Client Acquisition Articles

By understanding the complexities of military and government retirement benefits, financial advisors can provide essential guidance to service members and federal employees as they plan for their retirement.

• Military Retirement Planning
• Federal Employee Retirement Planning
• Tax Considerations for Military and Government Retirees
• Staying Updated on Policy Changes

Military Retirement Benefits & Planning

As a financial advisor, you can be part of the process of helping military members transition to civilian life. Some of the items you can help them with during this transition is developing a retirement budget, figuring out which benefits they might be entitled to, suggesting strategies to manage any debts, and planning  for their future. Ultimately you are there to help them create a retirement plan that gives them a peace of mind for the next phase of their lives.

Understanding Military Pensions

As part of helping them develop their retirement budget, making sure how their retirement pay will be calculated is an important part of the process. Depending on when they enlisted, they could have either of the three different pensions:

1. Final Pay
2. High-3
3. Blended Retirement System (BRS)

A Final Pay pension applies to military members who entered service before September 8, 1980. The amount of money they receive during retirement is tied to how much they earned at the end of their career.

A High-3 pension is a payment system that applies to military members who entered the service after September 7, 1980. This system provides retirement payments based on the average of the highest 36 months of basic pay. 

The Blended Retirement System, introduced in 2018, is a plan that combines a pension with a contribution element, typically through a Thrift Savings Plan (TSP). The pension component in a BRS is a straight forward 2% per year they were in service multiplied by the average of the highest 36 months of basic pay. 

The retirement account (TSP) is credited with an automatic 1% government contribution, with matching contributions up to 4% after two years of service. There are some differences between a TSP and civilian  retirement account including what mutual funds are available to invest in but generally the strategies are similar: maximize individual contributions to leverage matching contributions.

Guiding Clients Through Military Disability Benefits

Military clients may have lots of questions about disability benefits, especially if they were discharged due to injury. So having a good understanding about the different types of disability benefits such as service-connected disability compensation and Combat-Related Special Compensation (CRSC) will be helpful. 

Another aspect to keep in mind is helping them understand how to address the tax implications related to the Department of Veterans Affairs (VA) disability compensation as it may affect their overall tax liability. Service-connected disability payments and CRSC payments are tax exempt.

Service-Connected Disability Compensation

Service-connected disability compensation is a tax-free monetary benefit. Servicemembers with disabilities that are the result of a disease or injury or something that was aggravated during active military service are eligible for this benefit.  

Combat-Related Special Compensation (CRSC)

CRSC is a special tax-free monthly benefit for eligible military retirees with combat-related injuries. It allows them to receive both their full military retirement pay and their VA disability compensation, without the usual offset. To qualify for CRSC, your client must have at least a 10% VA disability that is directly related to a combat/operations-related disability as approved by their branch of service.

Helping Military Families Access Education Benefits

If your client is looking to pursue a professional designation or their spouse or child is interested in utilizing some of the education benefits military families have access to. Financial advisors should help them better understand education benefits like the GI Bill, the Military Spouse Education Assistance Program (MYSAP), and Tuition Assistance for Children of Military Personnel (TAFE). 

Your clients may be not aware of all the education benefits that are available to them and having access to resources for tuition, fees, and books certainly can help if they are on a fixed income. 

The GI Bill and Transfer Options

Retirement plans for military members often include considerations for children’s education and spouses’ career goals too. So having up to date information on timelines is crucial for veterans because those can change. 

Transfer requests should generally be made while on active duty and typically beneficiaries of GI Bill benefits have 15 years from the service members last discharge from active duty to use the benefits.  

GI Bill benefits accrue based on length of service. Some of those benefits are:

• Coverage of tuition and fees (Up to $4,000 per year)
• Housing allowance based on the location of the school
• An annual book and supplies stipend
• Assistance for obtaining professional licenses and certifications

Military Spouse Education Assistance Program (MYSAP)

Many military spouses put their careers or educational goals on hold during their partner's service. Retirement can be an excellent time for them to pursue those goals.

Financial advisors can help their clients determine if their spouses meet the eligibility requirements. Those are typically:

• Spouses must have a high school diploma or equivalent
• Service member should be in specific pay grades (E-1 to E-6, W-1 to W-2, and O-1 to O-3)
• Service member is active duty but eligibility may extend to retired spouses

MYSAP can help military spouses gain the skills and education needed to secure better employment opportunities, contributing to the household's financial well-being in retirement.

Survivor Benefits and the Survivor Benefit Plan (SBP)

Providing a comprehensive overview of survivor benefits and SBP options including its costs, benefits and implications is an important aspect of helping a military member develop a retirement plan. Your clients will probably have questions about how a SBP affects other benefits like Servicemembers' Group Life Insurance (SGLI) and Veterans' Group Life Insurance (VGLI). 

You should be prepared to explain the different levels of SBP coverage available and the associated costs. The cost is typically a percentage of the retiree's chosen base amount, and that amount determines the benefit the survivor will receive.

Another aspect to explain is how SBP premiums might affect your client’s retirement income. The SBP pension deductions can be a significant amount.

The decision to enroll in SBP is generally irrevocable or very difficult to change after retirement. Therefore, the client needs to be fully informed and comfortable with their decision.

Considerations for Advising Veterans on VA Healthcare

When discussing VA healthcare with your client it's important for you to know how they plan to or already have exited the military. Their discharge status will affect what type of VA benefits they can enroll into.

