SMART Goal Setting: A Guide for You and Your Clients

Anyone who has ever accomplished anything of significance started with a goal. Professional athletes, entertainers, business titans, and the millionaire next door will all tell you that they began with the end in mind, visualizing their destination and then mapping the road to get there.

We’ve written about the importance of goal setting and the significance of writing them down and keeping them in front of you to remind you of what’s possible. However, the process of goal setting is often marred with unrealistic expectations or ambivalence about what you want to achieve, resulting in unachievable or unmeasurable goals.

Financial advisors on the path to success can’t afford to wallow in hopes or pipe dreams. You need clearly defined, actionable goals that reflect your professional and personal ambitions. Although goal setting isn’t rocket science, it does require a deliberate process to ensure your goals are Specific, Measurable, Achievable, Relevant, and Time-bound. In other words, it requires the SMART goal-setting framework.

How the SMART framework works

The SMART framework is a popular and effective goal-setting tool financial advisors can use in their own practice and with their clients. Here’s how it works for your practice:

S – Specific

Goals must be specific. Defining clear and concise goals that specify what you want to achieve is essential. Setting a goal to “grow my business this year” is not specific and leaves room for ambiguity as to what exactly it means. Instead, you could say, “Increase net new client acquisition by 10% in the next quarter.” That’s specific and measurable.

M – Measurable

You must be able to track progress towards your goals with concrete metrics. That first example of “growing my business” doesn’t provide any benchmarks for monitoring your progress. However, saying that you want to “meet with 15 potential clients per month” or “generate $50,000 in new investment assets under management within six months” allows you to break the goal into smaller, more trackable benchmarks.

A – Achievable

It’s essential to set goals that are challenging but attainable with effort and dedication. When you state a goal, consider your resources, current market conditions, and past performance in determining whether it’s achievable.

For example, “increase monthly revenue by 50%” might be aggressive, while a 10% increase might be too conservative. If, while tracking your progress on a goal, you determine you might blow past it, you can adjust the goal to make it more aggressive.

R – Relevant

You must ensure that your goals are aligned with your overall business vision and values. Focus on goals that drive progress toward your desired future state. For example, “Attract new clients with high net worth” might not be relevant if your expertise lies in middle-income financial planning.

T – Time-bound

Establish a specific timeframe for achieving your goals. Deadlines create urgency and focus, motivating action. Instead of “increase assets under management by 25%,” define it as “increase assets under management by 25% by the end of the fourth quarter.”

Using the SMART framework results in realistic, more focused goals, making it easier to develop action plans for achieving them. That’s why using the SMART framework with your clients makes sense.

Using SMART goals with your clients

When guiding your clients in defining SMART financial goals, you can better help them articulate their financial dreams and translate them into specific, measurable, achievable, and time-bound objectives. People are more motivated by realistic goals and are more likely to commit to a personalized financial plan or investment strategy when they know it’s tailored to their goals and timelines.

Using the SMART framework makes it easier for you and your clients to be on the same page when tracking their progress toward their goals and getting buy-in when adjustments to strategies are needed.

Additional benefits of using SMART with your clients:

  • Improved communication: SMART goals are clear and concise, facilitating efficient communication between advisor and client.
  • Enhanced motivation: Measurable progress towards specific goals fuels motivation and keeps both advisor and client on track.
  • Increased accountability: Time-bound goals create a sense of urgency and foster accountability for both advisors and clients.
  • Better decision-making: SMART goals provide a framework for evaluating opportunities and ensuring they align with overall objectives.

By using the SMART framework, financial advisors can set effective goals for themselves and their clients, maximizing the chances of success and achieving financial aspirations.

Related: Mastering the Art of Saying 'No': A Vital Skill for Advisors