Startup Costs For Financial Advisors – What To Expect

Becoming a financial advisor isn’t for the faint of heart. But for those with an entrepreneurial spirit, this career provides the opportunity to run a planning practice as a business owner. 

Consolidated Planning uses a time-tested planning process and provides the resources necessary to launch a successful financial planning career. The goal at Consolidated Planning is to help new financial advisors earn over $250,000 annually by their fifth year in business. 

In this article, we’ll discuss the various expenses you can expect to incur as a new financial planner and how Consolidated Planning helps to offset those expenses.   

 

What Licenses Do Financial Advisors Need? 

Like most businesses, there are startup costs to become a financial advisor. But, unlike most businesses, the start up costs to become an advisor are comparatively low and accessible to many.

The first step toward becoming a financial advisor is to obtain the proper licenses. To run a consultative planning practice, advisors will need to secure both insurance and securities licenses. 

 

Insurance Licensing

Each state’s Department of Insurance (DOI) sets the requirements for insurance licensing. Some states require one exam (Life, Accident, Health) and others require two separate exams (Life & Accident/Health). 

Some states, such as North Carolina for example, also require a minimum number of documented study hours to qualify for scheduling the exams. Most states will also require additional fingerprinting and background checks. 

Initial expenses for licensing include:

• Study materials
• Exam fees
• Application fees
• State registration fees, and
• Fingerprinting

These expenses may range between $200-$400. At Consolidated Planning, once a candidate has passed the exams, onboarded, and contracted as a Financial Representative, these expenses are reimbursed. A new program, launched in Spring 2025, also provides pre-licensing study materials at no cost. 

 

Securities Licensing 

To be properly licensed to conduct both brokerage AND advisory investment business, three exams must be passed, and state registrations must be secured. 

Securities licensing begins with a prerequisite exam called the Securities Industry Essentials (SIE). This exam is an introductory-level exam that assesses a candidate’s knowledge of the securities industry. It’s offered by the Financial Industry Regulatory Authority (FINRA).   

Candidates must be sponsored by a broker/dealer to take the next two exams; the Series 7 (General Securities Representative Exam) and the Series 66 (Uniform Combined State Law Exam). Both exams are administered by FINRA. 

Advisors who are fully licensed (SIE, Series 7, Series 66) earn the title of Financial Advisor and can conduct fee-based planning which is quickly becoming the standard at many firms. 

Initial expenses for licensing include:

• Study materials
• Exam fees
• State registration fees
• E&O insurance, and
• Fingerprinting

These expenses may range between $900 – $1400. At Consolidated Planning, once a candidate has passed the exams and reached minimum production, many of these expenses are reimbursed. A new program, launched in Spring 2025, also provides pre-licensing study materials at no cost. 

 

What Tools Do Financial Advisors Use? 

Using numerous tools vastly impacts your day-to-day life as a financial advisor. Some are essential to doing business, while others are just to make life easier. And when you’re getting your career started, you’ll want to make your processes as easy as possible. From day one. Just like anything worth having, there is almost always a cost associated.

 

Financial Planning Software 

As an advisor, you’ll use financial planning software to do the work you do for clients. You’ll use it to aggregate client data, make projections, and track progress toward goals. To a comprehensive planning advisor, there is no more valuable tool than their financial planning software.

Consolidated Planning’s proprietary planning software, called ‘The Living Balance Sheet’, is provided at no charge for the first six months. There are also opportunities for additional free months by achieving set production goals. Following the complimentary months, monthly fees begin at $100/month and increase over time with a maximum fee of $300/month in year 3.

This tool has been built out in alignment with our unique planning philosophy and focuses on growing your practice in a few ways:

• Diversifying your business
• Creating a story around cash flow, and
• Establishing an enhanced customer experience for more introductions

 

Other Technology 

To conduct business in a compliant manner, advisors at Consolidated Planning utilize specific technology and avoid others. For example, Zoom is used for virtual meetings, and Hearsay is used for texting. Technology and compliance services are provided to ensure that regulations and standards are met. Technology fees range between $30-$150 per month. 

 

Other Costs  

Financial advisors are required to have errors and omissions insurance. E&O insurance protects against financial losses if you make a mistake or someone sues you. This type of insurance is also known as professional liability insurance. Consolidated Planning advisors have access to E&O insurance at a negotiated rate currently around $70/month for base level coverage.

Of course, this list of startup costs is not entirely exhaustive, other expenses may apply.

 

Is Financial Planning the Right Investment for Your Career? 

Determining the next step in your career is a big decision. Especially when there are inevitably costs associated with it. So, now you need to determine:

Is the cost worth it?

Is becoming a financial advisor a good investment for you?

That depends.

If you want the responsibility of being a business owner with a little upfront capital, then becoming a financial advisor and running a practice might be just what you’re looking for.

To learn more about what to expect as an advisor, chat with a team member about what your first year at CP might look like.

 

 

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Exp. 3/2027