After figuring out which VA benefits they can apply for, you can help them with cost projections regarding how much they can budget for their healthcare in retirement, including potential out-of-pocket VA healthcare costs, Medicare premiums and other expenses. 

If they are still on active duty, it’s important to stress the importance of maintaining accurate records of military service and medical records. This will help with VA benefits enrollment applications and processes.

Helping Military Clients Understand and Utilize TRICARE Benefits

After military members transition to retirement their healthcare coverage will shift from active duty TRICARE to retiree TRICARE. This means there might be new costs like monthly premiums or copayments they haven’t had to pay before.

So as a financial planner you will need to help factor these costs into their retirement budget. If they are eligible for Medicare, TRICARE for Life (TFL) will be an excellent option to supplement it. 

Take the time to educate yourself and your client on how the different TRICARE plans and their costs to find a best fit for your clients financial situation. 

Servicemembers' Group Life Insurance (SGLI) vs. Veterans' Group Life Insurance (VGLI)

If you discuss life insurance with your client they will most likely be familiar with SGLI. That is the policy provided to active-duty service members and typically service members are automatically enrolled into SGLI. They may have questions about what happens to this benefit after they separate from active duty. You’ll want to become familiar with Veterans' Group Life Insurance as it’s common for military members to roll over into this policy during retirement, however there are other options in the private market, which you may want to evaluate with them.

If the client is interested in transitioning away from SGLI to VGLI, they should know the deadline for a service member to convert their SGLI coverage to VGLI is usually 1 year and 120 days from separation, so it’s important to discuss this early on in the planning process.

They should also be aware that VGLI premiums can be a significant expense in retirement, especially as the veteran ages. It might be beneficial to discuss alternative life insurance options that might be more cost-effective or provide better coverage for your client’s specific needs in retirement. Ask your client to provide you with details on their current SGLI coverage. This will help you compare costs and assess whether an alternative option is worth pursuing.

Helping Clients Utilize VA Home Loan Guarantees

Another area that often comes up in retirement planning for military members is relocating and buying a house. Military members may not know that VA home loan guarantees are available to them including their surviving spouses, and certain other individuals. They may be interested to know how some of the specifics around service requirements, including minimum active-duty service and discharge type affect VA home loan eligibility.

Another point to cover with clients is how retirement income, including their military pension and social security benefits can be used to qualify for a VA home loan. Purchasing a home after retiring from the military is a big decision and using a VA home loan may be a great option for them. 

Division of Military Retirement Pay in Divorce

If your client is married and has children, having some basic information about unique divorce issues in military families may benefit your client during their retirement planning. To start they should know that military retirement pay is governed by both federal law and state law. So this means that while the federal law grants state courts the authority to divide up your pay, the specific rules and procedures vary by state. 

Help them understand the 10/10 rule. This rule states that a former spouse is eligible to receive direct payments from the Defense Finance and Accounting Service only if the marriage lasted at least 10 years and the service member performed at least 10 years of creditable service that overlapped with the marriage. 

Child Support and Alimony Considerations in Military Cases

Another way divorce can impact retirement planning for military members is through child support payments. Federal law limits the amount of military retirement pay that can be garnished for child support to 65%. So having that understanding up front can help with planning for other expenses like healthcare and mortgage payments.

Learn how you can become a retirement planning expert and improve your career with the CRPC® designation from the College for Financial Planning®—A Kaplan Company.

Federal Employee Retirement Planning

Financial advisors play a crucial role in assisting federal government employees with their retirement and pension planning, especially if their retirement was premature. This includes creating a retirement budget, identifying new benefits like education assistance, offering debt management strategies, and developing a comprehensive plan for a secure future, ultimately providing peace of mind in their retirement.

Understanding the Federal Employees Retirement System (FERS)

FERS is a three-tiered retirement system for federal employees that’s made up of a Pension, Social Security and a Thrift Savings Plan (TSP). 

The first step in developing a budget will be to understand what their pension payment will look like. It’s good to know that the amount the client receives is based on years of service and the average of the highest 36 consecutive months (High 3) of base pay. The pension amount is based on their years of service and each year adds a percentage to the benefit calculation. Usually it’s 1% per year of service but it can be higher if retiring at age 62 or later with 20+ years of service.  

For example: If someone retires with 30 years of service and a High-3 average salary of $80,000, the basic pension could be calculated as (30 years * 1%) * $80,000 = $24,000 per year.

Federal employees under FERS receive Social Security which will be used to supplement their FERS pension. When Social Security benefits can be claimed varies and the timing will affect their FERS pension so getting a good picture of all income streams will be an important first step. 

Just like military clients, federal employees also have access to The Thrift Savings Plan. For context, it’s similar to a 401(K) where employees can contribute pre-tax money and the government may provide a matching contribution. There are TSP contribution limits and it’s best to encourage clients to maximize contributions especially when there are government matching contributions.  

A TSP can be vested in various investment funds so understanding your clients risk tolerance is key to setting up a plan that meets their goals. You’re also going to want to discuss the different withdrawal options of a TSP to your clients because they may not be aware of all the different options. There are 

• a lump-sum withdrawal option
• a partial withdrawal option
• a monthly payment option
• an annuity option 

All have different tax implications and should be factored into the retirement plan for a federal employee. 

