It’s the time of year when advisors and firms are in the midst of setting goals for the new year as part of the business planning process. During this period, advisors should focus their activities and efforts by making their goals SMART, an acronym for specific, measurable, achievable, relevant, and time-bound.
Let’s take a look at some of the most common goals and items advisors might want to track and measure as we head into 2025.
What has been your average growth rate for the past 3–5 years, and do you consider that growth to be sustainable moving forward? Take a moment to reflect on your track record to gauge the likelihood of repeating your results. If you had an unusual event (e.g., a large insurance policy or premium), you might want to discount it in your goal setting, as it’s unlikely to occur again. Calculate the average of your recent historical growth; assuming the same general circumstances apply in 2025, this number could be your baseline for a realistic goal.
If realistic goals reflect an average year, stretch goals should be set in anticipation of a great one. Will this be your breakout year? Perhaps you recently completed a designation that you think will better position your strengths, or you’re undertaking a marketing campaign that could attract new pools of clients. It could be that a business owner you’ve worked with for years is getting ready to sell their company and you anticipate additional assets to manage. If everything worked out as you hoped, what growth would that translate to? Use this as your stretch goal to both inspire you and make it more attainable.
Attaining a new client is more expensive than retaining an existing one. The best clients are the ones you already have, so knowing how well you retain clients is crucial to track—as well as understanding why you lost one.
Financial advisors achieve the majority of their organic growth through referrals, either from current clients or from centers of influence. That’s why focusing on introductions and referrals is one of the most important things you can do for your practice. How many introductions or referrals did you receive over the past year? At a minimum, you should be tracking who referred you, how long it took to acquire the new client, and your close ratio so you know how many referrals you need in your pipeline to translate into new clients.
Every advisor should also know how many new clients they brought in over the past year. New clients are the lifeblood of a practice—they bring in current assets, potential future assets, and additional referral opportunities. For benchmarking purposes, InvestmentNews data indicates that an advisor should expect to gain 5 new clients for every 100 clients served. So, how do you stack up?
How successful were you at bringing in new assets from current clients? There are countless opportunities throughout the year to ask about bonuses, raises, job changes, property sales, inheritances, and other circumstances. Tracking additional assets can be another way to gauge how pleased clients are with the job you are doing and, thus, how referable you are.
Knowing how you and your staff are accurately completing paperwork is a helpful activity to measure. What is your NIGO (not in good order) rate, and how much extra time do you have to spend fixing incorrect paperwork after the fact? If you have to go back to a client for a signature or correction, it doesn’t speak well for your firm. And for the sake of your scale and efficiency, getting it right the first time should be the goal.
In addition to these items above, many other measurable aspects of your business are crucial to monitor. If marketing is a priority for your firm, website metrics, open/close rates, and video views may be necessary to watch, while presentations, enrollment meetings, and employee contribution rates could be essential for retirement plan businesses to track. As we approach the new year, it’s important to align your specific business planning goals to the metrics that make sense and start tracking results carefully to achieve success.
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