How Can Advisors Keep Their Clients Engaged Toward Goals?

Executive Summary

Behavioral finance is a field that explores the psychological factors influencing financial decisions. It recognizes that humans are not always rational when it comes to money, and emotions can significantly impact financial choices. One powerful tool that intersects behavioral finance and personal finance is clearly-defined progress tracking. By tracking their financial progress, clients can stay motivated, engaged, and focused on achieving their goals. In this article, we will delve into the concept of progress tracking, its benefits, and how it can expedite the journey toward financial objectives.

The Psychological Impact of Progress Tracking

Human psychology plays a crucial role in financial decision-making. People often struggle to maintain discipline and focus when working toward long-term goals, such as retirement savings or debt reduction. Progress tracking serves as a psychological motivator by providing tangible evidence of advancement. When individuals see that they are making progress, no matter how small, it triggers a sense of accomplishment and reinforces positive behavior.


1. According to a study by the American Psychological Association, individuals who track their progress toward a goal are 76% more likely to achieve it.
2. A survey conducted by Fidelity Investments found that 78% of people who tracked their financial goals regularly reported feeling more confident about their financial future.

Clients agree - By tracking their financial progress, clients can stay motivated, engaged, and focused on achieving their goals. In fact, more and more clients prefer this type of financial accountability over investment recommendations.

How to Clearly Track Progress

Progress tracking can take various forms, including visual representations, spreadsheets, or dedicated software applications. The key is to create a system that allows clients to monitor their journey towards financial goals in real-time. Here’s how it typically works:
Set Clear Goals: The first step is defining specific, measurable, and time-bound financial objectives. Whether it’s saving for a down payment on a house, building an emergency fund, or retiring comfortably, clarity in goal-setting is crucial.


Monitor Regularly: Clients should regularly update their progress toward these goals. For instance, if the goal is to save $50,000 for a down payment in five years, they should track how much they have saved each month and compare it to their target.


Visualize Progress: Visual aids, such as charts or graphs, can be powerful motivators. Seeing the gap between their current position and the desired goal can inspire clients to adjust their financial behaviors to close that gap.


Celebrate Successes: Recognize and celebrate achievements along the way. Whether it’s reaching 25% of the savings target or paying off a significant portion of debt, acknowledging these milestones reinforces positive behavior.

Benefits of Progress Tracking in Behavioral Finance

Increased Motivation: Tracking progress creates a sense of achievement, boosting motivation and discipline. Clients are more likely to stay committed to their financial plans when they can witness their journey unfold.


Enhanced Decision-Making:
When clients regularly review their financial progress, they are more inclined to make informed decisions. They become more aware of how their choices impact their goals and are less likely to make impulsive, emotionally-driven financial moves.

Adaptability: Progress tracking allows clients to adjust their financial plans if necessary. If they notice they are falling behind, they can identify areas where they can cut back or increase their efforts to get back on track.


Emotional Stability: During market volatility or unexpected financial setbacks, progress tracking can provide emotional stability. It reminds clients of the progress they’ve made, reassuring them that they are on the right path despite short-term fluctuations.

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