Assisting Federal Employees with Disability Retirement

Federal employees do have access to disability retirement benefits, especially if the disability is related to their federal job duties. The employee may be eligible under the “bruner presumption” which shifts the burden of proof to the Office of Personnel Management. They have to prove the employee is not disabled, rather than the employee having to prove they are disabled.

If they become unable to work due to a medical condition, a disability benefit can help supplement their pension income along with their Social Security benefits. 

Education and Training Opportunities for Government Employees

If your client retired from their service as a federal employee prematurely, they may ask you to help them factor into their retirement plan assistance with education and training opportunities. Professional certifications can enhance job prospects for those seeking part-time work or a new career.  

Federal Employee Group Life Insurance (FEGLI)

Most federal employees are automatically enrolled in Basic FEGLI coverage when they begin federal service. FEGLI premiums are deducted from their paychecks, and the cost of coverage increases with age.

The cost of FEGLI in retirement is significantly higher than during employment because the government no longer shares the cost with the employee. FEGLI coverage can be continued into retirement but coverage decreases over time after retirement unless the employee elects full reduction or no reduction. This means it’s important for you to carefully consider whether or not continuing FEGLI in retirement is the best option for your client. 

Advising Clients on the Federal Employees Health Benefits (FEHB) Program

Federal employees who retire with an immediate annuity from their pension are typically eligible to continue their FEHB coverage into retirement. An "immediate annuity" generally means that retirement benefits (pension payment) begin within 30 days after separation from service.

When a federal retiree becomes eligible for Medicare, they can still enroll into Medicare and retain their FEHB coverage. Many federal retirees choose to retain their FEHB plan because it usually offers broader coverage and comes with lower out-of-pocket costs than Medicare alone, which ultimately gives them more financial freedom.

Tax Considerations for Military and Government Retirees

Taxes will significantly impact both military and federal employee’s retirement income and overall financial situation. As a financial advisor, it’s important to develop a tax strategy that is up to date and proactive. This includes understanding various income sources (pensions, social security, etc), whether or not that income is tax-deferred or tax-exempt and the state laws your client plans to retire in. 

Advising Clients on How Military Retirement Pay is Taxed

Military retirement pay is usually subject to federal income tax, and the state tax treatment varies. Some states may fully tax military retirement pay while others may offer exemptions or partial exemptions. Some states do not have state income tax at all like Florida and Tennessee. 

It’s important to remind clients that their regular military retirement pay is generally taxable, certain related benefits, such as VA disability compensation and Combat-Related Special Compensation, are typically tax-exempt.

Understanding TSP Tax Rules and Rollovers

Both military and federal employees have access to a Thrift Savings Plan. These plans function very similarly to other retirement funds which have various options for withdrawals and rollovers. Depending on your client's financial situation, it may be beneficial for them to diversify the types of savings accounts they have by rolling over their TSP funds into a Roth IRA or a Traditional IRA.

Or perhaps they are eager to start withdrawing from their TSP and need help choosing how to withdraw from their TSP. They have a few different options including: lump-sum, partial withdrawals, monthly payments, and annuity options. Each option has different tax implications so helping your clients understand the tax implications of each option is an important task as the financial advisor.

If they want to start taking withdrawals from their TSP before the age 59 1/2, they may be subject to Required Minimum Distributions (RMDs), which are mandatory withdrawals that must be taken by a certain deadline each year. As a financial advisor it’s very important your clients understand the RMD rules and how they could affect their retirement income.

Staying Updated on Policy Changes for Effective Military & Government Financial Advising

Staying updated on policy changes as a financial advisor who helps this specialized clientele can be challenging which is why Kaplan Financial has a special course titled 'Understanding Social Security, Military and Government Retirement Benefits' to their Chartered Retirement Planning CounselorSM - CRPC® Program. The CRPC® program will empower you with the expertise needed to navigate these complex retirement systems and deliver exceptional value to your military and federal employee clients.

Succession planning isn’t just a backup plan—it’s become a core business strategy. In today’s unpredictable environment, where market volatility, evolving client demands, and demographic shifts converge, advisory firms need to think in the short term about long-term leadership continuity.

According to the 2023 Cerulli Associates U.S. Advisor Metrics Report, more than one-third of advisors are expected to retire within the next decade—but many firms are still unprepared. Waiting until a transition is imminent risks valuation missteps, client attrition, retention of top talent, and skills gaps that could have been avoided with earlier, more intentional planning. 

Future-Proof Your Firm

To future-proof your firm, succession planning needs to extend beyond legal documents and ownership clauses. It means building internal leadership pipelines, actively developing successors, and strengthening client relationships through every transition stage.

3 Questions to Ask About Succession Planning Right Now

1. Are Our Buyout Terms Still Viable in Today's Market?

Higher interest rates and tighter margins are reshaping firm valuations. Succession plans should reflect current economic conditions, advisor productivity, and credentialing timelines.

2. Have We Named—Not Just Identified—a Successor?

Clients value clarity. Publicly naming and empowering a successor helps preserve trust, especially when that leader is visible and involved in key relationships early on.

3. Is Our Transition Plan Relationship-Driven or Just Paperwork-Driven?

Clients notice the difference. A phased transition that includes mentoring, joint meetings, and shared planning responsibilities is far more effective than a handoff defined by signatures alone.

