10 Questions All Financial Advisors Should Ask

Asking the right questions can help advisors understand their clients’ needs

In the crowded financial advisory world, clients have many choices when it comes to hiring the investment professionals they trust to manage their assets. It’s therefore essential for advisors to do everything in their power to cultivate a deep understanding of their clients in order to win new business.

That starts with listening more than talking, and asking the right questions that will give you a window into your prospective clients' needs.

Financial advice is about a lot more than making investment decisions. It's about holistic financial planning, so prepare to learn everything about your clients' lives and help them find the right solutions that align with their values.

Key Takeaways

  • When meeting a client or prospective client, a good financial advisor asks the right questions in order to serve them best.
  • Advisors should cultivate a deep understanding of prospective clients’ needs, in order to gain trust.
  • Asking the right questions will get the client to do most of the talking, so that the advisor can better understand the client's needs.
  • Not all clients will know what to expect, so it is also important for the advisor to explain their services and philosophy.
  • A financial advisor-client relationship is a two-way street, and it is important for both parties. to work well together.

Here are ten questions that can help you win over even the iciest prospective clients:

1. "Can You Tell Me About Yourself?"

This open-ended question puts clients in the driver’s seat, letting them naturally articulate the most important elements in their lives, whether it’s career, children, or hobbies. They may discuss things you have in common, which might organically lead to a deeper conversation.

This should be an enjoyable exercise for you. After all, this is a customer service business, and if you’re not interested in learning what makes others tick, consider a career change.

Knowing about a client's family, professional, and personal life can help you pinpoint just where you can help. Do they own a business? Then maybe legacy planning or tax minimization is a conversation to have. Do they have children? Maybe talk about life insurance.

2. "How Can I Help You?"

Now is the perfect time for potential clients to identify their chief motivations for seeking you out. It’s also an ideal time for you to explain your breadth of services, and describe how our skill sets differ from other advisors.

Remember, you are in the business of advising clients and putting their goals before your own - that might mean putting them in a less expensive product with lower commissions or a mutual fund with a lower sales load. It may even mean turning them away.

When you know how to help them, make sure to stay focused and not try to up-sell them on unnecessary products or services that may not directly help them - or may even put them in a bind.

3. "Are You Currently Accomplishing Your Goals?"

This question helps you take a prospective client's temperature and manage their expectations moving forward. Spouses may disagree, which is perfectly fine, as it invites them to process their thoughts in a healthy and constructive setting. But no matter what their stated goals are, you should explain that you understand their perspectives and that you're eager to help. It’s wise to repeat their concerns back to them, to let them know you were paying close attention.

For example, you might say: "I understand your portfolio is underperforming its benchmark, and that you’re worried that you’ll be unprepared for retirement." Then give a hypothetical example of how you can help remedy their concerns.

4. "What Are Your Most Important Financial Concerns?"

Asking about a client's financial concerns can help an advisor get an idea of their worries and risk tolerance. It can also help the advisor choose investments that fit the client's preferences.

For example, many clients may worry about the value of their nest egg in the event of a market-wide recession, like the one that occurred in 2008. Understanding these concerns, a financial advisor might direct them to comparatively safe investments with low exposures to the sectors that the client is most worried about.

Many clients may have unrealistic expectations about what a financial advisor can do for them. The first interview is your chance to explain exactly what you can promise to your clients.

5. “What Are Your Most Important Non-Financial Concerns?”

Money is rarely a goal in itself—most people consider financial freedom as a way to reach some other objective, whether providing for their family, enjoying their retirement, or moving to an exciting new career. The hard part is creating the financial bridge to achieve those goals.

That's where the financial advisor comes in. By understanding the client's dreams and goals on an emotional level, the advisor will be more able to create a financial plan to help them save and invest the money they will need to turn those goals into reality.

This is also the chance to learn about client values that might not come up otherwise. For example, you might learn that a prospective client has strong environmental or ethical values. That client might be well-served with a portfolio focused on ESG investments (environmental, social, and governance issues) that align with their values.

6. “How Do You Make Important Financial Decisions?”

Everyone has their own way of handling finances. Some people are natural accountants, tracking their expenses and deadlines on well-organized spreadsheets. Others try to delay making decisions until the last minute, in order to avoid the anxiety associated with making a hard decision.

Either way, understanding this aspect of a client's personality can help their advisor work with them. The more involved advisors may want more detailed and frequent updates about their portfolio, while others may be satisfied with a gentler touch.

7. “How Do You Envision Your Life in the Future?”

Many financial professionals tell their clients to imagine their lives a set period into the future, whether one year, five years, or ten years down the road. This allows them to set concrete goals for their clients, as well as a roadmap towards achieving them.

For example, if a client imagines himself or herself buying a home, the advisor could help them start saving and investing for a down payment. If they envision an early retirement, the advisor could direct them to the best tax-advantaged retirement plans.

$128 Trillion

The total assets managed by all financial advisors registered with the Securities and Exchange Commission, as of 2021.

8. “Have You Worked With a Financial Advisor Before?”

This question is important for two reasons. First, clients who have never worked with an advisor before may find the experience confusing or intimidating, especially if they do not know what to expect. Understanding these concerns can help the advisor explain the services that they provide.

For those clients who have worked with an advisor before, this question can help set the advisor apart from their previous experiences. The advisor can ask probing questions about the previous advisor and explain how their investment philosophy and process may be different.

9. “What Would Make This Financial Advising Relationship Successful for You?”

Everyone has a different idea of success, and it is important to find out what the client hopes to get out of their working relationship. Some clients want to be as involved as possible, giving regular feedback to their advisor about the performance of their investments. Others might prefer a more hands-off approach and are happy simply knowing that their money is in capable hands.

Either way, understanding the client's preferences are key to a successful relationship. It is also possible that the client has unrealistic goals, or is simply a bad fit for the advisor. In this case, this question can help both parties decide if they can work together successfully.

10. "What Would You Like the Next Step to Be?"

No matter what they say, you should complement their suggestion with an idea of your own—even something as innocuous as: "I'd like to suggest that we meet again and go over some details of ways I may help." And then book the next appointment, then and there.

Finally, shake hands or do whatever feels comfortable before you and your new client say goodbye.

Why Do Financial Advisors Ask Open-Ended Questions?

Financial advisors use open-ended questions to get the clients talking about their dreams and goals. Ultimately, it is the client's satisfaction that matters the most, so it is important for an advisor to get a clear idea of their values, objectives, and risk profile.

What Kinds of Clients Do Financial Advisors Have?

Financial advisors can have all kinds of clients, from high net-worth individuals and people approaching retirement to corporations and mutual funds. There are also many different services that a financial advisor can offer, such as tax preparation, insurance products, or securities advice.

How Do Financial Advisors Find Clients?

There are lots of ways to find new clients, but many financial advisors rely on tried-and-true methods of reputational networking. Wealthy clients tend to be well-connected, so a single strong relationship can potentially generate many new leads. Larger firms may also benefit from targeted advertisements, community involvement, and social media.

The Bottom Line

Before you meet with prospective clients, you’re essentially a stranger to them, and trust must be built from the ground up. This can be achieved by engaging with individuals in a sincere and thoughtful manner, where both parties are given an equal voice.

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  1. CFA Institute. "ESG Investing and Analysis."

  2. Statista. "Total Assets Under Management (AUM) of Investment Advisors Registered With the US Securities and Exchange Commission From 2000 to 2021."

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