Asking the Right Questions Can Help Advisors Understand Their Clients’ Needs
Financial advice involves a lot more than managing investments, and advisors have to be far more than personal bean counters. When meeting with new clients or those interested in your services, it’s crucial for financial advisors to ask the right questions so they better understand not just their client’s finances but also their goals and values.
“When I start off new client relationships, it’s really important for me to get to know my clients as people.” Carla T. Adams, a financial advisor and founder of Ametrine Wealth in Orion, Michigan told us. “Rather than starting with gathering the factual data about their finances, I ask them to tell me about themselves. …The more they are able to open up to me about their hopes and dreams, the more I am able to help them achieve these goals from a financial perspective.”
David Flores Wilson, a certified financial planner at Sincerus Advisory in New York City, agreed. He stressed the need to understand a client’s personal background before anything else. “Asking about a client’s goals and financial situation is very important, but it does put the cart before the horse. I usually start off asking them to tell me their personal story,” he said. “Their story gives insightful context about what’s important to them, and what issues we should tackle first.”
By asking the right questions, financial advisors can build stronger, more effective relationships that help them achieve their financial goals. In this article, we list 10 essential questions successful financial advisors say are important to ask new and prospective clients.
1. “Can You Tell Me About Yourself?”
You need an open-ended question that puts clients in the driver’s seat, letting them articulate what they think is most important in their lives, whether it’s their career, family, or hobbies. However, clients often start off a bit skittish. Wilson said something we’ve often heard from financial advisors: they frequently need to reassure clients in ways that are more likely to bring to mind therapeutic encounters. “Oftentimes, I’ll remind the prospect that our discussions are a judgment-free, confidential space,” he said. “I’ll mention that not even the person who referred them will know about anything we talk about.”
Financial advisors need to be as creative as any therapist at finding questions that get clients to open up. It’s easy to see why: knowing about a client’s family, professional, and personal life helps you pinpoint where your help is most needed.
“One of my favorite questions that I’ve started asking new clients is what money was like for them growing up. To my surprise, I rarely have to prompt them with additional questions on this topic to get them talking,” Adams told us. “Clients open up when answering and I am always fascinated to hear what they have to say. It gives me great insight into the feelings, fears and blind spots regarding money, which guides me on how I present information and provide recommendations to them.”
Bridget V. Grimes, founder of Wealth Choice in Coronado, California, a firm that focuses on executive and professional women, uses worksheets as well as open-ended questions to get more background on a person. “We start with asking clients, ‘What does your ideal life look like?’ To help them with this, we provide a worksheet we call ‘Passions and Pursuits.’ It breaks their financial intentions down into the personal, professional and financial.”
Wilson’s approach is even more open-ended. “In prospect meetings, I want to know how they got to where they are. I usually start off asking them to tell me their personal story. This can go in a lot of different directions, as some will detail their childhood and their relationship with money, while others will jump right into their current pressing issue. Their story gives insightful context about what’s important to them, and what issues we should tackle first.”
He uses follow-ups to ensure he’s getting at what’s most meaningful. “At several points in the initial conversation I’ll ask, ‘So what else is important to you?’ to peel deeper beyond their initial answers. Once they are a client, we usually run them through a values exercise where we show them 50 values (family, freedom, philanthropy, etc) and ask them to rank their 10 most important values.”
2. “Have You Worked With a Financial Advisor Before?”
This is important to know for two reasons. First, clients who have never worked with an advisor may find the experience confusing or intimidating. Understanding these concerns can help the advisor explain the services that they provide.
It’s also the case that many people don’t know what financial advisors do and aren’t used to discussing their personal finances with others. “A lot of people are nervous talking to financial advisors, whether it’s the first time they’re working with a financial advisor or perhaps because they had a very transactional relationship with a previous financial advisor,” Adams said.
For clients who have worked with an advisor before, this question can help you say what you’ll do differently. You can then ask about previous advisors and explain how their investment philosophy and process may differ.
Adams suggests you can show how you’re different in ways that go beyond listing your services. “For clients that live locally, I like to meet them at their homes, at least in the beginning, if they are comfortable. I can quickly notice a change in comfort level when I meet clients in their own homes versus in an office or virtually,” she said.
3. “How Can I Help You?”
After learning about your client’s background, you’ll want to move on to what brought them to you in the first place. That means understanding their specific needs and expectations from you. Jordan Naffa, director of financial planning at Arista Wealth Management in Las Vegas, said he uses a full questionnaire, one that directly asks, “What are your expectations from an advisory relationship?”
Like others we spoke to, Grimes said she tries to elicit this information indirectly by asking, “What steps have you taken prior to now?” She said, “Their answers will help us understand where we are starting from.”
By asking in some way how you can help, you demonstrate your commitment to tailoring your approach to address your client’s specific needs. This can also be a moment to manage expectations and ensure that both you and your client are on the same page from the beginning. It’s also the perfect time to explain how your services meet their needs.
4. “What Are Your Most Important Financial Concerns?”
Asking about a client’s financial concerns can help you get an idea of what might keep them up at night. This will be key to assessing their risk tolerance, which will help you decide which investments are best for them.
“We want to take stock of their current financial situation so we can identify any gaps, and then provide observations and suggestions to close those gaps,” Grimes said.
5. “What Are Your Most Important Non-Financial Concerns?”