Final Thought

Done right, succession isn’t a disruption—it’s a growth opportunity. It keeps operations steady, preserves institutional knowledge, and reinforces your firm’s values and vision. In a crowded and competitive landscape, that kind of continuity is a differentiator.

Supporting Your Organization Through Today's Challenges and Tomorrow's Growth

Kaplan is proud to be your learning partner with resources available to support the learning needs of your business. Let us know how we can help you and your employees navigate the challenging times facing us all.

If you’ve decided to become an insurance agent (learn more about that here), you’ve just gotten your insurance license, or you’ve just been hired, you’re probably eager to build your business. To help you get started, here are 10 resources with practical information you can use as you start planning your next steps.

1. 21 Insurance Sales Tips For Young or Inexperienced Insurance Agents

“I hate to see young producers fail, and even more, I hate seeing agents miss out on the largest pool of cheap, passionate, and open-minded talent,” says founder and CEO of InsuranceSplash John F. Carroll at the beginning of this timeless 2016 article. He then shares advice that ranges from how to dress to avoiding unprofessional slang to becoming a marketing expert (here are eight tips that can help with that). It’s a great short read full of memorable tips you can take all the way to the bank.

2. 10 Best Tips to Grow Your Insurance Business

This article from Pinney Insurance is actually part 2 of a series. We found this interesting because part 1 (also included in our article) is sales tips only, yet this article encompasses everything needed to grow an insurance business. You’ll find tips like how to create an annual business plan, form partnerships, and implement Google’s 20% rule, all tailored for insurers who want to succeed.

3. 7 Prospecting Ideas for Insurance Agents with Less Experience but Lots of Drive

Prospecting is a critical part of any insurance business. In this article, written by Double A Solutions CEO Archie Heinl, the focus is on prospecting for less experienced agents with a lot of energy and a grasp of 21st century technology. For example, if you have a mastery of LinkedIn, a webcam and a quiet place to record, or major SEO skills, he shares how you can put all of these and more to work to grow your insurance business.

Want more advice on growing your insurance business from successful agents? Download this free Launching Your Insurance Career eBook.

4. 10 Sales Tips to Grow Your Insurance Business

Part 1 of Pinney Insurance’s series is an excellent overview of 10 things agents can do to build their business. Probably the most important tip for any agent in this day and age is #1, finding your unique value proposition: “These days, most of us compete on an even playing field when it comes to products and pricing. So why should a prospect choose you? What can you give them they can’t get anywhere else?” It also covers how to handle some of everyone’s least favorite aspects of sales—cold calls and scheduling sales times.

5. Today’s Hot Markets: Buyers Hungry For EPLI, Cyber and More

As you consider your unique value proposition, you might be thinking that specialization in a niche could be the way to go. Or, you might want to brush up on the insurance topics that are on the minds of prospects as a way to start a conversation. Either way, this article by Insurance Journal Magazine Executive Editor Andrea Wells and MyNewMarkets.com Associate Editor Amy O’Connor looks at “five industry sectors and insurance markets that could offer opportunities,” such as employer liability and harassment, outdoor recreation, and drones, and features agent commentary on each. (Emerging trends are also why continuing education is a requirement in many states for insurance license holders. Learn more about insurance continuing education.)

6. Insurance Sales - How to Overcome the Top Three Objections

Objections: there’s no getting away from them in the insurance business. But, there’s no need to fear them. “Objections are objections are objections. Prospects and clients have been using the same ones for years because they work to blow off 80% of your competition,” says the president of Mr. Inside Sales, Mike Brooks. In this article, you’ll find encouragement and scripts you can use to get you past the three main objections you’ll likely hear over and over again.

7. 7 Marketing Ideas for Insurance Agents

You might be selling insurance, but since it’s a business, you’re going to have to market it. “As an insurance agent, your primary focus is on clients who are in need of an insurance policy right now. However, you also need to focus on keeping in contact with clients during the months and years in between these transactions,” explains Marketing Coordinator Haley Martenson in her OutBoundEngine article. Her list is helpful for any insurance agent who needs to brush-up on effective marketing tactics.

8. 5 Social Marketing Trends for Insurance Agents

Almost any resource on growing your insurance business is going to mention social media in some capacity. This article by Agency Revolution President Rick Fox goes beyond the wise counsel of using LinkedIn and Facebook to look at the latest social media trends and how you can use them to your advantage in your insurance business. He even has advice for selling to Generation Z.

9. Insurance Content Marketing: How to Create Exceptional Content in a “Boring” Industry

Ten years ago, content marketing as we know it today didn’t exist. But it should be on the “to-do” list of anyone hoping to grow their insurance business. Consider the fact that as much as 80 percent of today’s buyers research products and businesses online before making a purchase of everything from shoes to an auto insurance policy, and you can see why content (marketing) is king. In this article, Content Marketing Strategist and Editor Allie Untracht shows not only what content can do for your insurance business, but also how to make it compelling.

10. Agents Of Change: Rethinking Insurance Agency Marketing

In the vein of the business-book-disguised-as-novel (such as The Goal and The Greatest Salesman in the World), authors John M. Tate, Jay Adkins, and Natalia Tate of Agency Marketing Machine tell the story of a fictional character to share a strategy for successful insurance marketing (for agencies and agents alike). Because it’s a story, it’s a quick read (for those worried that reading a book cuts into a busy schedule of trying to sell policies), but at the end of each chapter, the authors share successful tactics that you can put to use quickly.

