Author Topic: Any Financial Planners?  (Read 1217 times)

pstu24

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Any Financial Planners?
« on: June 19, 2017, 12:37:57 PM »
I know it's almost ironic to have financial planners on here to a certain extent ... BUT here's what's going on in my life:

I work in a full-time position with full-time benefits. That being said, it's related to the academic/education institution, so during breaks (including winter, spring, Thanksgiving, and even the full summer vacation) I work from home and can set my own hours so long as work is done. My real passion is investing, budgeting, and financial planning. Hence, why it makes sense that I found this community!

Now that I know enough *(I don't know too much, but I know enough to help others and I also know what I still don't know), I want to take the steps to open my own financial practice on the side.

My day job provides me with more than enough salary and benefits for my lifestyle and to pursue early retirement. But if I am going to pursue something I can build for the long haul, I hope to help create jobs, find something that even when I "retire" early, I can still manage a few hours a day (hopefully I'll pay an office manager to run most of it if I don't want to be too stressed on the day to day), and more than anything, I can help to teach others how to get their budgets under control, how to approach investing, and how to protect themselves and their families.

Here's where I need help ... I don't really know the first thing about formally opening a business, let alone one where I will no doubt need additional licenses (I have a few in the financial services industry already), I know I need E&O insurance, and I will need to file in case I ever take on employees? I don't know about all regulations, but I think I can run the business out of a home office, especially because I am starting small and don't "NEED" to hit X-amount of sales per month to survive. I still don't know if I would specialize in insurance, investments, budgeting, (or all?) ... I also don't know if I would design it all to be fee-based or more of a coaching approach?

So the biggest question is: Are there any resources that I should be looking into in order to prepare myself? I have been thinking about this for a while (probably about 3-4 years now that I am looking back). I believe this is the right path. I just want to understand what I am getting into before I pull the trigger and make the investment.

Where do I go from here if I hypothetically wanted to "open" a year from now? I think if I have a goal by next summer I could really spend some time really focused on getting the business just slightly off the ground (so it is hopefully paying for itself), but I also won't need to work 80 hours a week because I will be in the summer vacation phase of the year.

Any ideas? (Thanks in advance!!)

SC93

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Re: Any Financial Planners?
« Reply #1 on: June 19, 2017, 01:19:08 PM »
Dave Ramsey has classes for financial planners that teach you to do things the 'right' way. You should look in to it. As soon as I read your first words about not knowing too much but enough.... I could see you needed help. Not knowing too much but just enough is very dangerous in just about anything, especially money.

sirdoug007

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Re: Any Financial Planners?
« Reply #2 on: June 19, 2017, 03:47:16 PM »
I know it's almost ironic to have financial planners on here to a certain extent ... BUT here's what's going on in my life:

I work in a full-time position with full-time benefits. That being said, it's related to the academic/education institution, so during breaks (including winter, spring, Thanksgiving, and even the full summer vacation) I work from home and can set my own hours so long as work is done. My real passion is investing, budgeting, and financial planning. Hence, why it makes sense that I found this community!

Now that I know enough *(I don't know too much, but I know enough to help others and I also know what I still don't know), I want to take the steps to open my own financial practice on the side.

My day job provides me with more than enough salary and benefits for my lifestyle and to pursue early retirement. But if I am going to pursue something I can build for the long haul, I hope to help create jobs, find something that even when I "retire" early, I can still manage a few hours a day (hopefully I'll pay an office manager to run most of it if I don't want to be too stressed on the day to day), and more than anything, I can help to teach others how to get their budgets under control, how to approach investing, and how to protect themselves and their families.

Here's where I need help ... I don't really know the first thing about formally opening a business, let alone one where I will no doubt need additional licenses (I have a few in the financial services industry already), I know I need E&O insurance, and I will need to file in case I ever take on employees? I don't know about all regulations, but I think I can run the business out of a home office, especially because I am starting small and don't "NEED" to hit X-amount of sales per month to survive. I still don't know if I would specialize in insurance, investments, budgeting, (or all?) ... I also don't know if I would design it all to be fee-based or more of a coaching approach?

