How To Start an RIA with a Financial Planning Focus and Low Start-Up Costs

Securing enough start-up capital is one of the most crucial aspects to starting a business, let alone a great one, because as the old saying goes, “You’ve got to spend money to make money.”

This concept is definitely not lost upon financial advisors looking to start their own firms. Some ventures are killed at the early planning stage though because many times the numbers just don’t add up enough to take the risk.

But what if going out on your own didn’t require such a huge start-up investment? Could more seasoned professionals make the leap to start their own firms without sacrificing the quality?

About a year ago, I read an article about a young financial advisor named Sophia Bera who made the leap to start her own firm (Gen Y Planning), and did so on less than $10,000. She didn’t take any shortcuts in the process – instead, through intelligent design and by leveraging modern technology, she achieved efficiencies in her business model and preserved (or enhanced) the quality of financial advice. 

Encouraged by her success story, I began to research in detail what I would need to do to start my own Registered Investment Adviser firm in a similar fashion.

And in May of 2014, I left my job and began the start-up process of my own practice. In the four months that followed, I made key decisions on how to operate my firm and what services I would provide clients. When all was said and done, my start up expenses totaled approximately $7,000. My monthly expenses totaled $2,000 in 2014 (about four months worth), but will run at about $6,000 in 2015 (plus some additional marketing and conference costs). My firm, Panoramic Financial Advice, is another example that it can be done.  I wouldn’t be where I am today had Sophia not been so generous to share her story, and so in my effort to “pay it forward” I would like to share with you how I created my dream firm.

One quick caveat before we get started. Creating your own firm is a huge endeavor and does not happen over night.  You must be prepared for disappointment, because every entrepreneur experiences it.  It’s how you learn. Is handling the excitement and stresses of a business something that is in your DNA? If so, then by all means, consider making the move to an exciting new way of life!


Intelligently dream up the fun stuff


We encourage our clients all the time to dream big and to pursue a life they feel is worthy of the calling. That means not staying at the job you hate. And helping your kids attend the right college. And that retirement isn’t something only for the super wealthy. So when it comes to our careers, are we taking our own advice?

If starting your own firm is something you seriously want to do, start by dreaming. Why do you want to go out on your own?  What is going to make your firm different from all the others? Why should someone pay to work with you? How are you going to operate your firm in a way that will energize you? What services are you going to offer, who is going to be responsible for all the work, and what fees you are going to charge?

These are some of the questions you will need to ask, and ones that I asked myself nearly a year ago.  It takes some time, but once you have answers, you will begin to see your dream firm start to take shape before your very eyes. But don’t forget to “intelligently” dream, because your services are going to have to appeal to a market in order for you to succeed. It’s also very important to go through this process because when you register your RIA you will need to know the answers to a lot of these questions.

For me, I wanted my firm to allow me the flexibility to spend time with my family at odd hours of the day when special life events happened. I wanted to meet with clients where they preferred. I wanted to provide both comprehensive financial planning and portfolio management services at a high quality level. I wanted to focus on a niche that I had experience with and enjoyed serving. I also wanted clients to understand what they were getting when they paid me. Lastly, I wanted my firm to be viewed as a leader and pioneer in the financial community.

So, to satisfy those aspirations, I first decided to operate from a home office, and meet all my clients out and about, either at their office, their home, a quiet local restaurant or coffee shop, a rented conference room, or using online video chat. My clients find this really convenient, and it allows me to pass on the savings for not having to lease an office space (read why Starbucks is the only office you need). I also get to see my wife and daughter a lot more frequently. As my firm grows and I hire more advisors, I will likely need to get an office but will try to maintain the same model for meeting clients.

After much research, I also decided that the overall value proposition of using a third party manager for portfolio management was much better than doing portfolio management myself. Clients deserve a team of analysts (not financial planners) managing their money, and as a start-up not operating in a big city, hiring and paying for a team of analysts wasn’t feasible. But I could still provide great value by finding one of the best third party managers in the U.S. for my clients, and manage that relationship for them. I chose Frontier Asset Management. Their portfolio management process is very impressive, as is their track record. As it turns out, my fee combined with theirs ended up being at the low end of the spectrum when compared to the other firms in my town. Offering my clients a stronger portfolio management team for a lower price was a win-win in my eyes.

I also refer clients who are new to saving to the robo-advising platform Betterment. If you aren’t familiar with robo-advisors, they are a great tool for new investors.  They create diversified portfolios for very low fees, and provide great accessibility and ease of use. I expect to see an explosion in low-cost online portfolio management platforms over the next decade, which will cause a bit of disruption in our industry.  But it will only intensify the need for true financial advice, as consumers will still have plenty of questions about which robo-advisor to use, how risky their portfolio should be, and what to do when the market goes up or down. Advisors should embrace this change and use it to their advantage.