----------

We hope you find these resources useful, energizing, and inspiring. If you’re thinking about a career in insurance, or how you can be more successful, you can find more resources here. If you're ready to take the plunge and earn your license, Kaplan's insurance certification study packages can help you succeed.

Being a presence on social media can be daunting for any business, even though it is recommended by most experts as a top marketing strategy (for example, it's in an article on marketing for insurance professionals here). How much should we post? What should we post? Who should we follow? We’ve developed a list of five quick tips to help you answer these questions and create a social media strategy for your organization.

1. Follow the one-in-seven rule

No one likes a business that oversells on social media. To keep your followers engaged, a good rule to follow is to only overtly promote your business in one out of every seven posts. The other six should be shares of valuable content, including posts from others that you follow. It may be helpful to create a calendar to plan out your posts, so you can keep track of how often you are plugging your business.

2. Share your expertise

Every business has unique information they can share with their followers. You can look to your own customers to pull out trends to share. An insurance agency, for example, would be able to write an article about what age demographic is most likely to buy pet insurance; or answer what kind of vehicle was most often stolen in your state. You could even start a trivia campaign and quiz your followers on interesting facts offering a special offer to those who answer correctly.

3. Use location-based marketing

If you are a location-based business, you will want to concentrate your efforts on getting followers in your area. Social media ads allow you to tailor your location, so your ads only serve to people in the community you set. You will also want to share content that is relevant to the people who live in your area. You may also want to consider offering a discount to anyone who checks in to your business while they are there. This is a very cost-effective way to leverage the reach of your local customer base organically.

Be sure to join location-based groups on social media that are relevant to your business. LinkedIn, in particular, is full of these types of groups. By participating in the conversations, you can network and gain more exposure for your business.

4. Be interactive

This may sound like a no brainer, but it requires a surprising amount of due diligence. Being interactive in the social media community means continually sharing content that attracts and engages followers. It also means thanking your followers and commenting on and/or sharing their content as well. By showing appreciation for your followers, engaging with them, and ensuring you answer their comments on your social media accounts, you will make a lasting impression on your customers.

5. Stay current

Set up alerts to your phone or email when anyone engages with your social media sites, to ensure that you respond quickly to their posts. It is also a good idea to follow the social media accounts of trusted organizations and thought leaders relevant to your industry in order to stay up-to-date on current events related to your business. You may want to write a point-of-view article on behalf of your business or simply share articles from other sources. This will help establish your business as a reliable source for happenings in your industry.

Additional Resources:

The Social Advisor by Amy Mcilwain

Using Social Media to Promote Your Business by Shannon Belew and Joel Elad

----------

Looking for more tips and tricks in the financial services industry? Check out Kaplan’s Career Corner for more great articles. Be sure to check out our Professional Development programs as well. Kaplan is here to help you succeed from hire to retire!

If you work in the financial services industry, odds are you are dependent on referrals to build your business. Do you have a referral strategy in place? Many people don’t because they aren’t comfortable asking for them. In this article, the Kaplan Financial team shares some easy and unobtrusive referral marketing strategies that work.

When to Ask for a Referral

Everyone knows they should ask for referrals, but many people get tripped up on the timing of when to ask. Should you ask for referrals right away or wait until you have built up a long relationship with someone? Kaplan National Account Director Eric Wilson shared his take on this question.

Eric says…

The best time to ask for referrals is always now. I used to wait until the client was done with their experience or services as I felt I had to earn the right to ask for referrals. A happy customer who joked about not wanting to give referrals after he forgot his password and was locked out of his account told me great advice, ‘Why wait to ask for referrals when something can go wrong in a customer’s experience?’ Regardless of whether something negative happens or not, the entire customer experience isn't in your hands. So, ask for referrals as soon as you can in the process.

Remember that it is human nature to want to help others succeed. If you don't ask for referrals you'll likely get zero, and if you ask and get zero you are still at the same spot if you hadn't asked.

Don't wait, you'll be surprised with the results.

Ways to Ask for Referrals

Now that you know when to ask for referrals (now!), what is the best way to go about asking for referrals? There is no one way that works best – it is all about what is most comfortable for you.

One direct approach is to touch base with current and past customers regularly. Even if you are not doing business with them at the moment, send them a letter or email appreciating their ongoing support and ask for referrals. Remind customers that your business is supported by their referrals. If they like you and want to keep you in business, they will be more motivated to help you.

Give and get promotions (ie. get 20% off for you and your friends if you refer them) are also an effective referral marketing strategy to grow your business. Your clients will be motivated to share referrals because there is an additional incentive for them.

Steve Gordon’s book, Unstoppable Referrals, recommends a less direct approach. Rather than asking straight out for referrals, supply your clients with something valuable they can give their friends and associates. This takes the focus away from you asking for referrals and instead does both your clients and their contacts a favor. If you sell life insurance, for example, a pocket tax guide with your agency’s logo branded on it would work well.

Don’t forget about referrals through websites and social media too. Your happy customers can influence others they don’t even know to seek you out through popular review sites like Yelp. Add links to your website pages (in the footer, for example) for all the review websites you have a profile on (Yelp, Facebook, etc.). Add those same links to your email communications in your signature. Be sure to thank your reviewers when they leave a review!

