Working Out of a Home Office As a Financial Planner?

[padthaiforlunch]

Many executive suites are in class A space. Some will let you rent offices and conferences by the hour ($30 in my neck of the woods).

Some of these suites will let you go virtual -- you pay $75/mo. and you get a mailbox. You use the address on your card. If a client drops by, the receptionist will say you are out of the office and take a message.

 

[bluemarlin08]

Office space is priced very reasonable, check around, especially look for subleases from failed businesses. I have a home office and a regular office, work about half and half, had clients come to my home, although rare, most all meetings at regular office, especially with higher net worth clients. Perception supercedes reality in the beginning.

 

[LGilmore]

So if the issue is preception and the client asks you about your "office" while you're in a $30 an hour rent a room, what do you tell them? Or do you hope they're stupid?

I had an office for 19 of my 20 years in this business. I moved my office home last year.... Here's the simplest words I use when this comes up with a client. "OVERHEAD Sucks." So far, they all nod and smile, because overhead does indeed suck. They know it from their own business. I then tell them why I made the move. Am I a smart FP if I pay high square footage costs to impress a client? What happens when the client figures out who really is paying for the footage?

As winter said, you may lose somebody cause they want a guy in a tie. I would be more concerned about trust with my clients. If I am doing all these "things" to appear to be something I'm not, to basically fool them, What else am I doing? The reason people move their funds is they stop "trusting" their advisor, not because his desk isn't big enough or because it's brown cherry instead of oak.

Treat em like you would want to be treated.

 

[bluemarlin08]

I think the rent an office is misleading, LGilmore is right the client will see through the ruse. I tell my clients I work alot from home but go to the office usually between 10 and 2. Fortunately, my overhead is very low.

 

[sman]

I'm with LGilmore. I've done it both ways (office and home office that is), and quite frankly, I prefer working from home. I use the same terminology as LGilmore. I got tired of spending $2k+ a month on overhead. Especially when half of my time was spent meeting with clients away from the office.

Honesty goes a long way. People want authenticity. If I don't get an account because the potential client has some hang up about where my office is, then I really don't care to have them as a client.

 

[LGilmore]

"I got tired of spending $2k+ a month on overhead."

ditto.

My defining momment was driving back from dropping my youngest at college. During the five hour drive back, when not missing my kids, I started doing what all financial folks do, I started counting my savings...

The first one I came up with? Milk. With both kids gone, $55 a month less in milk purchases.... My first savings....

The next morning I walk into my office and there's a note under the door. It's a notice of a rent increase and month to month contract instead of the usual 3-5 year deal... Guess how much the increase was????

I saw it as a sign from above to review my situation and expenses. Where was I spending money and were those purchases "really" having an impact on my sales?

I began to look for a new office and simply felt the landlords in my area were huffing glue with the footage prices they were asking.

The other benefit of this switch was it began to move me more into the modern side of this business. I didn't need an extra office to hold papers because I could store the information found in 6 file cabinets in a textbook sized HD that could upon request, pull up information immediately. I also began to look at different ways to market because of this move.

So far, so good.

 

[djs]

You could always add the line:

"Since I work from home, you know where I live. I have to do a better job, or you really know where to find me!"

I've used that a few times, clients get a chuckle out of it, not everyone will appreciate it though...

Dan

 

[sman]

"I got tired of spending $2k+ a month on overhead."

ditto.

My defining momment was driving back from dropping my youngest at college. During the five hour drive back, when not missing my kids, I started doing what all financial folks do, I started counting my savings...

The first one I came up with? Milk. With both kids gone, $55 a month less in milk purchases.... My first savings....

The next morning I walk into my office and there's a note under the door. It's a notice of a rent increase and month to month contract instead of the usual 3-5 year deal... Guess how much the increase was????

I saw it as a sign from above to review my situation and expenses. Where was I spending money and were those purchases "really" having an impact on my sales?

I began to look for a new office and simply felt the landlords in my area were huffing glue with the footage prices they were asking.

The other benefit of this switch was it began to move me more into the modern side of this business. I didn't need an extra office to hold papers because I could store the information found in 6 file cabinets in a textbook sized HD that could upon request, pull up information immediately. I also began to look at different ways to market because of this move.

So far, so good.

Yep, I have a soon to be 19 year old son who commutes to college and drinks a TON of milk (he works out and drinks 9 million protein drinks a day which require milk). Not that I'm wishing my children would grow up and move out anytime soon, but man will I have a lot of money when they do.

I really don't have a problem letting people know my office is in my home. I think if the rep "thinks" people will have a problem with it, then his/her response to the question, "Where is your office?" is a smattering of insecure and unsure remarks. If you are ok with it, then your answer is usually enough because it will be a confident response to that question.

I completely understand the original posters concerns. We've been told we have to present an image to the potential client. Most of my business comes by referral these days and I really can't remember ever having a problem with a potential client because I didn't have a retail office space. And maybe that's because I don't deal with a huge amount of high net worth clients. I have some, but they have never expressed any concern. They are pleased with the service and advice I provide. And when it's a managed account, I can charge less and still be as profitable as when I had a retail office space. I just find life is much simpler working from my home.

Just goes to show that we can all make a living doing it different than the next guy.

 

[Larry Tew]

I wanted to bump this thread to get some of the current member's opinions. I know some of you are doing most of your selling on the phone and do not need a physical office presence. But for those of you who are doing more of a "planning" type business face to face, one client at a time, I want your thoughts.

The big issue is not where you do your number crunching or phoning, etc. It's where you physically see your prospects and clients. What are the advantages / disadvantages of meeting clients in your office versus taking your show to them. Again, this is more for the life / planning guys, but all opinions are welcome.

 

[sman]

I've done it both ways Larry and I can't say there is a huge difference. I guess the one downside I can think of is when I had a client in my office and we were discussing something and a thought came to my mind about showing them a piece of literature, I'd just run to where I kept everything and grab it and come back into my office and present it. It's a little harder to do that now.

I'm sure there are going to be those potential clients who think less of me because I don't have an official office space. If that's the case, then I probably don't need them as clients.

I generally meet my investment clients/prospects at their home or place of business. In the 8 years since I closed my office I can't think of a time where it has been a problem. But again, I'm no big hitter on the investment/planning side. If I had to live off of just the investment income, I wouldn't be doing a lot of extra curricular stuff. I could pay the bills, but that's about it. However, in the planning process other business is uncovered and that's what puts me over the top as far as enough income.

I guess the real question a person needs to answer for themselves is whether or not an office space will generate an extra $20k-$30k per year in revenue because that's what it's going to cost. Not to mention the up front expense of getting the office set up with furniture, decorations, copier, phone system, etc.

I wanted to bump this thread to get some of the current member's opinions. I know some of you are doing most of your selling on the phone and do not need a physical office presence. But for those of you who are doing more of a "planning" type business face to face, one client at a time, I want your thoughts.

The big issue is not where you do your number crunching or phoning, etc. It's where you physically see your prospects and clients. What are the advantages / disadvantages of meeting clients in your office versus taking your show to them. Again, this is more for the life / planning guys, but all opinions are welcome.