New Year’s Goals to Effectively Increase New Revenue

Beverly Flaxington

Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.

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Dear Bev,

As we begin 2016, I want to specify goals for each of our advisors. I’ve been told it would be too “random” to assign a new asset number based on what I hope the firm to achieve in the coming year. What is the right way to set achievable goals? I don’t want to set the bar so low that they don’t need to work hard, nor can I afford to do that. At the same time, if I set it too high, all I will hear is grumbling for the first few months of the year. What’s an approach to get specific while also putting everyone in a position to achieve?

Ryen L.

Dear Ryen,

I have spent my entire career in sales, and this is the age old question – should goals be what the firm or leader needs, or should they be what people want and believe they can do or is there some scientific algorithm that helps accomplish both scenarios? After decades of looking at this question from a number of angles, I can tell you definitively that there is no right answer.

That said, I believe there are right ways to set goals to get your advisors on board and more enthused. First, review what’s been done in the past. If you can, gather data that shows historical numbers (assuming they’ve been somewhat good, of course). People like the black and white data. Second, review your compensation plan. While compensation isn’t directly tied to the number you will set, it’s directly tied to employees’ motivation levels. If they can make a very nice living without bringing in a new dollar of business, you will have a harder time increasing the goal. Consider whether there is a way to do some sort of profit sharing if the firm overall hits a certain new number in assets.

Third, have a conversation with the team as a whole. Bring the data on past results and discuss what’s possible and what the firm needs to continue to grow and thrive. They may want you to hire additional staff or invest in new technology, for example. Have a frank discussion about the new revenue level that would be needed in order to take on additional expenses. Wherever possible, be as specific as you can, tying the costs to the expectation for increased revenue from fees.

Lastly, be sure to publish the numbers you all agreed upon. Once you have a commitment to X% in new revenue, send something in writing to all of your advisors. Track progress every month and let everyone know of the results. The more focus you can put on the goals and where the firm stands against the goals, the more your advisors will pay attention to them.

Too many firms have a goal or set of goals, but then forget about them. You want to keep talking about your objectives and keep your advisors engaged in the discussion.