----------

Looking for more career tips? Visit Kaplan Financial Education’s Career Corner for the latest tips and tricks to help you throughout your career in financial services. If you are interested in advancing your career in financial services, check out our insurance, securities, CFP® certification, and professional development programs on the Kaplan Financial Education website.

You set up all the paperwork. You registered your business and ensured everything was compliant. You bought all the hardware you needed to run your own RIA smoothly, and your financial planning software and tools are standing by, ready to accept your first clients.

You powered up your new laptop, made the final approval on your website, and launched it into the world. Maybe you even sent out your first social media post or email newsletter to make the big announcement: your financial planning firm is officially up and running, and the doors are open to new clients!

But you soon realize...the only person reading your blog posts is your mom, and your significant other is the only person dutifully liking all those posts on your firm’s Facebook page.

 First, look at this as a positive. When you first launch your business, you may not have much cash flow or revenue. But what you do have is time. And if you can invest your time into the following strategies, you’ll start bringing on your first real clients soon.

Connect with Other Advisors

By connecting with other advisors, and providing them a place to send clients they can’t or don’t want to work with, you are also doing them a favor. No one likes to turn people away. Now, those advisors can provide a good recommendation for that prospect while also helping you to build your own pipeline of potential clients.

Network with Local Business Owners

In addition to connecting with advisors, look at business and entrepreneurial groups in your area that you can join. These could include organizations like:

•  BNI
• Your town or city’s chamber of commerce
• Rotary International
• LeTip
• Your college alumni services or groups (if you’re still in the area)

You can also run a Google search for “local networking groups” if your location services are turned on; Google will return results for your area if so. Look for niche groups as well, and search by specific keywords (e.g., “business women in [your area]”). If you don’t live in a big city, that’s okay. There are groups on Facebook and LinkedIn that you can become a part of and contribute to for the nearest metropolitan hub.

When integrating into an online group (or an in-person one, for that matter), a good strategy is to seek to add value first...and to contribute over and over again before you ever make an ask yourself.

In the meantime, if someone in the group specifically asks for a financial planner, you can speak up and perhaps share a link to your website. You don’t need to be pushy or salesy. Just provide your information and throw out an invite to contact you if they have any questions.

Once you’re integrated into the group, you can start making specific asks or promoting yourself in a more direct way. Perhaps you can share an event you want to host, or share links and articles you’ve written that are relevant and helpful to the group. Through networking in these communities, both online and offline, you can slowly build a referral system that thinks of you when they hear someone needs a financial planner.

Tap Your Existing Networks

They can’t make referrals to you unless they clearly understand what you do, who you do it for, and why. Here are a few ways to educate them:  

• Reach out directly and personally. Have a one-on-one conversation to talk about your business, your goals, and the kind of people with which you want to work. Provide a business card for them to hang on to in case they think of someone who might be interested in your services.
• Send out one email through a system like MailChimp. Make it short and sweet—share that your business is taking on new clients. Briefly describe the kind of person you want to work with, and conclude by thanking them for their time and help. Give them the option to be removed from future emails like this.

• Stay top of mind going forward by occasionally sharing your business social media updates on your personal networks, or by sending out a periodic email to say hello. Do not send emails to those who asked not to receive them, and try to avoid sending out impersonal mass emails.

In all these cases, you want to be open and honest, but not pushy. These are your friends, former coworkers, and family. Once they’re aware of what you do, you don’t need to bug them every other day with a Facebook message.

Attend Local Events for Businesses and Professionals

There’s rarely one silver bullet to landing clients. In other words, no one action or approach is likely to yield a stream of clients. Instead, build up your book of business over time and through several different activities. Establish your authority and credibility, both online and in person in your local area.

Do you want to start your own RIA and financial planning practice? It’s an excellent time to start out on your own in the industry. The majority of established advisors with existing RIAs are eyeing retirement, and there’s an influx of new, younger clients who want specialized service from the next generation of financial planners. Not to mention, new business models within the industry provide you with more options to create your own practice that you run your own way.

There’s a lot to think about and consider if you want to launch your own RIA, as well as plenty of details to get lost in. But to give you a high-level (and less overwhelming) overview, start with the biggest questions to answer and issues to address if you want to start your own financial planning firm.

Nail the Basics of Your Business Plan

You don’t need a 50-page plan in order to start your own practice. But you should consider how your business will operate in the real world before you jump into this big venture. You should be able to answer the following questions before moving forward with additional logistics and processes required to start your own RIA:

• What problem are you seeking to solve?
• What solution do you provide, and to whom?
• What makes you different from other financial planning firms?
• What kind of costs will it take to run your business?
• What will you do to earn revenue, and how much do you need to earn for the business to be viable?
• What challenges do you expect to overcome? You don’t necessarily need all the answers right now, but you should anticipate where you may run into trouble and consider a plan for avoiding potential pitfalls.

Consider Who You Want to Serve

You can start your own RIA with the end goal in mind: the clients you one day want to serve. If you open your firm without any idea who your services are for, you may lack clarity and focus.

A purely assets under management model, for example, may not work if your goal is to work with people under 50 who are in the middle of their careers and still working to build wealth. Your target client isn’t in a position to give you 1% of their small nest egg...and 1% of their assets won’t be profitable for you, either.

