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By Lauren Keeports Outreach

What You Need to Know About Compliance When Starting a New Financial Planning Business

8 minute read

What You Need to Know about Compliance When Starting a New Financial Planning BusinessToday’s guest post is written by Arlene Moss, founder of Kimberlite Coaching. Through a blend of encouragement, accountability and systematic improvements, she helps financial advisors turn their entrepreneurial passions into thriving businesses. Contact Arlene to learn more, or follow her thought leadership on twitter @ArleneDMoss.


What You Need to Know About Compliance as a Financial Advisor

The idea of compliance can be intimidating for financial advisors. Whether you’re transitioning, just starting up, or bringing on new clients, or dealing with a level of uncertainty, there’s a level of uncertainty there. What if the cost is higher than you’d anticipated? What if you make a mistake, have to restart the process, and resubmit all over again? What about when – not if – you get audited. Are you prepared?

The fear that you’re feeling is valid – this is a big step to creating your ideal practice. It’s totally natural that you’d feel nervous or unsure of yourself. But I’m here to make sure that you have the knowledge and tools to successfully register and fulfill your compliance obligations – all with minimal stress. Sound good?

Your first step is picking a compliance consultant or service.

There’s absolutely no reason you need to be facing these fears of yours alone. Although it might feel like it, you’re not on an island. I rarely recommend that you do all your compliance work yourself. There are so many businesses out there that exist solely to help you! You can decide to go with an individual consultant or a service company, and both options have their benefits. Regardless of who you end up going with, you should be looking for a compliance and registration expert who:

  • Understands your pricing structure. Your business model may not exactly match their expectations. Don’t try to be the square peg in their round hole. Instead, find the consultant who gets you and your pricing structure exactly as-is.
  • Has expertise in your state. This is so important. Finding a consultant or service that has a background or expertise in your specific state will ensure that you’re getting the most tailored consulting experience.
  • Meets your personal needs for timeline, willingness to communicate, etc.

Getting references is a good place to start. Ask around in your network and communities to see who everyone is using. However, be aware that personality and your own expectations have a lot to do with who you’ll end up deciding to work with. I have gotten both rave reviews and rotten tomatoes about consultants and I think it has to do with what the person wants and expects. They may be a rock star consultant, but that doesn’t mean they’re your rock star consultant.

Speaking of expectations, make sure you manage yours.

All that being said, if you’re looking for a consultant or service who will help you with compliance and registration in the next 24 hours so you can get your practice up and running…it might be time to reevaluate your expectations. The urgency financial planners feel to get this process over and done with as quickly as possible is understandable, but the process takes time and you may not be their only client who is going through these steps right now.

To make sure you’re on the same page as a new consultant, it’s good to set a few expectations in advance. Some questions you might ask are:

  • What’s the anticipated time frame from starting my ADV to submission to state?
  • Where do I fit in your queue?
  • When should I expect to hear from you next?
  • What is your best guess on how long my state will take to review my ADV? (knowing it is completely out of your, and your consultant’s, control)

All of these are good starting points to give you a better idea of what to expect. Once you know more about a timeline and the best ways to follow up, you’ll be able to anticipate your consultant’s responsiveness to your questions and replies to requests for information.

Needing a few references? Here you go!

If you’re ready to start your consultant search, here are a handful of consultants and services I regularly recommend to my clients:

Finally, relax a little.

I know. You feel like it’s impossible to relax with so many important things going on in the registration and compliance process. You feel like state regulators are every bit as hardcore as the IRS and will come find you wherever you are should there be an error in your registration or compliance, but this is not the case.

Everyone, from the state regulators to the consultant or service you’re working with is here to help you succeed. There’s no reason to be terrified of a potential screw-up with such a varied group of teammates whose only job is to get you registered, compliant, and practicing.

Still overwhelmed?

Let’s talk. I’m here to help you jump the hurdles that you’re facing, and helping you through the registration and compliance process definitely falls under the “hurdle” umbrella. Send me an email or schedule a consultation today, and remember that you are not alone!

This article was originally published on Kimberlite Coaching. Follow this link to see the full article.

Also, be sure to check out 6 Steps to Start Your Own Financial Planning Business for more guidance for starting your firm.


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