5 Actions Items To Get 2022 Off To A Great Start

By Paul Feldman

Greetings and Happy New Year! As we get started in 2022, now is the time to ensure that your financial planning practice is ship shape and ready for the year ahead. This week we’re sharing five action items to get you off to a quick start in both your financial planning practice and for your clients.

1. Update and adjust your financial planning benchmarks. Whether you use a Monte Carlo engine or home-brewed financial planning spreadsheets and word documents for your financial plans, it’s critical that the data and assumptions you’re using in your financial plans reflect both the current reality and potential reality of things to come.

Planners over the past decade have been blessed with low inflation and high market returns, but as the CPI showed 6.8% 12-month growth at the end of November, it’s important that we take stock of our assumptions regarding both inflation and market returns and how that affects our client’s financial plans.

2. Review and Update Your Compliance Documents. Whether you’re an RIA owner responsible for your form ADV filings or managing an independent practice under a larger organization’s umbrella, it’s a good idea to start the year off with a review of your code of ethics and compliance processes and procedures.

Do they reflect your change to a hybrid or remote practice? Or do they still reflect the working environment circa pre-pandemic? Take the time to ensure not only that your documents are up to date, but that they reflect how you work in the present environment.

3. Review compensation and adjust accordingly. This goes both for financial planners setting fees and also for firm and team managers setting pay for their team. If your firm offers AUM-based or commission-only services, your prices likely adjust with the assets or investments of your clients and no action is really required on the client side.

But if your firm charges retainers, project fees, or hourly rates, it’s important that your fees reflect an adjustment for inflation as well as for the growth of your experience. While charging $250 an hour might be a nice clean number, if you keep charging that same rate in 2022, your take-home rate is only worth $234.08 an hour, even though your knowledge and experience have grown!

With this all in mind, it’s also important to keep compensation for you and your team competitive, so ensure that if you haven’t already, raises and compensation adjustments have been or will be made shortly.

4. Set your KPIs and Benchmarks for 2022. No financial planner worth their salt fails to set goals and objectives for the coming year. Laying out quantitative measures such as growth of assets under management, number of new clients, or revenue and net income goals, are valuable for measuring the progress and growth of the firm.

A helpful tool for this is to look at the past three year’s growth and to consider the average growth of new clients, assets, and other measures relevant to how you practice financial planning. On the qualitative side, it helps to set objectives around professional development, team growth, work flows, and other organizational and skill-building metrics for the year.

Identifying a new designation to earn or a new role you’d like to fit into the firm early in the year can help you structure how you approach your schedule for the year and keep you on track for continuing to grow.

5. Set your Calendar NOW! A classic analogy for good time management is the “big rocks in a jar.” Early in the year is the time to set the big rocks, whether that be personal trips and holidays, professional conferences, or other commitments you want to be sure to keep.

Blocking time and putting everything important for the year on the calendar now ensures that you don’t run into issues later on in the year where short-term requests and events can get in the way of things you know are important to you.

This helps you both set professional goals well in advance but also to establish and keep important work life balance considerations at the forefront. Being present for your firm and clients is important, but for yourself, family, and friends, even moreso.

Daniel M. Yerger, MBA, CFP®, ChFC, AIF, CDFA, is the owner of MY Wealth Planners®, a fee-only financial planning firm in Longmont, CO, and a Ph.D. student in Personal Financial Planning at Kansas State University.

FPA NexGen, a community of the Financial Planning Association® (FPA®), aims to provide support and collaboration for those professionals new to the financial planning profession. With more than 2,500 like-minded young professionals, members of FPA NexGen are ready to share their experiences and further the future of the financial planning profession. Learn more about our engaged community and join the conversation on Twitter.

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