How to Become an Independent Financial Consultant

Ten steps for growing a financial-advisory business through Customplan

1. Find a sponsor

Anyone who works in the Canadian securities business must find a financial firm to act as his or her sponsor. This may be easier said than done. “We’re one of the only firms in the industry that will take on ‘green’ people,” says Karl Krokosinski, president and CEO of Customplan Financial Advisors Inc.

2. Get licensed

If you want to sell securities in Canada, you must be licensed. Each license generally requires a course of study followed by a rigorous exam. For example, individuals who want to sell life insurance must enroll in the Life License Qualification Program, and individuals who want to sell securities (such as stocks, bonds, and mutual funds) must enroll in the Canadian Securities Course. A third possible license is the exempt securities license, which allows the sale of alternative financial products. Some advisors may also obtain the Chartered Financial Planner designation. Customplan Financial Advisors has classes in-house to help advisors prepare for all these exams.

3. Find a supervisor

British Columbia has a two-year supervision requirement for new advisors. “That means an experienced advisor has to take on a junior advisor for that period and be responsible for all of his or her actions,” says Krokosinski, whose firm has 10 such senior advisors. “It’s a lot more than a mentorship; it’s training someone to do the job correctly.”

4. Educate yourself

Financial advisors next go through a training program to ensure that they understand the products a financial advisor sells. That training is tailored to each individual. “Someone who has been in the business world for 50 years has different knowledge than someone who’s just out of college, and they have to be trained differently,” says Krokosinski, adding that it takes about three years for an advisor to go through Customplan Financial Advisors’ entire training program.

5. Analyze your ROI

When it’s time to sell, most people in the industry generally think the first step is determining a target market, but that’s incorrect, according to Krokosinski. “The first thing you need to do is determine return on investment,” he explains. “What are your responsibilities? What are the industry’s responsibilities? What will determine if you’re doing a good job? Is it sales? Is it how much people like you?”

6. Find your market

Building a client base isn’t easy, Krokosinski says, but it isn’t hard, either. “A local woman who recently started with us asked me how to find clients, and I in turn asked her what she spends her time doing,” he recalls. “Are you in any clubs, like Rotary? Are you involved in any philanthropies, like United Way? If so, you know a lot of people, and you can let them know who you are and what you’re doing, maybe by sending a letter.” He also suggests advisors take the top 25 people in their life and ask them how they would build a practice. “In this woman’s case,” Krokosinski says, “24 of the 25 asked her to be their financial advisor.”

7. Market, market, market

“We don’t teach people to cold-call, because we don’t do it,” Krokosinski says. “I also don’t like referrals because it’s no more than a name someone gave you. When you phone a referral, it’s like a warm cold call.” Instead, when someone gives Krokosinski a referral, he asks him or her to set up a meeting with all of them together. “That creates favourable face-to-face introduction,” he says.

8. Avoid asking for a sale

When it comes to selling, Krokosinski stands firmly by one piece of advice: “Never ask someone to buy something.” Most sales organizations, he notes, will tell you to ask for a sale multiple times. “That’s what a policy peddler does, not what a financial advisor does,” Krokosinski says. “We give people choices, educate them as to what the products do, then let them ask us if we can handle it for them.”

9. Partner with others, if necessary

Although financial advisors work independently to build their own books of business,
Customplan Financial Advisors fosters a collaborative environment. “A client of a junior financial advisor came in last week wanting his portfolio restructured and his estate taken care of, so we had one person handle each,” Krokosinski says. “The client also has a big company, so we pulled in our employee benefits and pension divisions to meet with him.”

10. Keep learning

The financial-services industry is in a constant state of transformation, with regulations changing and products coming and going. “We have classes every Monday and Wednesday—about financial products, about marketing, about anything you need to build a successful business,” Krokosinski says.