What It Takes to Run a Financial Practice

Whether you plan to open an independent financial planning practice or operate a practice within a larger firm, both require similar responsibilities.

What Is a Financial Planning Practice?

A financial planning practice describes the collection of people, resources, processes and economic activities that allow a financial planner to work with and help a group of clients. In a sense, a practice can be considered a service or business unit that contains all the resources necessary to productively engage with clients in their best interests.

Practices Can Differ Based on Company and Company Size

A practice can differ from company to company and can also vary based on firm size. In some companies, a practice will consist of a team of professionals, each with different specializations and experience levels. In another firm, a practice might be one professional working with clients in person or virtually.

As you advance in your financial planning career, your role in the financial practice will typically transition from a support role to positions where you have more independence and responsibility. Eventually, you may lead or even own your own practice.

It’s important to note that career advancement within the typical financial planning practice career track occurs at varying speeds. It is also highly dependent on an individual’s capacity, skill set, experience level and ability to attract a client base.

Running a Practice: 4 Main Responsibilities

Leading a financial planning practice is both a privilege and a responsibility. Here are the four main areas you will be responsible for:

• Retaining Clients: When running a practice, you must maintain strong relationships with a group of clients who are seeking advice and relying on a professional to make final recommendations, even if these clients are also taking input from others.
• Managing Resources: You must have enough clients to ensure the presence and sustainability of all the necessary resources the practice requires, from support staff to office space and technology. In other words, you must either be able to afford to directly hire staff and pay for resources yourself or have a budget within your firm to cover these expenses.
• Managing Ethics and Compliance: You will have the regulatory responsibility for all the recommendations made and must ensure all client work follows any applicable ethical and legal standards.
• Managing the Team: You will need to delegate, oversee, train and coordinate a team of financial planning professionals to ensure all client work is properly completed.