15 Financial Advisor Questions to Ask Your Clients
With all the numbers Certified Financial Planners (CFP) deal with day-to-day, it’s important to remember that at the end of it, we’re dealing with a human with their own personal goals and interests.
As a financial advisor, it’s important for you and your client to have a relationship based on trust. Guiding them toward financial decisions that are aligned with their lifestyle and interests will improve your value as an expert in your client’s eyes.
Open and honest communication will help you to learn more about your clients, which in turn will help you create more robust and holistic financial advice that will suit their lifestyle and bring satisfactory results. Asking the right questions will help you form a better understanding of how to improve your client’s quality of life.
In this article, we’ll cover 15 financial advisor questions to ask clients so you can learn everything you need to offer sound financial advice.
15 Financial Advisor Questions to Ask Your Clients
Here are 15 open-ended questions an advisor should ask to create better financial plans for clients. Try asking these important questions during your next consultation and see if they help you get a clearer view of what your client needs on their financial plan.
1. What are your current financial concerns?
Most new clients start looking for a financial planner after they notice a problem with their financial situation.
The answer to this question is why you got hired in the first place, so whatever the client says here should be your main focus. Knowing the most pressing issues they have at the moment will help you figure out what they value most and what they want out of the relationship.
2. What are your short- and long-term financial goals?
Assuming what your client needs without clear communication is one of the most common mistakes financial advisors can make.
True, your job is to give direction and plan your client’s milestones, but at the end of the day, what they want and how they want to grow their money is up to your client. It’s important to know your client’s long- and short-term goals so you can create a financial plan that suits them best.
For example, your client might want to retire in a quiet European city or make enough money so their children won’t have to work ever again. The plan will be different for each of those cases, and their financial goals will point you toward the best course of action.
3. What do you hope to gain from financial planning?
If your client has worked with a financial advisor before, they will certainly have expectations. Asking this question helps you uncover what kind of results or experience they’re looking for in your advisor-client relationship.
Even if they’ve never worked with an advisor before, they might still have expectations based on research they may have done previously.
Either way, it’s a great opportunity to explain briefly and simply what it is that you do. For some clients, the experience may be confusing or intimidating. Having knowledge of these concerns can help start on the same page as your client.
4. What is the latest update on your current financial situation?
Clients are typically asked to share at least some of this information during intake. However, asking them this question might uncover some important information that they forgot to include. Confirming that the data you have is up to date is necessary to make sure that the advice and plan you come up with are relevant to their present situation.
Beyond just updating the information, the answer might open other topics, such as recent life events that caused a recent financial change — which might cause other changes that your client isn’t aware of yet.
5. Who are you financially responsible for?
Knowing who your client is financially responsible for is some of the most important information you can ask for during your consultation. Advice for someone with a spouse and a child to take care of will be vastly different from the advice you should give to someone whose only financial responsibility is themselves.
6. Are there any major life changes you predict for the future?
Most of your clients don’t even realize that you need to know about future changes to make a more robust plan. After all, these changes haven’t even happened yet.
Being warned of any surprises that might throw off your client’s financial plan makes it easy for you to accommodate those changes in their financial plan. For example, if they’re planning on moving, welcoming a new family member, receiving a promotion within the year, or retiring soon, their financial plan may change.
Everyone’s lives are constantly changing. While we can’t predict these changes, your client might have plans or expect significant changes to happen in their life in the future. It’s important to be aware of them beforehand, as it puts you in a better position to plan and prepare for your client.
7. Do you have an attorney, accountant, or insurance agent?
Collaborating with people your client works with gives you a clearer view of their financial status. Knowing who to contact to ask additional questions is necessary if you’d like someone to share in-depth information with you.
While your client might inform you of what these professionals said, they might not be interested in the technical details and nuances of these changes. Knowing how to reach the source and verifying the details on your own is necessary sometimes.
8. What are you passionate about in life?
Understanding a client’s passions will help you create advice and plans that are more aligned with their interests and lifestyle. If you’ve had some time to build your relationship, you may even want to try probing further and find out whether there are certain things — besides money — that they value highly.
If they’re keen to answer, really listen. This will make your client feel valued and give you insight that will improve your ability to plan according to their interests. This is how you can make the most impact on their quality of life as a financial advisor.
9. What has your relationship with money been like?
It’s unwise to assume that everyone adopts a similar outlook as you do. People see and handle money differently — some scrimp, and others are big spenders. Knowing how your client sees their money helps you understand where they are coming from and therefore aids you in how to best formulate a plan that resonates with them.
10. What type of investment portfolio loss would make you nervous?
Asking this question will tell you how much of a risk appetite your client has. Knowing how much they could stand to lose helps you plan an investment strategy that’s more aligned with what they are comfortable with.
For example, you can steer conservative (risk-averse) clients who are not comfortable with taking volatility and huge losses towards mutual funds, REITs, and stock indices. Clients with higher risk tolerance, on the other hand, might prefer high-risk-high-reward investments like cryptocurrencies and start-ups.
11. Do you currently live off a set budget?
Having an insight into their current budget helps you understand where they are spending their money. Hearing your client talk about their budget might also help you understand what kind of priorities they have, so you can make a plan that caters to this.
To help your clients, you need to know how they spend their money. This question gives you insight into how they handle both income and expenses, which in turn will help you understand what's important to them. If they have no budget, then that may be one of the first tasks you have to tackle.
12. Are you invested in the stock market?
Knowing where all your client’s assets are is essential if you’d like to provide relevant advice. Having this information also lets you factor in your client’s assets in the stock market. Additionally, knowing your client’s investment philosophy allows you to prepare a backup plan that will help you advise your clients on how they should manage their finances in case the market crashes.
13. What stressors keep you up at night?
Money can’t buy happiness, but a lack of money causes problems for most.
Asking this question lets you understand where to focus your client’s finances to help you alleviate this pain.
For example, your client might be worried about the possibility of being laid off in the coming months. In this case, what they’re actually worried about might be not only being able to keep up with their living expenses. Maximizing their emergency fund and reassuring them that they’d at least be able to dig into it for a few months helps you alleviate that stress for them.
14. What does retirement look like to you?
A prequel to the popular question, “What will be your monthly expenses in retirement?” This question makes it easy for clients to envision the kind of environment they’d like to live in as retirees.
Asking for a budget might give you material for a more concrete plan, but rephrasing it makes it easier to create a plan that’s more flexible and aligned with your client’s life goals after retirement.
15. What legacy would you like to leave?
This question is especially necessary if you’re doing retirement planning for your clients. The legacy they’d like to leave behind is part of the end goal of your financial planning journey. This information will help you when you’re discussing changes in their life plan, such as insurance, retirement funds, or adding a new family member.
Track Client Answer and More with Asset-Map
At a glance, asking the right questions doesn’t seem like a necessary skill for a financial professional. However, knowing what to ask and when to ask them can open up a number of different opportunities that will help you improve your client’s quality of life.
Asking these questions, and relevant follow-up questions, are important to make sure that you’re guiding your clients towards a decision that will help your clients live their best lives according to their own standards.
That said, this is a lot of information to take in. Not to mention the fact that the answers may change as your clients experience changes in their lives.
You’ll want to record their answers, as well as the evolution of said answers, to keep each financial plan as accurate and up-to-date as possible. Fortunately, financial planning software can assist you in tracking this information.
Asset-Map helps you record every answer, as well as the evolution of your clients’ priorities, in one easy-to-understand financial platform. Stay updated on your clients’ priorities and tendencies within a single glance of your visual map.
Schedule a demo today and discover how Asset-Map can assist your advisory firm in managing clients’ financial plans with ease.