On the other hand, maybe you’re interested in working with clients who do have assets and want help with more complicated investment strategies. In this case, it makes little sense for you to charge them on an hourly basis. Your expertise is likely worth more than what clients will be willing to pay when the rate is positioned as a per-hour fee.

Choose your ideal client, consider their needs, think about what services you could provide for them, and figure out what they can both afford to pay and what they’re willing to pay. From there, you can choose a business model and pick the tools you need to deliver services in a way that makes sense for the particular client you want to work with. Don't forget to think about how you'll get referrals.

Determine Your Business and Revenue Model

There are three primary fee structures for RIAs:

• Assets under management (AUM): You charge a percentage of the clients’ assets that you manage for them. Financial planning services are often provided for free as an “add-on,” and investment management is the main focus.
• Hourly or project-based: You charge according to how much time you spend with each client and bill them for the hours you dedicate to working with them.
• Subscription: You charge a flat monthly fee in exchange for a defined scope of work delivered to the client. RIAs who charge on a subscription basis often focus on financial planning as the main service the client pays for. Many provide investment management as well, as a separate service with an AUM model fee.

There are pros and cons to each structure. Again, the right one for you will ultimately depend on the type of client you want to serve.

Get Through the Red Tape and Set Up Compliance

Compliance is one of the most complicated things you’ll deal with in creating your own RIA. Before you jump into that challenge, make sure you have:

• A company name.
• A decision on how you’ll run your company: will you be a sole proprietor, LLC, or corporation? Make sure you file appropriately depending on which path you want to take.
• A business checking account.
• A way to protect yourself and your business, like E&O insurance.

Next, you need a way to file the paperwork required to establish your RIA. You can do this one your own. But compliance is convoluted and can severely impact your business if you don’t follow the regulations and requirements, so consider hiring an RIA compliance company to work with you. They’ll help you create and file the required documents you need to be a legitimate financial planning firm. Use a company like CS2 Compliance, or Financial Planners Assistance to ensure this is done right the first time.

Will You Practice Virtually or Keep Office Space?

Today’s business models and client expectations, along with options for working virtually, make it simple and easy to start a virtual RIA. This means you don’t necessarily need to buy or rent physical office space. This helps a young RIA save on costs, as there’s no need for office furniture, a store of traditional office supplies, or additional bills like utilities for a new space.

You can meet with clients virtually through tools like Skype or Google Hangouts. You could meet clients in their homes, or even invite them to your own home if you have a comfortable home office space with enough room for clients to meet you there.

Another option is to rent office space as you need it through a company like Regus. You could also connect with your network and rent conference rooms or extra space for meetings from other professionals with established offices.

If you’re set on office space, consider renting from coworking spaces to make it easier to get started. These are cheaper alternatives to traditional standalone offices, and might be more financially feasible for your business as you launch. Many of these setups provide you with shared desk space with other members, but can provide access to private conference or meeting rooms as needed.

Choose Your Software and Tools

There are endless services and products you can buy or subscribe to that you need to run your RIA. Every firm's technology suite and back office tools will look a little different, but your practice needs solutions for basic software and hardware to run the business. Here’s the hardware to consider implementing to get you started (and we’ll assume you’re running lean or completely virtually, for the purposes of this article):

• Computer and a way to backup your devices and files along with a means to keep everything secure
• Scanner
• Cell phone
• PO box or UPS mailbox

For software, you’ll want to look into things like:

• Video meeting tools, like Skype, Google Hangouts, or Zoom.
• Cloud-based document storage, like Google Drive or Dropbox.
• A client relationship manager (CRM). Hubspot offers a free CRM, or you can use an industry-specific tool like Wealthbox.
• Online scheduling system, like ScheduleOnce or Calendly.
• A way to electronically sign documents, like Docusign or Hellosign.
• A bookkeeping software and a payment processing system.
• Achieving for your website, social media, and emails to stay compliant.
• Financial planning software to help you better serve clients.

Finally, you will need an online presence, which will require:

• A website itself (you can use a pre-built theme from a place like ThemeForest or hire a designer to create a customer site)
• Web hosting
• A domain name
• A content management system (CMS) like WordPress
• Email servers
• Social media strategy

There is certainly a lot to think about, but these are the fundamental areas you need to look into and create plans for if you want to start your own RIA. Once you have these pillars in place, you can start adding more details and getting specific with exactly how you’ll establish, run, and grow your own financial planning practice. 

Ever dreamed of starting an RIA because it meant you could finally run your own firm, your own way? Building your own business means a lot of freedom and flexibility. That freedom to create what you want applies not only to when and how you work, but also to who you work with, the services you offer, and the values you want to follow while serving your clients. There’s plenty of promise in the opportunity to live the life you want while teaching your clients to do the same. But being your own boss and running your own financial planning firm isn’t all sunshine and rainbows

You already know it takes a lot of hard work and long hours. It’s a big commitment, and you may need to hustle for months—even years—before you start seeing results. But there are other sides to being your own boss that you may not have thought about yet, including facing failure, realizing you need to change course, and facing the loneliness many experience when striking out on their own.

Entrepreneurship presents an amazing opportunity to be your own boss, sell solutions your way, and create something new in the industry. It’s a great path, but you should be aware of the potential pitfalls along the way before diving in headfirst. Consider the good, the bad, and even the ugly of running your own show as a new RIA owner.