Money is rarely a goal in itself—most people consider finances a way to reach some other objective, whether providing for their family, enjoying their retirement, or changing careers. The work of financial planning, of course, is to bridge where people are and where they want to be. This includes dealing with their nonfinancial concerns.
By understanding the client’s dreams and goals on an emotional level, the advisor can create a financial plan to help them save and invest the money they need to turn those goals into reality.
This is also a chance to learn about client values that might not come up otherwise. For example, you might learn that a prospective client is very concerned about the environment. That client might be well-served with a portfolio focused on environmental, social, and governance issues that align with their values.
6. “Are You Accomplishing Your Goals?”
This question helps you take a prospective client’s temperature and manage their expectations. Spouses and partners may disagree in front of you, which is perfectly fine, as it invites them to process their thoughts in a healthy and constructive setting. But no matter their stated goals, you can explain that you understand their perspectives and are eager to help.
It’s wise to repeat their concerns to let them know that what they said was important to you (and to ensure you understood them perfectly).
Grimes said it’s also crucial not to treat their careers simply in terms of the salaries they receive. “Because a client’s income is such an important determiner of their ability to save, we ask, ‘What is your career plan?'” she said. “We believe every one of our clients should have a plan around their business or career, just as they should with their money. We encourage them to work with business coaches and think through where they want to be in one, three, five years.”
7. “How Do You Make Important Financial Decisions?”
Everyone has their own way of handling finances. Some people are natural accountants, tracking their expenses and deadlines on well-organized spreadsheets. Others try to delay deciding on anything until the last minute, and some never decide anything.
There are different ways to find out how clients make decisions about their finances. Grimes said one way to get at this is by asking how much they know about their spending. “One of the key questions we ask in the process of analyzing where they are now financially is, ‘Do you know where your money is going?’ We have found more times than not that clients have no idea where they are spending money, whether they have a monthly surplus or not,” she said.
She said she then follows up by bringing home how this might affect their ability to align their spending with their values and goals, asking “Is your money going toward the things that are most important to you?” “This is where a client needs to make a choice about saving for things they said are important to them, rather than just spending it. From this discussion, we are able to determine how much they are willing to save toward their financial intentions,” Grimes said.
8. “How Do You Envision Your Life in the Future?”
Many financial professionals ask their clients to imagine their lives at some point in the future, whether one year, five years, or 10 years down the road. This allows them to set concrete goals for their clients, as well as a road map toward achieving them.
For example, if a client wants to buy a home, the advisor could help them start saving and investing for a down payment. If they envision an early retirement, the advisor could direct them to the best tax-advantaged retirement plans.
But it also helps you understand what they expect of your relationship. Grimes said, “Before we dig into numbers and gauge their priorities, we’ll ask, ‘If we were to meet three years from now, what would have to have happened for you to feel happy with your progress?'”
9. “What Would Make This Financial Advising Relationship Successful for You?”
Everyone has a different idea of success, and it’s essential to find out what the client hopes to get out of this working relationship. Some clients want to be as involved as possible, giving regular feedback about the performance of their investments. Others prefer a more hands-off approach and are happy simply knowing that their money is in capable hands.
Either way, understanding the client’s preferences is critical to a successful relationship. A client might also have unrealistic goals or be simply a bad fit for the advisor. In this case, this question can help both parties decide if working together is a good idea.
10. “What Would You Like the Next Step to Be?”
After discussing your client’s background, goals, and finances, you should mark out the path forward. Asking your client what they would like the next step to be demonstrates your commitment to working collaboratively and ensures you are aligned with their priorities. This also begins to foster a sense of trust and partnership that will serve as the foundation for a successful long-term relationship.
Once they’ve answered, you can then outline the next steps in your working relationship, such as gathering additional information and reviewing their investments. You’ll also want to set up your next meeting right then and there.
Why Do Financial Advisors Ask Open-Ended Questions?
Financial advisors do this because this is the best way to get clients to discuss their dreams and goals. Ultimately, the client’s satisfaction matters the most, so an advisor needs to get a clear idea of their values, aspirations, and risk profile. But it’s also simply a part of relationship-building. “I find that clients and prospects find it more enjoyable when I’m actively listening, which helps us to build a better connection,” said Gregory G. Guenther, a financial planner at Grantvest Financial Group in Matawan, New Jersey.
What Kinds of Clients Do Financial Advisors Have?
Financial advisors serve all kinds of clients, from high-net-worth individuals and people approaching retirement to corporations and mutual funds. They also offer many different services, including tax preparation, insurance, and securities advice.
How Do Financial Advisors Find Clients?
There are many ways to find new clients, but financial advisors commonly rely on tried-and-true methods of building a reputation and networking. Wealthy clients tend to be well-connected so that a single strong relationship can generate many new leads. Larger firms may benefit from targeted advertisements, community involvement, and social media.
The Bottom Line
Asking the right questions is essential to building a strong, trusting relationship with your clients and developing a comprehensive understanding of their finances, goals, and values. By starting with open-ended questions that encourage clients to share their personal stories and experiences, you can create a welcoming environment for all that follows.
As you guide your clients through identifying their goals, assessing their finances, and developing a plan to achieve them, it’s crucial to be an active listener as they describe their concerns and aspirations. Ultimately, the key to being an effective financial advisor often lies in asking the right questions. By incorporating these 10 questions and their variants into your initial client meetings, you can lay the groundwork for a rewarding partnership.
