Financial Services Industry
Outlook and Trends


Across all age groups, 68 percent of Americans surveyed in a Harris poll for Northwestern Mutual said they did not have a trusted advisor who offered comprehensive lifetime planning. In addition, 45 percent of those surveyed said they do not know how to get the help they need as they move through life stages and their financial needs change. These statistics position the majority of Americans as potential new clients for the financial services industry.

Changing demographics are likely to affect the financial services industry based on factors affecting the largest U.S. demographic groups that include:

  • Baby boomers are entering retirement at the rate of 10,000 per day, creating an ongoing, growing demand for retirement planning services, according to a report by Investment News.
  • The oldest baby boomers have reached the age of 70.5 years, the age at which they must start taking minimum distributions from their retirement accounts and make decisions regarding the best options for this new source of cash flow.
  • As baby boomers pass away, individuals classified as generation X and millennials are expected to gain control of more than half of all investable assets by 2020, valued at $30 trillion, according to a report by PriceWaterhouseCoopers (PwC).
  • Maturation of millennials, who bypassed baby boomers in 2015 as the largest generation, means these individuals are becoming first-time buyers of health, home, auto and life insurance, as well as retirement planning as they reach financial independence and secure full-time jobs, purchase homes, marry and begin families.
  • Women are more likely to live six to eight years longer than their male spouses, creating a longer need for financial advice geared to their needs.

You can find a financial service franchise that may work for you by searching Franchise Opportunities' Financial Services Franchises category.

Growth Potential

Industry analysts predict that the financial services industry is positioned for change. Factors including the increased use of mobile financial management and online tools ultimately will produce adaptations to appeal to the preferences of millennials as they achieve financial independence and seek out these services. However, the use of online and electronic tools doesn't necessarily substitute for the advice and expertise of trained and licensed professionals. While 86 percent of tax returns were filed via tax software in 2016, 60 percent of those e-returns were submitted by accountants and other tax preparers, according to a report by USA Today.

Businesses in the financial services industry also are likely to find growth opportunities by catering to the demands of other new and growing client markets. Some of the most lucrative growth opportunities may emerge from clients seeking advisors who have specialized knowledge or services related to the fact that:

  • During intergenerational transfers of wealth, PwC reports that about 50 percent of heirs change financial advisors.
  • About 44.2 percent of millennials identify themselves as part of a minority race or ethnic group, according to the U.S. Census Bureau.
  • About 70 percent of widows change financial advisors upon receiving an inheritance from their husband's death.
  • According to the Harvard Joint Center for Housing Studies, the number of millennial households is expected to increase from 16 million in 2015 to 40 million in 2025, increasing demand for real estate related financial services.

Commercial opportunities also are likely to increase for financial services industry businesses. In 2015, alternative small business lenders generated $5 billion in loans and represented a 4.3 percent share of the small business lending market, according to a report by Business Insider. By 2020, these lenders are expected to hold $52 billion in loans and increase their market share of business to 20.7. Research by Intuit forecast a growth in the number of U.S. small businesses, with increases from 30 million in 2016 to over 42 million in 2026, indicating a strong market for lending, as well as other financial services geared to small business needs.

Common Business Models for Financial Services Franchises

Financial services industry businesses include a wide range of models. Some specialize in a specific type of service; others offer clients a one-stop shop for all their needs. In general, the industry is positioned to grow steadily. As unemployment declines, more individuals are likely to pursue investments, retirement planning and real estate purchases, all of which involve the services of financial professionals.

The financial services industry is expected to sustain steady increases for the foreseeable future. In 2016, financial advisory firms reported a median of 13 percent growth in assets and 6.7 percent increase in revenue, according to a report by TD Ameritrade Institutional. Industry analysts at IBISWorld forecast continued growth through 2022, as markets continue to improve.

Other financial services also are expected to fare well. The professional accounting market had a growth rate of 5.9 percent between 2012 to 2016, and has increases of 6.2 percent forecast from 2016 to 2020, according to The Business Research Company. In an industry survey by LIMRA, 34 percent of Americans said they were "at least somewhat likely" to purchase life insurance in the coming year, indicating continued interest in this significant product sector.

Some of the most common business models in the financial services industry include:

  • Billing Management: Franchises such as Claim-Tek Systems and American Business Systems LLC provide medical billing, electronic claims processing and other management services to healthcare providers. New coding requirements, rising costs and declining profits make it increasingly practical for healthcare providers to outsource medical billing.
  • Business Consulting: Franchises such as Blue Coast Savings Consultants and Valcor Worldwide Financial Consulting specialize in working with businesses to help their owners reach full potential and improve revenue. With steady increases of U.S. small businesses anticipated, the franchises have unlimited growth opportunities.
  • Financial Education: Franchises including Online Training Academy and Real Estate Sales LLC provide financial advising and mentoring services to individuals interested in pursing trading or real estate investments. These franchises cater to individuals who want to conduct their own transactions, though are willing to invest in preparation and education to succeed.
  • Insurance: Franchises such as AllState or Farmers Insurance provide agents with the backing of a respected national insurer when offering clients a range of insurance coverage. Agents often establish long-term relationships, serving both commercial and consumer clients as their needs for coverage related to health, auto, real estate and life insurance coverage change over time.
  • Lending: Franchises such as Lendio and Vernon Street Capital help small-to-medium-size businesses and individuals identify and qualify for funding to help them accomplish residential or commercial real estate purchases or business growth. Platforms vary from franchises that act as lending brokers to those that originate the funding themselves.
  • Real Estate Management: Franchises such as Rentals America and All County Property Management specialize in managing investment properties in the growing rental market that represents more than one-third of real estate purchases. Of the homes sold in the United States in 2016, 37 percent were purchased for investment purposes, according to a report by
  • Tax Preparation: Franchises including Liberty Tax Service and H&R Block primarily prepare tax forms but also can offer other financial services to ensure steady, year-round revenue streams. While many do-it-yourself options are available, USA Today reported that about half of individuals filing taxes rely on professionals to assist with tax preparation to save time and ensure accuracy.

