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Financial Planning Questions You Should Ask Your Clients

To succeed as a financial advisor your focus should be more than just finance, investing, and a retirement plan. With the competition becoming fierce in the growing financial industry, you need an edge to set yourself apart from your competitors. That can be done by asking the right financial planning questions and providing your clients with a unique and extraordinary advisor-client experience. 

Your first and foremost goal should be to build an honest and loyal relationship with your client. Building a relationship requires effort from the initial interaction. Your early interactions must include more than just fact-finding or standard risk tolerance questionnaires, or formal information exchange. Your main focus should be your client and not just numbers and targets. 

Financial Planning Questions

To ensure you are asking meaningful questions, you need to prepare well in advance before kicking off the onboarding process. Find out the right questions that will help you understand and connect with your client the most. Find out some common pain points clients face when initiating a professional relationship with their financial planners. Are there queries that clients wish they were asked and aren’t being addressed by their advisors?

Asking Questions The Right Way

Just as it is important to ask the right questions, asking them the right way is extremely important too. Conversations need to have the proper nuance. You should take special care of the words you use and the way you use them. Articulate questions asked in an appropriate manner can stimulate the right emotions and help the client to divulge information that they may otherwise be hesitant or be uncomfortable sharing. 

Avoid asking questions that can simply be responded to with a “yes” or a “no.” Word them so that the client is required to share some details. Use phrases like “If you don’t mind me asking” or “To understand your concern better, I would also like to know… .”

By the time your client is in front of you being asked to share some details, you should have had a general sense of their personality after your previous interactions with them. Different people react to situations differently therefore, try to speak to them in a manner that they are comfortable with. For example, a wealthy businessman might favor a direct and forward manner of inquiry whereas a client who is unfamiliar with the financial jargon and having their first experience with a financial advisor would require you to speak in a more casual and simpler language. 

Sharing personal information with a stranger does not come easy. Plan the order of your questions such that they start with general ones while progressing into more detailed ones allowing the client to have some time to adjust and become comfortable with you. Make sure you don’t seem to appear to simply ask questions off a prepared list but are genuinely invested in the conversations.

All these specifics will allow you to personalize your service for the client and adapt your approach as needed to provide them with a unique experience that caters to their specific needs and concerns. To help you start off, I have listed the areas where your questions should come from and some queries you should consider addressing during the onboarding process to connect with your client better.

Interesting: Why Every Financial Advisor Should Adopt Digital Transformation

General Life Questions

It is best to start with such questions as they tend to be the general way humans tend to start conversations. Start with easy ones about their family demographic. Who they currently live with or whether they live alone. This will allow you to understand the kind of support system if any, your client has. Whether the financial concerns they have and the plan that will be devised later to address those concerns will be something they will be attempting alone or with someone. For example, a client with a drinking problem or gambling habit would require someone other than just you to help them address their financial problems and tackle them. 

Ask questions about their job or career and what their daily routine is. Find out how they generally spend their day and the hobbies and interests they have. Some hobbies tend to be more expensive than others. Have your questions designed to reveal what type of social life they lead and who are the most important people in their lives. 

Do they seem like the introvert type or perhaps they may be a shopaholic or someone who likes to party often.  Perhaps they are involved in charity work and offer donations regularly. Some people tend to be unaware that the activities they might have been doing in good faith might actually be detrimental to their income and savings plan. Whichever the case, your questions should help reveal such information so that you may plan a strategy that would be best suited for them. 

Past Experiences

It is essential you find out their not just current financial situations about how much they are earning or where their bank accounts stand (although that is important too) but about any past experiences they have had with financial advisors. Ask them why they chose you as their financial advisor. Choosing you may have been prompted by a specific reason. Have they had any bad experiences? Inquire on what happened and what they believe was the reason behind the negative experience.

Clients with bad past experiences might be coming with anxieties or cognitive biases that you need to be aware of. Perhaps your client is coming for the first time to ask for advice on handling finances. Ask what sort of concerns or worries they may have. To establish trust and confidence in the relationship, all these concerns should be addressed early on so that you can assure your client that this experience will not be the same. 

Current Relationship With Money

The kind of experience a person had with money in their past often greatly affects the way they handle money in their adult life. Some habits can be imprinted in a child by the way their parents handled money during their childhood years. While some may mimic the habits of their parents, others who did not have enough money or perhaps lived under those who were stingy can end up with psychological disorders that may lead to compulsive buying, overspending, pathological gambling or penny-pinching to name a few. 

"Most of us have money narratives from our childhood years, which color our present financial behaviours," says Christine Luken, certified financial coach and author of Money is Emotional. "As young children, we tend to internalize everything our parents tell us as the truth and this includes what they say about money."

Goals and Dreams

At the end of the day, the whole point of yearning for this relationship to succeed is to be able to achieve the financial goals you and client decide upon. However, in order to propose a plan of action for your client, you need to first know what dreams and hopes they aspire. Ask them what financial milestones they hope to achieve. Do they wish to travel? Buy a car or a house? Have them rank their milestones in order of importance so you can better understand what is important to them. 

Follow up by asking what your client life goals are. Where do they see themselves in 6 months? A year? 10 years? Ask them about their plans for retirement and how they envision spending it. Do they have anxieties or fears that keep them up at night? You need to know what your client’s financial stress factors are in order to devise a financial strategy that can help alleviate them. Have your client list areas that they consider need more attention such as investment, retirement planning, money management, etc find out where and why they think they need assistance handling finances in those areas. 

In Conclusion

A successful professional relationship is built on honesty, trust, respect, and understanding. The communication should be open and transparent from both ends and only then can it engender loyalty and loyalty means having a client that will stay committed to you long into the future. 

Asking the right questions will allow your client to become comfortable in sharing with you and will pave the way for good and fruitful conversations. They will give you in-depth insight into their personal lives, their relationship with money, their goals, dreams, priorities, and preferences. Therefore, carefully prepare questions that will help reveal the information you require about the client in order to prepare the best financial strategy for them.