Knowing what not to do is as vital as gaining information on things to do to run a successful enterprise. Here are some mistakes that you can avoid to run a profitable and hassle-free business as an independent personal financial planner.

1. Earning without Learning

This is one of the most common fallacies committed by overenthusiastic financial wizards. A mere interest and aptitude in economics and financial planning is not enough for making a professional foray into this cutting-edge domain.

It is imperative to acquire hands-on knowledge about:

• the various investment options
• laws related to finance
• insurance policies 
• stocks and mutual funds
• functioning of the share market
• property investment avenues for enhanced short term and long term profits
• retirements policies 

2. Investing Heavily in the Initial Stages

Another oversight potential financial planners commit in their eagerness to start the venture on a grand scale is to spend on lavish premises to meet clients, hire help and spruce up the infrastructure to sport an unnecessarily opulent look. While it is a very good idea to have a professional set-up, overspending in the initial stages of the business without building a dependable client base is not the shrewdest business strategy for a financial planner.

The ideal way to start is to focus on building loyal clients and offering great value adding services, while upgrading your knowledge through informative seminars and events, and then eventually expanding to a more sophisticated set-up. Core knowledge and expertise is more essential than a slick office and added frills.

3. Lack of an Effective Networking and Marketing Strategy

One of the most critical parameters of your success as a personal financial planner is to build a bank of loyal customers who trust your recommendations and seek your advice for planning their finances. Lack of a coherent, organized and multifaceted marketing strategy can kill your business even before it takes off. It is important to devise shrewd marketing tactics, and network within your business and social circle (and even outside it).

A lot of supposed experts believe that if their work is good, they should have clients clamoring to them and not the other way round. However, the truth is that most successful personal financial planners seek their customers aggressively by going out there and asking for references and recommendations. Once your credibility is established, you can expect clients to seek your services proactively based on favorable client testimonials.

4. Lack of a Diversification Strategy

In the cutting edge and highly competitive world of financial planning, where trends change by the minute, it is absolutely pragmatic to diversify and offer allied financial services to cash in on your credibility and offer more value to your customers and increase your financial rewards. You can also get the same customers to pick up different products from you and increase your customer base by offering a bouquet of financial services (like life insurance and tax planning).

Avoiding a few crucial mistakes can go a long way in helping you forge a strong financial planning enterprise that leads to satisfied customers and productive knowledge of the money market.