Leveraging these portfolio management services has allowed me to focus the majority of my efforts and time creating and perfecting a financial planning process that adds tremendous value to my clients and lets them feel like they are excelling in every area of their financial lives (read “Creating a more interactive planning experience"). I try to constantly evaluate and improve what I call the “client experience” so that Panoramic’s clients get excited every time they meet with their advisor and hopefully rave about that experience to their friends and colleagues. It’s why I came up with the name “Panoramic” because it resonates with the comprehensive advice and service I provide.

As a start-up, it is very difficult to limit yourself to working with a very specific clientele, because as most senior advisors will tell you, you should take any business you can get (because it’s hard to come by). But study after study I have read says that clients prefer knowing that their advisor is an expert in their field, and would be more likely to recommend their colleagues to such an advisor. As it were, I had worked with a good handful of medical professionals at my previous firm, and also had several friends starting out in the medical field. As I researched that market further, I came to find that there were tens of thousands of medical professionals working in my surrounding community. So I chose to specialize in the needs of medical professionals. It was slow at the start, but now that I have had several months to get the word out, I am picking up more clients and seeing the traction of my efforts. And in less than a year’s time, I have already established with several medical professionals that Panoramic is where you should go to get help with your financial needs.

In terms of fees, there is really no consistency across our industry. This makes it very hard for clients to compare one firm to the next. I wanted to do my best to create transparency with my fees. So I charge a lower-cost percentage-of-assets fee for portfolio management. If clients want financial planning on top of that, I charge a flat fee for a comprehensive financial plan, and a reasonable monthly retainer for help implementing and monitoring the plan going forward. This allows clients to have a clear understanding of what they are paying for, when they pay it.  It also allows clients with minimal assets and potentially lots of debt (most young medical professionals) to still access and pay for financial advice. My initial clients have embraced this fee model so far.

Lastly, I want people to think of Panoramic Financial Advice as a pioneer in the financial community. Therefore, I try to be forward thinking with my communication with clients, fees, website, document storage, and any other area that I can. As I wrote in my first blog “I didn’t want to be part of a firm that claimed greatness over the past 20 years; I wanted to build a firm that would be great over the next 20 years (and beyond).”

That pretty much sums up the qualitative side.  It’s been a fun adventure.  Now for more on the start-up costs of Panoramic. First, I can’t emphasize enough that the financial advising business is not the place to take shortcuts or try to cut necessary costs to help lower your price.  Certain software, hardware, research, and other assistance should not be passed up if you believe it will add value to your client relationships and ultimately your firm. Most people looking for an advisor want to see that you are giving them great quality advice and service – if you aren’t, they will think they are better off not hiring you:


The Red Tape


Company Name:  When you come up with a company name that you like, make sure no one else has taken it and file a fictitious business name statement ($95). Go online to your city or state’s website to see how.  

Form a company:  If you are starting on your own, you can consider operating as a sole proprietor, LLC, or a corporation. Sole props are the easiest to form and cost the least, but come with significant liability exposure.  Everyone should consult a professional for legal advice on what type of business structure to take (my attorney charged me $339).

Form an RIA:  You could try to file all the papers yourself. But unless you’ve done it before, it is not worth the time and effort. There are a lot of options out there to help you with the process. The low-cost ones are pretty boiler-plate and from what I heard did not have the greatest reputation for getting you through the filing process in a timely matter. I interviewed several of them, and wasn’t happy with what they said. Sophia recommended Comprehensive Securities Compliance Solutions (CS2). My search ended there. CS2 was great. Paul and Mary were very personable and knowledgeable, and felt much more consultative than the other firms. They also got my filing approved with the California State Securities Board in record time (just over a week). In addition, they helped with my U-4 registration with FINRA ($135). Best of all, their fee came in at a very affordable $1,950.  

Business Checking:  Open a business checking account separately from your personal accounts.  It will help you clearly keep track of your expenses and deposits, which will be very helpful come tax time. Beware of the fees the account charges, and also realize that there are some service limitations with local banks and credit unions. Do your research.

Get E&O Insurance coverage:  I researched a few reputable vendors and also sought the advice of my brother-in-law who works in the insurance industry. CalSurance came highly recommended. CalSurance is very affordable and specializes in RIA’s ($1,819 per year for a $1 million policy). I did have a minor headache with customer service when I first signed up, which eventually got resolved, but it could have been handled better.




In terms of a computer, I decided to make the jump from a PC to a Mac Book Air ($1,637). I wanted something lightweight and mobile, and for years had heard the ravings of the Mac. I think it all depends on your personal preference.  My Mac took a little getting used to, and I had to install Microsoft Office ($111) because I heavily depend upon Microsoft Excel for a lot of the projections I run. Do what works for you. 

