Advisors: Turn New Year’s Goals Into Achievements

How intentional financial advisors are about following up on their New Year‘s resolutions can determine whether they’re part of the 19% who report success in fulfilling their resolutions or the 81% who wistfully let the year pass without progress.

That data from a University of Scranton study and other research indicate that the New Year’s pledge of self-improvement does not usually survive the first month.

Pre-pandemic, gyms were overflowing in early January, but you had to wait just two weeks before the crowds at your favorite workout studio dwindled to a manageable level. Ads for diet plans and smoking cessation also noticeably decline after the year’s first blush. Strava, a social network site for athletes, says Quitter’s Day for resolutions is about 14 days out, making this Friday the pivotal day.

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The Psychology of Resolutions for Advisors

Why do people have such a fascination for setting goals if there is such a high likelihood of failure? There’s a psychological explanation: New Year’s resolutions allow people to exercise an inherent need for self-efficacy. In a nutshell, self-efficacy allows them to reassert control over their lives. Successfully doing so can uplift the psyche.

The change of the calendar is a logical time to reassert control, and with two years of the COVID-19 pandemic in the rearview, that desire is strong in 2022.

Successfully achieving a resolution has been shown to stimulate chemical neurotransmitters in the brain. Dopamine, one of those chemicals, is known as the “feel-good” neurotransmitter that improves motivation and increases alertness, creativity and focus. Achieving resolutions generates momentum to reach more goals.

When a New Year’s resolution fails, it is likely because no tactical plan was laid out for executing broader strategic goals. Advisors may know what they want to accomplish and why but may not implement practical steps to get there. You wouldn’t drive from New York to California without a map or Siri’s help, and laying the groundwork for achieving a goal is no different: You need a concrete plan.

Financial advisors can use the science of motivation to successfully scale their practice and increase its value. More important, they can execute a tactical plan in blocks that are small enough to keep their momentum flowing until they’ve reached their goals. Here are five steps to take to turn your resolution from a distant vision into an achievement:

— Envision the ideal long-term outcome.

— Divide the long-term vision into annual goals.

— Divide annual goals into quarterly goals.

— Identify specific activities to meet each quarterly goal.

— Create accountability for your plan.

[READ: The Top 3 Wildcards Advisors Must Consider in 2022.]

Envision the Ideal Long-Term Outcome

The first step is strategic and visionary. Begin with the end goal in mind and write down exactly what you want your firm to look like in five years. Use specific descriptions of your ideal niche market, client base, staffing, technology, marketing, branding and firm valuation. Five years is far enough in the future to make the objective realistic but short enough to keep up with the rapid pace of innovation.

Divide the Long-Term Vision Into Annual Goals

Determine your annual goals by evaluating the progress that must be made each year to successfully attain the long-term vision. The goals should be measurable, with specific dates, amounts and distinct milestones that help you definitively ascertain your progress.

Divide Annual Goals Into Quarterly Goals

Quarterly goals are determined the same way as annual goals. What measurable, smaller goals need to be met each quarter to be on track at the end of the year?

Identify Specific Activities to Meet Each Quarterly Goal

Each activity on this list must be actionable. Ideally, each is the first specific step in the quarter to generate momentum toward meeting the quarterly goal. For example, instead of listing “Discuss branding campaign” as an activity, go for “Call Sharon J. at ABC Marketing to discuss branding needs.” These details are the key to successfully completing each activity in a meaningful way. “Attend the ABC Educational Conference” may be actionable, but “Register for the ABC Educational Conference” is the more definitive initial activity.

Create Accountability for Your Plan

Enter a specific starting date on your calendar and then schedule each activity and the quarterly, annual and ultimate goal deadlines. As each of those quarterly dates approaches, take the time to assess whether you have met your milestones. Adjust the next quarter’s activity to reflect your actual progress and what is necessary to stay on track for subsequent dates.

This continual course correction is similar to the “1-in-60” aviation rule of thumb that if a pilot’s initial heading is off by just one degree, the plane will be a mile off course after 60 miles. This may seem like a tiny margin of error, but it is an exercise in humility that ensures that the pilot can land safely and on time at the correct airport. Continually checking your quarterly milestones gives you the assurance that you will also arrive where you desire, on time.

Although only a small minority of people achieve their New Year’s resolutions, they are starting from a pool of about 50% of the population who make a resolution in the first place. In comparison, only 28% of financial advisors have taken the time to create a business plan, according to the Financial Planning Association. Yet, firms that complete a comprehensive financial plan grow 30 times as fast as those who do not, according to a study published in the Journal of Management Studies.

By applying these principles to their business plan, financial advisors gain a competitive edge that not only allows them to create their dream firm, but also brings peace and prosperity to their personal lives.

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