Financial Matters

It's possible to purchase a financial services industry business for a cash requirement as low as $20,000, though options exist at all investment levels. Since many financial service businesses can be operated as home-based businesses, you also can save on the costs of renting and maintaining a physical location. Similar to all franchises, your initial costs are likely to include a franchise entry fee and ongoing fees for royalties and advertising. Costs for specialized training, proprietary software, mobile apps or other supplemental support vary by franchise.

As the owner of a financial service business, other financial considerations include:

  • Ongoing education for you and/or your employees to maintain professional certifications or licenses necessary to provide some types of financial services
  • Renewing or upgrading software or other materials to keep abreast of changing regulations and guidelines in the industry

However, you may realize cost savings with a financial service business due to:

  • Group discounts negotiated by your franchisor that reduce the cost of products and services used across the franchise
  • Eligibility for tax deductions of a home office if it is used exclusively for your business, subject to IRS conditions at the time of your tax filing

In addition, you may find it easier to secure financing to start your financial services business since your money is supported by a proven business plan. This association may mean that you present less risk to wary lenders. In some cases, franchisors may assist in financing your loan or helping to negotiate a loan.


Purchasing a financial services industry business is an opportunity to reduce your investment risk by using a proven business plan. Your association with a successful franchise brand presents your new business with a solid reputation from the start. As a franchisee, you're offering clients a consistent service with the backing of the established franchise organization. Even if potential clients aren't familiar with your franchise, a franchise typically conveys credibility versus an unknown independent contractor.

Franchise ownership also can be a lucrative option for expansion if you have an existing financial services business. Franchising your current business can help you achieve growth quickly with less time and effort than may be required if you pursue expansion on your own. Combining your success with a national or regional industry leader can help your business grow more quickly than trying to expand while also maintaining the status quo with your current clients.

As part of a franchise partnership, your franchisor can provide the support you need to remain competitive and profitable. Your corporate franchise team has the experience and expertise to help you avoid mistakes and recognize opportunities while using the franchise plan. They often are valuable resources for advice regarding areas such as marketing, hiring and franchise management. Your network of fellow franchisees also can offer support and suggest solutions to some of the challenges you encounter at startup and through the life of your franchise.

Important Considerations

The financial services industry includes a wide range of business models. While you'll have the backing of your franchisor's reputation, it's up to you as the local business owner to make the best of that advantage. A franchisor's reputation will help you establish your business as reputable, but you'll have to maintain that status with consistent professionalism. In an industry where you're privy to the intimate financial details of individuals and businesses, it's important that your clients are confident in the ability of you and your employees to maintain confidentiality and act in their best interests in all actions.

With so much at stake in services such as tax preparation, asset management or insurance, it's critical that you hire employees who you are confident can maintain the standards set by both you and your franchise. There can't be too much emphasis on getting the details right the first time. The need to stay current and on trend with new financial products and regulations will allow you to give your clients the best possible service. However, you'll have to balance that with servicing your current client base.

Of course, your reputation as an individual franchise ultimately will make or break your success. With a trustworthy reputation, you'll have satisfied clients eager to share their experiences. It's important to encourage referrals to maintain a steady flow of new clients to grow your business. According to a Nielsen survey, 92 percent of consumers trust referrals from people they know and people are four times more likely to make a purchase when referred by a friend.

However, when mistakes occur, even if it's at another location in your franchise, you'll have work to right possible repercussions of guilt by association. Being prepared with a program of proactive intervention, and seeking the support of your franchise experts, can help you salvage your own solid reputation, which is critical in the field of financial services. Keeping tabs on social media can help you identify and rectify potentially damaging situations before they get out of control.

Characteristics for Success: Who Should Consider a Financial Service Franchise?

Franchise ownership in the financial services industry offers a wide range of opportunities, from full-service consulting to specialized tax preparation. Successful franchise owners are prepared for the unique demands and challenges of this industry. As the owner of a financial services franchise, you'll be more likely to reach your professional and personal goals if you possess the following strengths and skills:

  • You have the necessary credentials or are willing to earn them. Without an understanding of the financial services you're offering, it's difficult to provide the best service for your clients.
  • You can establish and maintain confidentiality protocols to protect your clients' information. You'll be responsible and liable for ensuring that the information you collect isn't shared or used in the wrong way.
  • You can convey professionalism and trustworthiness both in person and via electronic communication. It's important that clients are comfortable trusting your recommendations and decisions regarding their livelihood and their future if you're to sustain long-term lucrative relationships.
  • You're willing to stay abreast of changing financial regulations and codes. Though time-consuming, it's important that you do your best to have as much current knowledge as possible to serve your clients well.
  • You can identify and retain honest and discrete employees. You should be confident that your employees will value your clients' information as carefully as you do.
  • You're willing to go above and beyond the norm when serving your clients. Keeping your clients satisfied can help you secure a constant source of new clients via valuable referrals.
  • You can network effectively to encourage professional references. Some of your most consistent referrals may come from other business professionals who trust that you'll treat their clients right.
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