[For those interested in IFA] How to start an IFA business as a corporation? An overview of the revenue model

In recent years, there has been growing attention toward IFAs (Independent Financial Advisors).

IFAs, who provide asset formation support from a neutral standpoint without going through securities companies, are a promising option for businesses aiming to provide "customer-first" services.

In this article, for those interested in developing a business as an IFA, we will answer the following questions.

✅ How can you enter the IFA business?
✅ What types of revenue models exist for IFA corporations?
✅ Is it possible to run it alongside other businesses? What are the success stories?
✅ What makes growing corporations different?

This article is based on the explanatory article
"[Explanation] How to start an IFA business and successful patterns of revenue models"
published on the site I operate.

For more detailed charts and comparisons by model, please see the article at the link below.
👉 Read the full article on the blog

■ Why is entry into the IFA industry increasing?

In recent years, IFA entry from industries with high affinity with existing businesses, such as insurance agencies, real estate, and professional services, has become prominent.

The background includes the following factors:

• Increased interest in investment due to the new NISA system (implemented in 2024)

• Raising financial literacy through mandatory financial education in high schools

• Expanding customer needs for "neutral advisors"

Although the presence of IFAs in Japan is still small compared to Western countries, this conversely means that untapped markets = business opportunities remain.

■ How to enter the IFA business?

To conduct IFA business, registration as a financial instruments intermediary is required. This is a system limited to corporations, and entry is possible in the following two ways.

• Establish a new corporation

• Register using an existing corporation

The basic flow of registration is as follows:

1. Conclude a business consignment contract with a partner securities company

2. Apply for registration with the Financial Services Agency (appointment of a dedicated manager, etc.)

3. Start operations after registration is complete

Since major securities firms are cautious about partnerships, collaborating with small to medium-sized securities firms can be a realistic option.

■ Revenue model for IFA corporations: The 3 pillars

The main revenue sources for an IFA corporation are the following three:

① Transaction fees

Compensation for customer securities transactions. 20-40% is deducted by the securities firm.

② Management fees

Annual fees based on assets under management, such as investment trusts (approx. 0.5-2.0%)

③ Referral fees

Compensation from partnerships with tax accountants, real estate agents, M&A intermediaries, etc.

■ "Side-business IFAs" with other industries are expanding

IFA corporations can operate side businesses in other industries, and the following combinations are actually increasing:

• Investment advisory services (wrap accounts, etc.)

• Tax accountant/CPA services (advisory contracts and tax return support)

• Insurance agency business (life and non-life insurance sales)

• Financial planning services (life plan creation)

Having multiple revenue sources improves both corporate management stability and customer satisfaction.

■ Growth strategy after entry: What are the characteristics of successful corporations?

Corporations that are continuously growing in the IFA industry share common strategies.

• Sales activities using multiple channels such as referrals, seminars, and social media

• Building continuous relationships with customers through the introduction of CRM tools

• Improving credibility through collaboration with local financial institutions and professionals

In particular, corporations that can invest in both 'people' and 'systems' will accelerate the process of building trust as an IFA.

■ Summary: 'Now' is the chance to start an IFA business

Regulatory changes, rising interest in investment, and the spread of financial education—
these are all tailwinds for IFAs.

Moving forward, it will not just be about 'selling financial products,' but IFA corporations that can stand by their customers' lives and assets that will be chosen in the long term.

This article provided an overview, but if you would like to know more about the specific composition of actual revenue models or points to note when selecting partners, please also see the following blog post.

👉 [Explanation] How to start an IFA business and success patterns for revenue models
*Specific success stories and model comparisons are also posted.

I will continue to share information on these topics, so please follow and like if you'd like!

📘 Related note articles

👉[What is an IFA?] Basic knowledge you should know before starting as an IFA, from obtaining a securities salesperson qualification to renewal training
For those interested in working as an IFA, we explain in an easy-to-understand manner the mechanisms of the financial product intermediary business, the flow of obtaining and registering for a securities salesperson qualification, and even the renewal training system for maintaining the qualification, which are the basic knowledge necessary for working as an IFA.
▶ Recommended for those who want to organize the overall picture of the system before starting as an IFA.