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Sunday, October 17, 2021

Suggested New Client Questions for Financial Advisors

There are a lot of questions must be asked by advisors when they meet with a qualified prospect or a new client. Here are a few that are quite important, along with some reasoning behind them.

Background Questions

  • Have you ever used an advisor before?
  • Why do you think you need professional help?
  • Why did you choose me?
  • What would it take for you to fire me?

These types of questions will allow you to discuss and remove any unrealistic expectations at the beginning of the relationship. This will help to prevent any disagreements in the future because you will always be able to refer back to what was discussed during that first meeting. Another advantage of these types of questions is that it allows the advisor to have the client to start to think about the value in which the advisor provides.

What is your risk tolerance?

Knowing the risk tolerance of a client helps to set the path to designing a comprehensive plan to achieve financial goals. It must be clear to a client that additional investment rewards come with more risk asserted in the investment portfolio. It is utterly impossible to make a lot of money without taking much of the risk because there is no magic bullet when it comes down to investing. An advisor can prepare various asset allocation options to go over with the client explaining potential risk and reward ratio based on the financial goals set to be achieved.

Additionally, risk tolerance must be explained in the frame of the big picture taking into consideration other individual factors like age, income, family status, financial goals, etc. This is important since the risk profile would be different for a young professional who starts on the path to building an egg nest than someone who is approaching a retirement with enough wealth accumulated in their accounts.

Where do you currently stand?

Any client is a person looking for advice on their investments, so the first questions asked should be about their current investment portfolio, whether they are invested into a 401(k) plan or if they look to roll over into an individual retirement account (IRA). Knowing your client’s investments is a key to successful communication, as you’ll be able to provide a high-quality assessment of their risks and give a good piece of advice on the improvement.

When you get your clients’ portfolio you can kindly provide your help and suggest any steps that could potentially save their wealth from a crash. As soon as they’re convinced and start trusting you, you’ll get their attention and they’ll be more likely to sign a contract with you. Don’t hesitate to share some free advice on the first step of your communication, as trust is worth more than money, and successful communication is the key to success.

Build trust through questions

When it comes to interaction with a prospect or a new client establishing a relationship based on trust is impeccable. Yet while you cannot build trust in one day, you can start building a foundation for it from the start. In addition, to your usual questions about their financial vision and goals, make room for questions with a light scent of psychology to establish a good advisor-client relationship. For example, to get your client to open up you may start by asking about their vision of a good advisor-client relationship.

This will reveal if you blend well to work with the client and what steps to take towards a comfortable relationship. Open-ended questions about a client’s dreams/hopes will enable you to learn more about how you can help your client. Also, ask your new client what keeps them up at night. This way you will help then to prioritize top concerns and help yourself when thinking of a plan tailored for that person.

Side questions to get to know their values and hobbies will also work well to reveal the type of person your client is.  These are just a few general suggestions that are a great first step in establishing a long term relationship with new clients for years to come.




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