Setting Goals for Your Financial Practice

Having a strategy or game plan for growth is important for financial advisors to thrive in the current market. Clear definition of business goals is the first step in developing this growth strategy for the practice. But the Study on Drivers of Business Growth, undertaken in 2014 by the FPA Research and Practice Institute, finds that nearly 70% of surveyed financial planners did not have formal goals. At the same time, the study also finds that “high growth advisors were considerably more likely to have a formal written business plan” that defines these business goals.

Financial planners need solid goals to help grow their practices.

Factors To Consider In Goal Setting

The process of business goal setting should start with identifying and articulating the vision of the financial advisor. Financial advisors need to step back and take time out to deliberate on the future of their practices.


In addition to articulating the vision, financial advisors should also consider the following factors when deciding their business goals:

  •  Aligning personal goals with business goals improves the likelihood of successfully achieving all of them. Financial advisors at various stages in their professional life need to reevaluate the business goals in light of their personal goals. Financial advisors who are closer to retirement need to ensure that the business goals reflect their retirement timelines and ensure a seamless transition into the next phase of life. Younger financial advisors need to ensure that their personal goals are met through work-life balance to improve the odds of meeting their business goals as well.
  •  Communicating effectively the business goals to team members can help get buy-in toward achieving the vision of the practice. Prominently displaying the business goals is another step in effectively communicating them and ensuring recall for both the financial advisor and the team. Defining responsibilities and holding team members accountable for activities towards achieving the goal helps improve transparency within the practice.
  •  Increasing the frequency with which business goals are reviewed is important to ensure their relevance. The FPA Study on Driver of Business Growth finds that “most advisors review their goals less than every six months.” Such infrequent review of business goals indicates the financial advisor may not have sufficient time to take corrective actions to meet short-term goals, and even long-term goals become at risk.
  •  Combining result-based business goals with activity-based goals that complement one another provides action items the financial advisor and his or her team can work toward. For example, defining business goals in terms of increasing the share of Generation Y and Z clients in the client base to X% can be supported by specific activity goals such as making a specific number of marketing initiatives within the same defined period.
  •  Defining a manageable number of business goals during the process of goal setting ensures a better chance of success based on the resources available to the practice. Having a large number of business goals which are repeatedly not achieved can be demoralizing for the practice and can derail the entire process.

Creating SMART Goals

A poorly articulated goal (grow the business) is perhaps worse than no goal at all. The poorly articulated goal provides no roadmap to success, no way to measure that success, and therefore no way to achieve that success.

A common management philosophy used in goal setting to ensure goals do provide a useful roadmap to success is the SMART format. The SMART acronym states that goals need to be Specific, Measurable, Achievable, Relevant, and Time bound. These principles of goal setting can help financial advisors define relevant business goals.

  •  Specific – It is important for the financial advisor to separate business vision from business goals. While the vision of the business can be more generic in nature, financial advisors need to define clear and concise goals for the practice. Goals must be specific milestones or activities that help the financial advisor move towards the vision. The more specific and well defined the goals are, the more targeted the strategy to achieve these goals will be.
  •  Measureable – While the vision of the financial advisor practice provides the overall direction for the practice, goals that are both quantifiable and trackable provide day-to-day activities to reach the vision’s direction. Tracking goals and reviewing the progress toward achieving those goals provide the financial advisor motivation and opportunities for course correction as required.
  •  Achievable – Goals must be in line with the available resources of the financial advisor. As a part of the process, strategies to achieve goals must be developed and documented in a written business plan. The necessary resource allocation for achieving these goals as well as the team member responsibilities should also be outlined in the business plan.
  •  Relevant – While defining these business goals, it is important that market realities and the current situation of the financial advisor practice be taken into account. Comparing the practice to industry performance benchmarks is a useful tool to both ensure the business goals are relevant, and to provide trackable metrics to strive for.
  •  Time-bound – Business goals must be defined with specific timeframes to keep them relevant and realistic. Financial advisors can define long term and short term goals for the practice based on the specific needs of their practices.

While these guidelines for goal setting may help financial advisors define their business goals, these goals also need to translate into a well-written business plan. This business plan, which is the strategy document to achieve the business goals, needs to be viewed as a “living document” that is reviewed and realigned periodically based on the changing circumstances of the practice. The business plan must lay down the process that will be followed to achieve the business goals, and the role and responsibilities of each member of the practice in achieving these goals.

Goal setting is a proactive approach to growth where the financial advisor takes control of the future of the practice rather than reacting to market situations. Business goal setting helps the financial advisor practice in developing a road map to its destination and spurs the financial advisor to action. It ensures a higher level of management discipline and improves the competitiveness of the practice through a more efficient allocation of available human and financial resources.

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