I bought a Doxie Go Scanner ($237) because it is easy to take with me wherever I go.  And because I try to meet my clients wherever they are, that makes a lot of sense.

I pay for a UPS Mailbox ($360/year). I work out of a home office so it made sense to have an alternate place to have my business mail sent to. The great thing about the UPS mailbox is that it is not a P.O. Box, but actually gives you a “suite” address.




Choose a CRM:  I’ve used RedTail a lot in the past, but didn’t like its lack of customization.  I demoed several other CRM’s as well. The best CRM specifically built for financial advisors I found was Wealthbox.  But there were still some limitations in my opinion. I ended up taking Sophia’s advice on a CRM called Less Annoying CRM.  It is not made for financial advisors but is extremely customizable. Basically, anything I need it to do I can find a way to make it happen in LACRM.  And it’s only $10 a month!  It also integrates well with Google Apps and MailChimp, which I have found to be very convenient and helpful.

Protect Your Information:  Passwords are a pain to remember. I use LastPass ($80/year, paid in advance) to protect and store my passwords so that I don’t have to remember them all.  Other services are available, some for free if you have a minimum number of passwords saved. I also got Private Wifi ($10/month) because I am out and about working a lot.  Public networks are not secure, and you need to protect yourself.  Private Wifi provides bank-level security and encrypts all of your Internet communications. No one can see your Wi-Fi signal. Lastly, I use CrashProPlan to back up the data on my computer ($10/month). It’s secure and easy to do.

Social Media Archiving:  As an RIA, you will need to archive your social media communication. Arkovi was recommended to me by several people, and because its price was pretty competitive, I went with it ($39/month).

Paperless Document Storage:  I use Amazon Web Services for all of my document storage (free until I reach a certain storage level – relatively inexpensive after that).  I am completely paperless in terms of storage. That is why the Doxie Go comes in so handy, too. AWS has very affordable storage and archiving features, both of which are going to be a necessity for you as an RIA if you choose to be paperless.

Accounting/Billing:  I use Quickbooks Online ($10/month) for my accounting software and also to bill my clients. It’s very robust and pretty simple to use.  Their customer service reps are also very helpful.


Market your firm proudly


Get a Logo:  There are plenty of options here.  A lot of web designers will be happy to help you design a logo. I worked with a friend who gave me a great deal ($200) and ended up designing an amazing logo that I still love six months later (thanks Gordon Howell)! It resonates with my “why” story and gives me a great talking point when people ask about it.

Build a Modern Website:  Squarespace is a great platform to build your own website, and pay for ongoing hosting and a domain for a very affordable price. I would recommend using a web designer that is familiar with Squarespace to help you with the overall design and content of your site ($1,190 for the professional I used, which includes the cost of the website pics - Thanks Bekah Hanson!).  The great thing about Squarespace is that it offers great templates, converts seamlessly from a laptop to a tablet to a smartphone, and has access to Getty Images for your photos. I made the mistake of buying my domain and security certificate from GoDaddy ($93) before going to Squarespace, and could not transfer it.  So now my GoDaddy domain points to Squarespace, but I have to pay double for the hosting (a total of $22/month). Start and end with Squarespace and I think you’ll be happy. Once you’ve selected a domain, register it with Google to get a professional email address and Google business apps ($5/month). You may want to consider using Google Voice, too.

Professional Photos:  I was lucky enough to have a friend who runs an amazing photography business (PearlyHens Photography) up in Napa to take my professional pics for me free of charge (thanks Aurora!). Check your inner circles too.  Chances are you know a good photographer who might help you out a bit.

Business Cards:  There are plenty of options here too. I used a very affordable website called and was able to create and order 1,000 business cards for about $20 after shipping charges. can produce more creative business cards if that’s what you are looking for, but it comes at a premium.

Social Media:  I would make sure you have Facebook, LinkedIn, Google Plus, and Twitter pages/profiles, as I have heard this can help boost the relevancy/traffic of your website, depending on how active you are. Keep it professional, because most prospects and clients will visit one or more of these social media pages at some point. Also, stay regular with your posts and make them relevant, as that will help enhance your online presence, which can eventually lead to more clients.

CFP Dues:  Make sure to pay your annual CFP dues ($325/year). It’s one of the best ways to show people how qualified you are to do your job well.

Free Stuff:  I mentioned before that Mailchimp (free) integrates with LACRM.  It also integrates with Squarespace.  So when people sign up for your blog, their info gets imported straight to Mailchimp, which was a huge plus for me.  Mailchimp allows you to do all sorts of email campaigns for free, and has some great analytical tools to help you understand who’s reading your stuff.

