GETTING SMART ABOUT YOUR CLIENTS’ BEST INTERESTS

Getting SMART about your clients’ best interests

 

Being able to show that you are putting your clients’ interests first goes way beyond compliance – it also builds trust, demonstrates value and motivates clients. And by using SMART goals, you can help your clients build strong actionable plans, so they can enjoy the lifestyle they really want.

 

A study by CoreData and the AFA found that most advisers welcomed the Best Interest Duty obligations introduced in July 2013, as one of the FOFA reforms. Many said it was key to raising industry standards – and would result in better client outcomes. They also said the formal compliance structure had boosted their confidence in which their advice put their clients’ needs first1.

The Best Interests Duty outlines an adviser’s obligation to always act in their client’s best interest. In other words, an adviser should be able to show that their client is likely to be in a better position to achieve their goals after following their advice.

Of course, meeting your best interest duties is about more than ticking the right boxes and keeping your compliance team happy. Being able to show clients that your advice puts them first is key to building a healthy and trusting relationship with them – and demonstrating the value you can add as a professional. 

And one way to clearly demonstrate to your clients that they are at the centre of your advice is by using SMART goals.

 

SMART in action

Here’s a recap of the SMART principles – and how you can use them to create strong, actionable goals for your clients.

 

1. Be specific

Do you and your client know exactly what they want to achieve?

For example, the goal, ‘I want to be financially secure’ is too broad and vague, and can mean different things to different people. For some, it may be a debt-free retirement with overseas trips, a new car every few years and money to help their adult children with education or purchasing a home. Others may be satisfied with just having enough money to cover more modest needs.

To help your clients get specific, ask questions like:

  • What do you want to achieve (don’t be afraid to get really detailed)?
  • When do you want to achieve it by? 
  • Why do you want to achieve the goal? 
  • Who is involved? 
  • What stands in the way of achieving this goal?

 

2. Make goals measurable

You’ve probably heard the saying: ‘What gets measured, gets done.’

With a measurable goal, you and your clients can track progress – and enjoy the satisfaction of seeing their plans come to fruition. Make each goal as specific as: ‘I will save $X each week for Y months, invested at Z% – to save a deposit for an investment property.’

Wherever possible, encourage your clients to use apps like ASIC’s TrackMyGOALS to monitor progress. Having a visual record of their growth can help them stick to their plan – and enjoy the journey of meeting their goal.

 

3. Are they achievable?

The more achievable the goal is, the more likely your client will be motivated to stick to it. So check that the goal is realistic, and that they willing and able to put in the time and effort needed to achieve it.

 

4. Relevant

Is the goal relevant to your client – and will it help them live the lifestyle they really want? Is the effort worth it? For example, your client may be making extra repayments to pay off their mortgage sooner – but are feeling constantly stressed and struggling to make ends meet. Adjusting their repayments may mean it takes longer for them to get debt free – but gives them more money to enjoy their life today.

 

5. Timely

It’s no secret that a deadline can help people take action. And your clients are more likely to be able to tighten their belt (if they need to) if they know that the finish line is in sight. So put each goal into a timeframe – and try to stick to it.

 

Other smart tips

Once your client has their SMART goals defined, break them down into small, manageable and actionable tasks.

Encourage them to tick off each task as they achieve them. Check their progress during reviews to keep them accountable – and celebrate their successes. By focusing on the small wins, your client will be rewarded by the pleasure of achievement, and motivated to keep working towards their bigger goals.

 

1. Hub24 – The Adviser’s Best Interests Duty: Creating Better Advice, January 2019

 

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