Advisers can help clients keep their 2017 financial resolutions

Money-related resolutions are second only to weight loss pledges this time of year, but there are ways financial advisers can help clients retain their financial resolve for longer than they stay off the cupcakes.
Advisers can help clients set goals they’re likely to attain so they don’t take on unrealistic aspirations, such as saving $25,000 in a year following a 12-month period where they’ve saved $0.
(More: Top minds in financial advice share their resolutions for 2017)
“In money management, stretch goals are counterproductive because if you don’t reach them it sets you back mentally,” said Lynnette Khalfani-Cox, a personal finance coach and founder of The Money Coach. “People feel defeated.”
Everyone is much likelier to have long-term success if they start with an obtainable resolution and establish small “wins,” she said.
That can have a great impact on the psyche and keep pushing someone towards success.
(More: How financial advisers can get unstuck in the New Year)
“That’s why the YMCA is packed in January and empty in March, because people have taken on too much, like pledging to spend three hours a day in the gym.”
Advisers also can help remind clients to stay focused on achieving the underlying objectives that caused them to set financial goals in the first place.
That may mean sending weekly or biweekly emails that can be scheduled through a client relationship management system and offer encouragement, said Rich Feight, a fee-only planner and founder of Iam Financial.
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These gentle reminders should seek to elicit emotional responses, such as prompting them to focus on the joy of not having to worry about finances during retirement or being able to pay for college for their children, he said.
“Of course you’ll need to do this with the right type of clients to make sure they aren’t someone who would get annoyed by regular reminders,” Mr. Feight said.
Encouraging clients to take advantage of automation in their finances is another way advisers can help lead them towards a money victory.
“There are a lot of apps and online financial tools to get on track and stay on track,” Ms. Khalfani-Cox said. “They can take the leg work out of what you have to do and make you rely less on your own will power.”
Finally, advisers should encourage their clients to reward themselves at set intervals to celebrate their progress, she said.
This year Mr. Feight has his own financial resolution. He wants to take a deep-dive look into his family’s cash flow, and in the process find an effective cash flow software to use with clients.
“Cash flow is key because it’s the lifeblood of finances,” he said. “Where you’re spending money should be a reflection of your values.”