So the biggest question is: Are there any resources that I should be looking into in order to prepare myself? I have been thinking about this for a while (probably about 3-4 years now that I am looking back). I believe this is the right path. I just want to understand what I am getting into before I pull the trigger and make the investment.

Where do I go from here if I hypothetically wanted to "open" a year from now? I think if I have a goal by next summer I could really spend some time really focused on getting the business just slightly off the ground (so it is hopefully paying for itself), but I also won't need to work 80 hours a week because I will be in the summer vacation phase of the year.

Any ideas? (Thanks in advance!!)

I am also very interested in financial planning as a profession and have started working in that direction.

The first real step along this path is to start working on the Certified Financial Planning (CFP) education requirements.  These courses can be done remotely or at a local university (I am starting classes locally in August).

Michael Kitces has some great information about how to get started but the basics are start working on your CFP and get some experience under your belt.  Here are some of his posts on starting into this profession.  There is a wealth of info on his site and I encourage you to listen to his "Financial Planner Success" podcasts.  Amazing stuff there.  Good luck!

https://www.kitces.com/blog/mailbag-advice-for-a-career-changer-transitioning-into-financial-planning/

https://www.kitces.com/blog/10-Tips-For-New-Financial-Planners-To-Maximize-Career-Progression/

CareCPA

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Re: Any Financial Planners?
« Reply #3 on: June 19, 2017, 04:43:32 PM »
You should check with your state as to when you would cross the line to "investment adviser," and what the requirements are once you do.
Always happy to help with tax or accounting questions - feel free to private message me.

I am a licensed CPA in Pennsylvania. However, any tax advice I give should be considered general information and not used in the avoidance of tax. There is most likely information about your situation that I do not know, and thus you should do your own additional research.

Yes, in case it confuses you, I did change my forum name.

pstu24

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Re: Any Financial Planners?
« Reply #4 on: June 19, 2017, 06:28:53 PM »
Dave Ramsey has classes for financial planners that teach you to do things the 'right' way. You should look in to it. As soon as I read your first words about not knowing too much but enough.... I could see you needed help. Not knowing too much but just enough is very dangerous in just about anything, especially money.

What I meant by this was that I worked under a financial planner who was actually very successful for just under 4 years. He is in the twilight of his career, and I could go on for paragraphs about how good he is. His problem is 95% of his book of business is all people who are his age. He completely turns off others because while he has the success to show it and probably earns about 7-8 times the local MSA average income annually ... he also is one of those guys who "knows everything" and never needs to double check or try to find a newer or better way.

In a non-arrogant way ...  I have 3 Masters, 6 licenses and 2 more designations (cute set of letters) after my name ... so I meant to say I know "enough" ... but I also know I am still looking for ways to pull it all together and get better for both myself and my potential clients / family / friends.

Besides ... the enemy of progress is perfection :) ... too many people wait too long to learn too much because they are afraid they don't know enough to get started. I know I have enough to get started, but I just know I don't know enough to coast on my current education ... Hence why I said I have a lot of the pieces and a decent amount of experience. But to start a business from the ground up, I don't know where to begin!

pstu24

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Re: Any Financial Planners?
« Reply #5 on: June 19, 2017, 06:33:24 PM »
You should check with your state as to when you would cross the line to "investment adviser," and what the requirements are once you do.

Appreciate this! I will do. I always find it funny how investment or financial advice works... and how some people who are lifelong "coaches" are able to give advice without actually being licensed or backed by a company! But this is good. Thanks!

pstu24

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Re: Any Financial Planners?
« Reply #6 on: June 19, 2017, 06:37:19 PM »

I am also very interested in financial planning as a profession and have started working in that direction.

The first real step along this path is to start working on the Certified Financial Planning (CFP) education requirements.  These courses can be done remotely or at a local university (I am starting classes locally in August).

