In this example, we looked at an individual. This is also unrealistic. When developing an investment plan, you must determine if the potential client can support all of her dependents as well as herself.

That means inquiring as to:

  • marital status
  • number of children and other dependents
  • employment of client and client's spouse
  • are children are going to private or public school
  • how much they expect to pay for college and when those college educations begin.

It is also a good idea to ask the investor about her investment experience. In this example, the prospective client has some stocks and mutual funds, but she has more in cash equivalents, CDs and savings bonds. This is probably not a person with whom you need to discuss three-point arbitrage - at least, not immediately. Just talk stocks, bonds and mutual funds with her to start.

Lastly, and most tactfully, you need to ask a prospective client if she has made out her will. This might not affect whether you recommend a stock or a mutual fund to her this week, but it will definitely affect what advice you give her when she reaches the gifting stage.



Investment Objectives

Related Articles
  1. Financial Advisor

    When Are Mutual Funds Right for Your Client?

    Find out what factors determine whether mutual funds are right for your client, including risk tolerance, investment goals and tax implications.
  2. Financial Advisor

    How to Construct an Annual Review for Clients

    One of the best things that advisors can provide to clients is an annual review of their financial situation. Here are some guidelines.
  3. Investing

    How to Sell Mutual Funds to Your Clients

    Learn about the various talking points you should cover when discussing mutual funds with clients and how explaining their benefits can help you close the sale.
  4. Financial Advisor

    Manage Your Clients' Expectations

    You can't control how they react to the market, but you can help them understand the reality of the situation.
  5. Financial Advisor

    How to Break the Ice with New Clients

    Conducting an effective, initial client–advisor interview is an essential part of any advisor’s job. Here are a few tips on how to get started.
  6. Financial Advisor

    Advisors Should Be Ready for These 5 Questions

    Advisors should be prepared to provide answers to these common questions asked by prospective clients.
  7. Personal Finance

    When (And How) To Fire A Client

    Firing the clients who take more of your time and effort than the revenue they contribute is a great way to improve your bottom line.
  8. Financial Advisor

    How To Deal With (Seriously) Dysfunctional Clients

    Difficult, unreasonable and eccentric people seek financial planners too. Find out how to cope.
  9. Financial Advisor

    Losing a Client Is Not Always The End of The World

    Losing a client is never pleasant for a financial advisor, but sometimes this is a better outcome than continuing the relationship.
  10. Taxes

    Present Your Clients With A Year-End Review

    If you want to build a better rapport with your clients, this is a good place to start.
Frequently Asked Questions
  1. Where was the Dow Jones when Obama took office?

    Find out the value of the Dow Jones Industrial Average on the Jan. 20, 2009 inauguration of President Obama and how it has ...
  2. What is the formula for calculating weighted average cost of capital (WACC)?

    Weighted average cost of capital (WACC) is the average after-tax cost of a company's various capital sources, including common ...
  3. What is the functional difference between GDP and GNP?

    Find out the difference between GDP and GNP, and how each brings a different perspective to the meaning of economic success.
  4. What is the formula for calculating the current ratio?

    Find out how to calculate the current ratio and what that result can tell you about a potential investment.
Trading Center