Setting Sales Targets For Your Financial Planning Business

I was at a small gathering of advisers last week and we spent quite a bit of time talking about our businesses and targets for the rest of 2011. What struck me was that many of the advisers had a tough time setting any meaningful goals for themselves or for their business, and those that did set goals found it hard to tell us how they were going to achieve them.In a future article I’ll look at how to set and achieve goals – for now I’ll look at some common targets for financial planning businesses.Number of New Clients and New Client Meetings A lot of planning businesses have to get new clients in order to grow. All of my peers are still actively chasing new clients for their business. Some of the measures we talked about were to record:Number of new clients who make a first appointment.
Source of these new clients (referral etc).
Number who request a financial plan.
How many new prospects actually execute the plan and become clients?
Revenue per new client (both upfront and ongoing).From these figures you can quickly work out, on average, how many new people you need to see every week / fortnight / month to achieve your income goals. You’re also able to see which referral sources produce the best quality new clients.Activity Goals There are certain activities that successful financial advisers do regularly as part of their marketing.Whilst cold calling can be frowned upon, the majority of advisers that I know use the phone to proactively set up new appointments. In a lot of cases they’re calling existing clients with the intent to get them in for a review meeting. Sometimes they’re asking for referrals from their clients. Other times they’re speaking with centres of influence to generate more client referrals.I know some advisers who target certain businesses and cold call – some use a telemarketer.Importantly, this is an activity that you can control. Good financial advisers know how many calls they need to make each day to set up a certain amount of appointments. And, ultimately, most advisers generate revenue from sitting in front of clients.To track this, I like to use a piece of paper and put a tick for each phone call I make.Financial Plans Prepared Here in Australia, the legislators like to call financial plans ‘Statements of Advice’, or SoA for short. I still like to call them financial plans because that’s what my clients call them!To give our clients personalised financial advice, we need to write a financial plan. So one measure I like to track is the number of financial plans we prepare each week. From this figure we can make some assumptions about future levels of production and revenue.Ongoing Service ProgramsLike a lot of advisers, I’m moving a lot of my clients over to an ongoing service program with a set monthly retainer. This helps to increase the recurring revenue of the business, and keeps our cash flow more stable, whilst also enabling us to deliver ongoing service to clients in a commercial and profitable manner.I track the number of new clients that take up the ongoing service program, as well as the number of existing clients who choose to subscribe to it.Do You Need Targets?I’m a firm believer in having targets for your business. Setting targets helps you decide on the important things to measure, and keeps you focused on the things you need to do in order to produce revenue and keep your clients happy.The advisers I was with last week all agreed that it was best to stick to a few important targets rather than have too many. Popular measures we talked about were the number of appointments, number of financial plans produced, and the number of calls we had to make.What do you think about having targets? Are they necessary?I’ve only covered a few here. What other targets have you found helpful in your financial planning business?

What Is Financial Planning?

I thought it wise to share with you what a financial planner actually does, because in my experience most people either have misconceptions or just don’t know.I like to think of financial planning as the process where the client and planner get together to initially discuss the clients’ current situation. The financial planner and client then explore what’s important to the client and what their future goals, aspirations and objectives are. The planner then works out a strategy to meet these objectives and prepares a ‘blueprint’ known as a Statement of Advice or Financial Plan. Normally this covers retirement planning, eg. Informing a 40 year old of the steps required for him to retire at their preferred age of 60 with a retirement income of $75,000, in today’s dollars.The actual steps involved may include:Budgeting
Calculating the optimal level of salary sacrifice
Implementing savings plans
Tax effective investments
Government co-contribution
Government Pension maximisation strategies
Starting a transition to retirement
Self managed super funds (DIY)
Direct Shares
Property investing
Mortgage speed repayment strategiesWhilst the Financial Plan/Statement of Advice will hopefully show a detailed plan of action for the client to get to where they want to be, sometimes the goal is unrealistic and can’t be met. In this case the client is informed that there will likely be a shortfall, but that the shortfall can be limited by working a few more years, or foregoing their annual overseas holiday etc.I consider the above process to be ‘holistic’ financial planning, meaning that it covers the client’s entire situation rather than just bits of it. Having said that, there are numerous occasions when clients see a planner for just one specific reason. For example, they may want advice on how best to invest an inheritance or other financial windfall, or they may only want to arrange income protection or life insurance. Whilst financial planners can help with these ‘one off’ situations, I think the majority of financial planners would agree that the clients best interests are served if they have a broader and more comprehensive meeting.Without doubt the vast majority of people will benefit from visiting with a reputable financial planner and having a chat with them. In most cases the initial meeting is at the planner’s cost (no cost to you) and this enables you to meet with a few different financial planners before you decide who to entrust your financial future with.