Michael Kitces has some great information about how to get started but the basics are start working on your CFP and get some experience under your belt.  Here are some of his posts on starting into this profession.  There is a wealth of info on his site and I encourage you to listen to his "Financial Planner Success" podcasts.  Amazing stuff there.  Good luck!

https://www.kitces.com/blog/mailbag-advice-for-a-career-changer-transitioning-into-financial-planning/

https://www.kitces.com/blog/10-Tips-For-New-Financial-Planners-To-Maximize-Career-Progression/

Thank you! I am actually good on the education component, and am "certified" to be able to operate in an adviser role. My biggest questions have to do with the fact that I have never done it before! I need to seek out company appointments if I want to represent them. I need to potentially have some sort of system to keep track of client data, sensitive info, portfolios and etc. which can cost money, I may even need to look into all of my own tax filing information, E&O insurance, what happens if I need to bring on an employee, do I need a license for myself as an individual AND for the business itself ... etc. These are all things that I need to be aware of and I'm not even down to the fun things like the writeoffs :-P

KMMK

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Re: Any Financial Planners?
« Reply #7 on: June 19, 2017, 08:10:08 PM »

I am also very interested in financial planning as a profession and have started working in that direction.

The first real step along this path is to start working on the Certified Financial Planning (CFP) education requirements.  These courses can be done remotely or at a local university (I am starting classes locally in August).

Michael Kitces has some great information about how to get started but the basics are start working on your CFP and get some experience under your belt.  Here are some of his posts on starting into this profession.  There is a wealth of info on his site and I encourage you to listen to his "Financial Planner Success" podcasts.  Amazing stuff there.  Good luck!

https://www.kitces.com/blog/mailbag-advice-for-a-career-changer-transitioning-into-financial-planning/

https://www.kitces.com/blog/10-Tips-For-New-Financial-Planners-To-Maximize-Career-Progression/

Thank you! I am actually good on the education component, and am "certified" to be able to operate in an adviser role. My biggest questions have to do with the fact that I have never done it before! I need to seek out company appointments if I want to represent them. I need to potentially have some sort of system to keep track of client data, sensitive info, portfolios and etc. which can cost money, I may even need to look into all of my own tax filing information, E&O insurance, what happens if I need to bring on an employee, do I need a license for myself as an individual AND for the business itself ... etc. These are all things that I need to be aware of and I'm not even down to the fun things like the writeoffs :-P

I'm a new financial planner in Canada. I've spent most of the last 8 months dealing with this type of thing.
I'm sure it's a bit different there, but from my experience there are generally three ways to get this type of info:

- find a company to work for
- join a planner association (In Canada I use Advocis.)
- get associated with a managing general agency (if that is a thing in the USA). It's an insurance wholesaler that provides support and contacts with the major insurance companies, but you aren't anyone's employee. Although it's mostly insurance I also got lots of resources about compliance documents and procedures, financial planning, sales, etc.

Of course mentors are also always good. And a lawyer/accountant re: the incorporation, tax planning kind of things.

This was definitely a really hard part of the business. At the beginning I did some things in the wrong order, and wasted some time. And other parts were just weird bureaucracy issues. For example, I couldn't get my insurance licenses without E&O; but couldn't get E&O without licenses. I also couldn't join the association until I had E&O and was practicing, but the association had tons of great resources that would be extremely useful to be able to practice. But the E&O company also wants you to actually be practicing.

Hope this is somewhat helpful.

SC93

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Re: Any Financial Planners?
« Reply #8 on: June 19, 2017, 09:59:56 PM »
I agree that too many people wait too long trying to learn more to be better and then before they know it, it's too late. Good luck! Check out Dave.

sirdoug007

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Re: Any Financial Planners?
« Reply #9 on: June 20, 2017, 09:04:00 AM »

I am also very interested in financial planning as a profession and have started working in that direction.

The first real step along this path is to start working on the Certified Financial Planning (CFP) education requirements.  These courses can be done remotely or at a local university (I am starting classes locally in August).