Start your own blog. I think it is very important to develop your own voice and to put yourself out there so that clients and potential clients can see that you have your own opinions that offer value. This can be especially helpful if you specialize in a niche, because your niche will be more likely to sign up for your blog if they know all of the content is specifically geared towards them.

Sign up for Help A Reporter Out (HARO). You will get three emails each weekday with a list of topics professional writers and bloggers are looking for quotes for their article. If they choose you, it’s a great way to get recognized and quoted on a high-traffic website in your area of expertise. 


Tools for Clients


Financial Planning Questionnaires:  Precise FP ($240/year) is a very convenient, professional-looking online questionnaire that gathers important data from your clients. I love how comprehensive it is. It also stores that info for your client until the next time you request their info. That way, they only have to update the things that have changed, making it really convenient for them. 

Financial Planning Software:  I use MoneyGuidePro ($995/year) to do a lot of the financial planning process.  It allows the advisor and client to play with different assumptions, which my clients really like. It integrates with Precise FP and a whole host of other software, making it very useful. It takes a while to really learn the system to be able to use it to its full potential, but well worth the effort in the long run. For custom analysis, I create my own spreadsheets in Excel.  Sometimes it is just easier to show clients how something works in a customizable tool like Excel.

Online Video Chatting:  Skype is great for clients that are out of town or maybe in town but just don’t have the time to drive to meet you somewhere.  It preserves the human touch of the relationship while leveraging technology.  It’s the best of both worlds and it’s free!

Electronic Signature:  I am currently on a free trial for EchoSign by Adobe ($15/month) and enjoying the capabilities and convenience. But there are other good ones out there like DocuSign.


Other Recommendations


Join professional groups and attend conferences:  Do some research and find which conferences and groups fit your niche/passions the best and find a way to be a part of them. It will help you stay current and keep your firm feeling fresh. The FPA NorCal conference is one of the best conferences to attend on the west coast. The FPA NexGen Gathering is a great landing spot as well (have to be 36 or younger), because there you really get to see all that is changing and thriving in the up-and-coming financial advisor community. These places are great for networking too, and you might form some long-standing professional relationships. The XY Planning Network is a great professional group to join, especially if you are a new RIA looking to serve the future generations of retirees. 

Stay up to date on the latest news in financial planning:  I recommend signing up for the daily emails that Michael Kitces (Kitces Blog) and Bob Veres (Advisor Perspectives) send out.  These are a great source for keeping up with what’s going on in the industry on the business side of things, but also keeping up with the latest content in financial planning and portfolio management. They both offer paid-for publications (Kitces’ Newsletter & Veres’ Inside Information), which are great resources (both come with a membership to the XY Planning Network). RIABiz sends out frequent email publications that I find helpful as well. Lastly, there are helpful posts on Wall Street Journal's Wealth Advisor page.

Leverage what you are best at:  When I went out on my own I assessed the things I was really good at when it came to picking up new clients. I taught classes at the local adult schools on retirement planning which had led to a handful of clients over the years. I have hosted social security workshops for clients and their invitees at the local country club, which has also led to new business. If anyone was interested in doing business with me, I was typically pretty good at sitting down and showing them the great benefits of the services I could offer. So for me, my strength was in developing good presentations for larger groups, which ultimately led to appointments with prospective clients. Determine what you are best at from a marketing perspective and run with it.

Don’t focus on too much and not get anything done:  This is something I began to struggle with as I got most of my business set-up done and started to move into servicing and marketing mode. There will always be a million possible things to do for your clients and prospects. Take a step back, prioritize those things by what will help make your business most successful in the long run, and then attack three (or less) of those things until you have reached a resolution. I have been guilty of and seen too many business owners waste time dreaming up great things yet never getting anything done. Don’t fall prey to it.

Develop procedures and document them:  It’s hard enough stepping out on your own, so who has time to develop and document procedures? I know it is much more instinctive as a new business owner to just shoot from the hip with what you know and put your nose to the grindstone without ever thinking about “how” you are operating. But you’ve probably heard the phrase “work smarter, not harder.” If you do this, the result will be that you become more efficient, you will develop better service because you take the time to evaluate your processes, and when you go to hire someone, it will make training them ten times easier. It’s a pain and a little more work up front, but pays huge dividends in the long run.  A lot of times it makes the difference between the average firms and the great ones. Here’s a great white paper by Schwab on the topic.


I hope my experience through my first year as a new RIA has been helpful. If you choose to make the jump to start your own firm, I wish you the best and encourage you to keep working hard even when results don’t come as soon as you might expect them to. It may take just under $10,000 to start an RIA, but it will take an enormous amount of time, effort, and patience to take it to the world-class level. Go make it happen!