Introduction
Currently, a lot of people are struggling with the management and planning of their finances. As a result, the impacts to these people tend to be mainly negative and significant as poor financial planning and management contribute to the use of more finances, which is a major risk. Besides individuals, some organizations also have a poor plan for their financial management, which puts them at high risk and, in some cases, fails. As a result, most people and organizations depend mainly on financial advisors to provide a financial plan that will be effective and reliable in supporting their specific needs and desires.
Part One: Gather Information
With the increasing demand for financial planning services, starting a business doe provide more opportunities and a reliable way for good income. This case means the success of starting this business is mainly high, and the business is more likely to succeed and grow effectively over the short term.
Some of the most important questions to consider in starting this business include;
What specific requirements are required for one to become a financial adviser?
A bachelor’s degree, particularly in statistics, business, finance, economies, and other similar fields, will be required to start an organization offering financial advisory services.
- Will the financial advisor consider becoming a generalist or focus on specializing in one of the several areas?
- The business can either decide to do general financial advising services or one of the areas. These areas can include retirement, risk management, estate planning, taxes, and insurance.
- What are the possible and major risks and opportunities related to starting a business offering financial advisory services?
Opportunities
The demand for financial advice services is significantly high and continues to increase, which provides more opportunities for the organization.
The competition is not very high, which is important for new entry business in the industry.
Risk
Although competition is low, other large organizations in the industry pose a significant risk in the performance and success of the organization.
Part Two: Recommendations
To ensure effectiveness and positive outcome in tax saving, the organization can consider and involve itself in paying more attention to the tax-loss harvesting process. This process will focus on selling specific investments within the organization, particularly those that will lose value, and most importantly, replacing them with similar investments that are more reasonable. As a result, the organization can use the investment sold at a loss in offsetting any realized gain, thus ensuring effectiveness in saving more taxes. However, tax-loss harvesting will only apply mainly to the taxable investment of the organization. This strategy will be a useful part of the overall financial planning of the organization and, most importantly, investment strategy. As a result, it can be seen as a tactic for the organization towards ensuring effectiveness and positive outcomes in its financial goals.
Compliance is important for the business. Compliance, in this case, will include holding onto different files related to the organization’s transactions, specific policies, bylaws, and procedures related to this industry. Besides, keeping records of all contracts ad licenses will be critical in ensuring effective and positive outcomes in the organization’s general performance. Other important compliance measures will include the provision of stocks to shareholders if the organization has any is important. Recording all stock transfers will also be effective in the organization’s general manager. The organization will also need a board of directors to help manage its operations, thus ensuring positive performance and, most importantly, increased productivity.
Eight major types of documentation will be required in this case. These documentations include a business plan, partnership agreement, buy/sell agreement, employee agreement, employee handbook, non-disclosure agreement, and most importantly, a non-compete agreement. Having these documentations place the business in place as the organization starts to ensure effectiveness in preventing different issues and improving the performance of the organization. The goal is to promote the performance and productivity of the organization by influencing positive performance and management of different processes and activities that the organization will be involved in general.
As a new and small organization, managing financial books would not require a lot of capital. However, it can be difficult to know if the organization’s accounting costs are on track, which will require the organization to invest in the accounting workload. In accounting workload, a fee of between $1,000 to 5,000.
The business will require at least a minimum of $100 in consideration to investible assets. Although the minimum asset threshold of starting the business is $100,000, having more than $500,000 which have more and positive impacts on the organization. Having less than $100,000 in assets may not be worth for the business, and more finance helps to ensure effectiveness and positive outcomes in the ability of the organization to find more opportunities which are important in the general performance and success of the organization. More finance can be seen as an important tool that will ensure effectiveness in stimulating and, most importantly, helping the organization to be successful in mitigating possible risks.
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