The Good: You Get Full Ownership of Everything

There is no more senior advisor pushing you around and telling you how to do your job...no more firm owner failing to recognize your brilliance and not letting you implement your innovative planning ideas. You’re on your own, baby!

This is your opportunity to build the business as you think it should look and run. You get to design everything, from the back office setup to the client experience and planning process. You choose your ideal target market, the clients you accept to work with, and the services you deliver to them. You get to make the decisions and create everything from scratch, as you believe it should be. All the decisions, big and small, come down to you.

The Bad: You Get Full Ownership of Everything

This is a double-edged sword for financial planning firm owners, because all the decisions, big and small, come down to you. There’s no one else who is going to tell you what to do. In contrast, there’s also no one else to blame when things go wrong or you make a mistake. All the decisions come down to you...and so does all the responsibility.

That can feel overwhelming and scary, but you don’t need to work in a vacuum. When you work as your own boss, you need to look for different kinds of support systems and guidance, including things like:

• Joining professional associations or communities of fellow business owners.
• Creating or joining a mastermind group.
• Getting a business mentor to provide guidance.
• Hiring a business coach to help give you advice.
• Brushing up on marketing techniques, such as referral marketing and social media.

The Ugly: The Challenges Included in Scaling Up

Of course, you probably won’t be on your own forever. If your firm succeeds, you’ll reach a point where you need to make hires to help you. The tough part is making the leap to bringing on help for the first time. You’ll likely run into this “chicken and the egg” scenario: you need to hire help in order to manage your workload and continue to grow…but you also don’t feel like you have quite enough revenue to make a hire yet. It’s easy to get stuck in this trap. After all, you’ve spent all of your time up until this point growing your revenue and becoming profitable; to take a step back in what you net may feel like an impossibility.

Plus, there are other challenges to address. Before, when it was just you, you didn’t have to teach anyone how to perform tasks. So you may not have built systems or processes yet—both of which are critical if you want to build a team of more than just one. Not to mention, as the boss, you’re the one responsible for finding and hiring the right person to help you. And you bear the responsibility if you don’t make a good hire.

Needless to say, figuring out how to scale your business when acting as your own boss can get ugly fast. One potential solution is to start small with baby steps: hire a part-time paraplanner instead of a full-time employee. Or work with contractors to outsource specialized tasks to buy some of your time back while still growing your revenue.

The Good: You Enjoy Freedom in When and Where You Work

The idea of “location independence” has become extremely popular in the last few years, and for good reason. It means you’re not locked into an office and can work when and where you want. For financial planners, this is a big benefit to clients as well. When you can work virtually anywhere and anytime, that gives them the flexibility to meet with you anywhere, anytime.

This is great for families who move often—you can still be their financial planner even if they move across the country, because you’re already setting your own meeting schedule and can use video chats to conduct meetings. The same applies to freelancers or other business owners who choose to be their own bosses. It gives them the freedom and flexibility to choose their own hours and work locations. This doesn’t mean you have to work virtually or untraditional hours. It just means it’s your choice, and that’s one of the best parts of being your own boss!

Do you want to set up a small office and serve your local community? Do you want to work weekends so you can enjoy quiet Mondays and Tuesdays at home? Prefer to run a virtual practice and do the bulk of your work at night once your afternoon and client meetings wrap up? Or do you like to work early in the morning and free up your afternoons? These are the choices you can make...so go for it!

The Bad: No Work, No Money

One of the tradeoffs for all the freedom and flexibility in your time and location is that as your own boss, there are no vacation days or paid time off. When you start your own RIA, and it’s just you, your business doesn’t work unless you do.

For the first year or two, you may not think too much of that. Your business is like your new baby, and you’re happy to pour your time and energy into it. In fact, many new entrepreneurs feel like work becomes more of a hobby. It is different than sitting at your desk in someone else’s office, working in someone else’s business. But when you start getting into year 3 or 4 of no vacations, no sick days, no “playing hooky” days…that “freedom” can start looking a whole lot more like a ball and chain.

The Ugly: It’s Lonely Out There When It’s Just You and Your Business

As your own boss, who is responsible for everything, you carry a heavy burden. And you may look around and see that there’s no one else around to help you. This is especially true if you seek to start a new or novel type of business. If you’re a pioneer in your field, you lead the way and the rest follow. But as they say, it’s lonely at the top.

You might miss out on the normal networks and connections you relied on as an employee with bosses and coworkers. You no longer work for a company that might provide access to events, professional development, and more.

You may literally be alone during your workdays before you hire someone to help you (and this is especially true if you work virtually). The loneliness can seep into your personal life, too, if your business requires a lot of your time and energy. You may struggle to make room for your family, friends, social activities, and time away from work.

Determine if Your Good Outweighs the Potentially Bad and Ugly

Nothing in this article is meant to discourage or dissuade you from starting an RIA on your own. But it is important to understand the realities of being your own boss. It might help to write out a simple pros and cons list to help you gain clarity on the good and the bad (or just downright ugly). Here’s what this might look like:

If you decide the potential pitfalls that come with firm ownership are worth it, and you’re willing to deal with them as they come up, go for it. The same determination and dedication that led you to open your financial planning practice will serve as an asset when you deal with any problems or challenges you face along the way. You can certainly succeed as your own boss!