With 2020 rapidly approach- ing, it’s time to address one of the main challenges that
owner advisors face: establishing goals
for the coming year.
How can setting goals for a business be a challenge? By themselves,
goals in business are basically harmless. Typically, they are expressed as a
number, a time frame, an innovation, an
addition, or a change.
The problems arise from how we
think about them: as something that we
now must do, create, attain, or achieve.
And once we’ve set our goal, or goals, we
usually believe that not attaining them is
a failure on our or our teams’ part — an
indication that we’re not really as good
at what we do as we previously thought.
Today this behavior commonly is
referred to as “setting ourselves up to
fail.” An example is setting a goal for
your AUM growth to be attained within a specific time frame (for example,
reaching $1 billion in AUM within the
next three or five years.)
You can see some of the flaws in this
approach, starting with the tendency to
select an arbitrary number. That is, it’s
just a figure we’ve pulled out of thin air,
based on nothing but wishful thinking.
In contrast, a more rational approach
would involve making a realistic assess-
• What could you do to attract more
client assets, more quickly, than
your current rate and strategy?
• What can you do to better train your
people serving clients?
• How can you be better at changing
and leading your organization?
In my experience, most growth plans
fail not because the firm owner was
lacking the required skills, but because
the owner’s goals were unrealistic.
The reality is that growing an independent advisory business takes a lot
of capital, time, hard work and realistic
planning. While setting a big goal like
the above may seem motivating, the
other side of that coin is it also can create a lot of stress — and the more unrealistic the goal, the greater the stress.
MOVE OUTSIDE THE BOX
What’s more, goal setting — whether
unrealistic or not — tends to limit an
owner’s thinking. When firm owners set
goals for themselves and their businesses, they often get so focused on reaching
those specific targets that they fail to
consider other alternatives that could be
even more beneficial to their business.
For instance, a focus on reaching a
specific AUM by a set date can prevent
owners from looking at other non-AUM
based services they could add to their
business, such as tax planning, estate
planning, 401(k)s, and more. Often,
these other services can be more easily implemented at much lower costs —
having an even larger impact on a firm’s
profitability and diversity of services.
Finally, setting goals can blind owners
to existing issues in their businesses that
may hamper the growth they are looking for. To help owners both reduce the
stress of unrealistic goal setting and the
fear of failing to attain those goals, they
should start their growth plan by first
making an assessment of where their
firm is today, and how it would have to
change to support the kind of increase
they have in mind.
This assessment is not about what
your goals should or shouldn’t be, but
Set Goals That Build on What You’ve Got
Many advisors set themselves up for failure. Instead, take small steps to
accomplish big growth.
Most growth plans
that don’t attain
their goals fail not
because the firm
owner was lacking
the required skills,
but because the
owner’s goals were
THE FAST TRACK
By Angie Herbers