Michael Kitces has some great information about how to get started but the basics are start working on your CFP and get some experience under your belt.  Here are some of his posts on starting into this profession.  There is a wealth of info on his site and I encourage you to listen to his "Financial Planner Success" podcasts.  Amazing stuff there.  Good luck!

https://www.kitces.com/blog/mailbag-advice-for-a-career-changer-transitioning-into-financial-planning/

https://www.kitces.com/blog/10-Tips-For-New-Financial-Planners-To-Maximize-Career-Progression/

Thank you! I am actually good on the education component, and am "certified" to be able to operate in an adviser role. My biggest questions have to do with the fact that I have never done it before! I need to seek out company appointments if I want to represent them. I need to potentially have some sort of system to keep track of client data, sensitive info, portfolios and etc. which can cost money, I may even need to look into all of my own tax filing information, E&O insurance, what happens if I need to bring on an employee, do I need a license for myself as an individual AND for the business itself ... etc. These are all things that I need to be aware of and I'm not even down to the fun things like the writeoffs :-P

If it's more a matter of setting up the business and compliance with regulations, I have a different kitces.com link to share.

https://www.kitces.com/blog/setting-up-an-ria-and-starting-a-new-financial-planning-practice-on-less-than-10000/

It's really amazing how many companies are out there to help you start a financial planning business.

There is also a company called RIAinabox.com that does many of the compliance tasks you need to do.

pstu24

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Re: Any Financial Planners?
« Reply #10 on: June 21, 2017, 10:40:35 AM »
Awesome! Thanks so much for this.

I am aware of just how much "setup" this is going to take with respect to time, regulation, compliance, and etc... which is exactly why I am trying to write up an actual business plan and know the costs and steps long before I physically open my doors or pay money for anything.

KMMK

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Re: Any Financial Planners?
« Reply #11 on: June 21, 2017, 11:25:07 AM »
I forgot to mention in my original reply, that I really like this book: https://www.amazon.ca/Getting-Started-as-Financial-Planner/dp/1576603571
for the set-up stuff you are talking about. He also has a website, with resources I believe.

SwissMiss_

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Re: Any Financial Planners?
« Reply #12 on: July 08, 2017, 12:10:57 PM »
I realize this thread is a few weeks old, but I wanted to add that the XY Planning Radio podcast (and the XY Planning network community in general) has been an invaluable resource for me. The podcasts will help get your head in the game and realize what you need to be thinking about as you transition to financial planner and launch a new firm. Also like the Kitces articles linked above.

pstu24

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Re: Any Financial Planners?
« Reply #13 on: July 13, 2017, 09:18:54 AM »
Thanks so much! As I believe I have said, my goal is to go into my passion which is actually helping people. Hence, if I can build something up as a business over the next 5-10 years, it would hypothetically allow me to transition out of my current career at some point and still be able to spend time helping others while bringing in a LITTLE bit of income.

Even just this morning I received a notice from my current student loan provider talking about their new referral program. Honestly, I love them. They have fast customer service, everything was transparent and easy to use, AND their rates were the most competitive I found. Their rates apples to apples for me was just about 3% lower, compared to the nearly 6-8% student loan rate quotes I was receiving from other lenders. I believe they were only a soft credit hit as well, so it made it an easy 2-minute check for a quote. I won't post a link or referral code here, but would be happy to share with anyone - just PM me!

Here's why I bring this up though ... I know as you become an actual "planner" and offer financial plan advice, you have to have E&O insurance and you have to be covered. However, how does that work if I would just be doing budgeting? If I am just helping others to understand their options and get their budgets in check, everything from cutting cable to monitoring their spending at the bars, and even telling them to max out their 401k and IRA or refinancing current debt, at what point do you cross the line and become a 'planner' as compared to just being a helpful friend?

I would love to refer friends currently and make 100 bucks a piece on referring them to my current lender so I could pour the money right back into the loan and pay it off faster. PLUS I am helping them because they wouldn't go through with the refinance unless the rate was more favorable. However, I don't want to engage in activities considered planning if I am crossing over into an area where I need to get a business set up first ...