Merchant Account for Financial Advisors & Consulting
Let's begin with the simplest question: what is a merchant account and why do you need it? It's simple. If your business is online or at least some part of it is, you'll need a merchant account that can handle the payments you receive via credit or debit cards and put it directly in your account. Basically, it includes a bundle of services that automate the entire process of taking credit card information and transferring the funds to your business or personal account.
Now that we understand what a merchant account is, let's address another common question: is it difficult to get a merchant account for financial consulting and advisory? The answer is yes, getting a merchant account for your business, if it's deemed high risk, can be very tough. Many providers will reject your application because your business is simply risky. There are several other reasons as well why these applications get rejected.
However, there are several services that deal with high-risk businesses so that businesses considered high risk by strict underwriting guidelines can also get a merchant account. Now let's talk about financial advisors and consulting firms.
Risk Analysis of the Financial Advice Industry
As a financial advisor, you live by the golden rule that your clients' interests come first. You use your industry knowledge to furnish your clients with valuable financial advice and tailor their investment plans for them to meet their personal financial needs based on their financial goals.
You offer invaluable services such as managing personal finances, asset protection, diversifying 401K portfolios, evaluating market risk, and investing in stocks, commodities and securities. Your goal is to properly manage the risks so that your efforts can yield positive results and make your clients happy.
Needless to say, the risk involved in working as a financial advisor is a lot. Handling finances and investments can often lead to disastrous results for a client, and the chances of scams and identity thefts are even higher. So it's no surprise that the industry of financial advice and consultation is deemed highly risky.
Why Merchant Accounts Are Useful for Financial Advisors
But how does having a merchant account help a financial advisor? It makes sense for an online store to have a merchant account so that its international online customers can easily pay, but being a financial advisor, your clients can simply deliver you a check for your services.
It goes without saying that as a financial advisor, the level of service you're offering to your client is important for the relationship to thrive. The question is this: are you providing everything you can? The answer is possibly yes, but there's more that you can do to keep your clients happy.
You can provide your clients a convenient way to pay for your services. Now it's easy to set up credit card processing for financial advisors and consultants, and it's a value-added service that clients will definitely love having.
Who doesn't enjoy the convenience of credit cards these days? They are so widely accepted that even businesses that traditionally billed their clients are now realizing that credit cards have some benefits worth availing. You can save on stock, printing, and postage. You can also save on administrative duties, and the automation of receivable and payable accounts is another great benefit.
Credit card processing service for your clients simplifies the process for your business as well as for them. Their recurring payments can be processed at specified times, and you won't have to wait to receive checks. You won't even have to make a trip to your bank so that you can deposit a check. Credit card processing is simply more convenient and that's why online businesses are blooming.
Type of Merchant Account Required
Unlike other industries, here, you must be very familiar with the word risk and what it is all about. Processing banks love this word, especially the ones that offer merchant accounts to different businesses. Merchant accounts are usually classified as high risk or low risk.
Low-risk accounts are normally the ones that are available to restaurants or retail stores. High-risk accounts are much more common in ecommerce and most service type businesses such as yours.
This risk is assessed by evaluating your business model such as the particular service that you're rendering, the advertising and promotional methods you're using, the level of customer support that you're offering, and the fees you're charging.
In addition to this, processing services consider factors such as the risk of chargebacks. In the financial advice business, this risk is small or non-existent because advisors have strong relationships with their clients. However, the problem is that these services don't take business-client relationships into account when evaluating the chargeback risk.
You'll need to look for a merchant account that doesn't charge any setup or application fees. Since you're just starting out, every penny counts and you don't want to spend on application fees only to get rejected.
Domestic and Offshore Options
While in many cases, choosing an offshore account is not necessary, that's not always the case for financial advisors. In most cases, the risk is simply too high that no amount of leniency in underwriting can deem a business as low risk and that's why offshore account becomes necessary. Financial advisors should, however, also look for a domestic option as they'll get more security and much better rates.
If you have been denied by other credit card processor and are reluctant to apply to this service, that is understandable, but this service specializes in high-risk merchants, so you're in the right place. Although offering your clients the service of credit card processing might be a value-added service now, it will soon become a necessity, considering how quickly credit cards are becoming the standard currency and replacing paper currency in all circles of life.