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.
Financial AdvisorFirst impressions count, so prepare well for your first meeting with a client. Get to know as much as you can about the person and be ready to answer questions.
Financial AdvisorFind out what factors determine whether mutual funds are right for your client, including risk tolerance, investment goals and tax implications.
Financial AdvisorOne of the best things that advisors can provide to clients is an annual review of their financial situation. Here are some guidelines.
Financial AdvisorConducting 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.
Financial AdvisorYou can't control how they react to the market, but you can help them understand the reality of the situation.
InvestingLearn 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.
Financial AdvisorWhen meeting a prospective client you don’t want your first impression to be your last. Here are some tips to make sure there's a second meeting.
Financial AdvisorAdvisors should be prepared to provide answers to these common questions asked by prospective clients.
Financial AdvisorDifficult, unreasonable and eccentric people seek financial planners too. Find out how to cope.
InvestingLearn how to quantify each client's specific dreams and create a realistic financial plan.