that you would like to grow, or are you operating a franchise of wealth management businesses?

Next, provide an overview of each of the subsequent sections of your plan.

  • Give a brief overview of the wealth management industry.
  • Discuss the type of wealth management business you are operating.
  • Detail your direct competitors. Give an overview of your target customers.
  • Provide a snapshot of your marketing strategy. Identify the key members of your team.
  • Offer an overview of your financial plan.

 

Company Overview

In your company overview, you will detail the type of wealth management business you are operating.

For example, you might specialize in one of the following types of wealth management businesses:

  1. Personal Financial Planning and Advice: As the most common form of wealth management, this type of advisory service includes an assessment of financial needs and decisions on investments.
  2. Asset Management and Allocation:This type of wealth management business assists with maximizing and protecting wealth over the long-term.
  3. Estate Planning: Wealth management advisory services include oversight of assets, investing for the future and protecting assets.
  4. Tax Accounting: A tax accounting wealth management advisor oversees all assets and tax preparation, filings, estimates and other tax-related business items.

In addition to explaining the type of wealth management business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

  • When and why did you start the business?
  • What milestones have you achieved to date? Milestones could include the number of clients, the total portfolio assets managed, reaching X number of wealth management referrals, etc.
  • Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Quickly and easily complete your Wealth Management business plan with Growthink’s Ultimate Business Plan Template and complete your plan and financial model in just hours.


Industry Analysis

In your industry or market analysis, you need to provide an overview of the wealth management industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the wealth management industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your wealth management business plan:

  • How big is the wealth management industry (in dollars)?
  • Is the market declining or increasing?
  • Who are the key competitors in the market?
  • Who are the key suppliers in the market?
  • What trends are affecting the industry?
  • What is the industry’s growth forecast over the next 5 – 10 years?
  • What is the relevant market size? That is, how big is the potential target market for your wealth management business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

 

Customer Analysis

The customer analysis section of your wealth management business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, families, corporations, foundations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of wealth management business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regard to demographics, include a discussion of the ages, locations, occupations and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other wealth management businesses.

Indirect competitors are other options that customers may use that aren’t directly competing with your service. This includes tax accountants, online wealth-building services, and stock brokers. You need to mention such competition, as well.

For each direct competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them, such as

  • What types of customers do they serve?
  • What type of wealth management business are they?
  • What is their pricing (premium, low, etc.)?
  • Do they offer any unique or special values for customers?
  • What are their weaknesses?

With regard to the last two questions, think about your answers from the customers’ perspective. And, don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

  • Will you provide options for family trust management?
  • Will you offer management services that your competition doesn’t?
  • Will you provide better customer service than those of your competitors?
  • Will you offer packaged services for corporations?

Think about ways you will outperform your competition and document them in this section of your plan.

 

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a wealth management business plan, your marketing strategy should include the following:

Product: In the product section, you should reiterate the type of wealth management company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide free initial consultations, guaranteed profits on certain assets, or yearly analysis at low to no cost?

Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the services you offer and their prices.

Place: Place refers to the site of your wealth management company. Document where your company is situated and mention how the site will impact your success. For example, is your wealth management business located in an upper socioeconomic location? Does your business offer amenities for special clients, such as season tickets to venues of their choice? Discuss how your site might be the ideal location for your customers.

Promotions: The final part of your wealth management marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

  • Advertise in wealth-building periodicals
  • Reach out to individuals via personal referrals
  • Offer introductory meetings to corporations
  • Engage in email marketing by blogging in a Q & A section
  • Improve the SEO (search engine optimization) on your website for targeted keywords

Finish Your Business Plan Today!

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Business Plan Template and complete your plan and financial model in hours.

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your wealth management business, including answering calls, setting appointments, planning and providing services, billing clients, managing and maintaining accounts, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth new client, or when you hope to reach $X in revenue. It could also be when you expect to expand your wealth management business to a new city.

 

Management Team

To demonstrate your wealth management business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing wealth management businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a wealth management business or successfully running a small brokerage firm.

 

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you book 5 wealth management clients per week and offer on-site monthly advisory services for corporations? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your wealth management business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a wealth management business:

  • Cost of advisory online access to investment information
  • Payroll or salaries paid to staff
  • Business insurance
  • Taxes
  • Other start-up expenses (if you’re a new business) like legal expenses, computer software, and equipment

 

Appendix

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of contracted clients you serve.

 

Summary

Writing a business plan for your wealth management business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the wealth management industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful wealth management business.

 

Wealth Management Business Plan FAQs

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your wealth management company business plan.

Starting a Wealth Management business is easy with these 14 steps:

  1. Choose the Name for Your Wealth Management Business
  2. Create Your Wealth Management Business Plan
  3. Choose the Legal Structure for Your Wealth Management Business
  4. Secure Startup Funding for Your Wealth Management Business (If Needed)
  5. Secure a Location for Your Business
  6. Register Your Wealth Management Business with the IRS
  7. Open a Business Bank Account
  8. Get a Business Credit Card
  9. Get the Required Business Licenses and Permits
  10. Get Business Insurance for Your Wealth Management Business
  11. Buy or Lease the Right Wealth Management Business Equipment
  12. Develop Your Wealth Management Business Marketing Materials
  13. Purchase and Setup the Software Needed to Run Your Wealth Management Business
  14. Open for Business

Click here to download the pdf version of our basic business plan template.

Our free business plan template pdf allows you to see the key sections to complete in your plan and the key questions that each must answer. The business plan pdf will definitely get you started in the right direction.

We do offer a premium version of our business plan template. Click here to learn more about it. The premium version includes numerous features allowing you to quickly and easily create a professional business plan. Its most touted feature is its financial projections template which allows you to simply enter your estimated sales and growth rates, and it automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements. Here’s the link to our Ultimate Business Plan Template.



Finish Your Wealth Management Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your Wealth Management business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Click here to finish your Wealth Management business plan today.

 

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.
 
Click here to see how Growthink’s business plan services can give you a winning business plan.

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