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 Impress Clients: The First Meeting

    When 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.
  6. Financial Advisor

    How To Deal With (Seriously) Dysfunctional Clients

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

    When to Really Put Your Clients' Interests First

    Advisors and clients alike are best served when a client's revenue is growing. But there may be some cases when taking a small hit is best for the client.
  8. 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.
  9. Financial Advisor

    3 Reasons to Fire Your Advisor

    There is no reason for a client to stay with a financial advisor who is not serving his or her needs. Here are some red flags to look out for.
  10. Financial Advisor

    How to Handle Your First Meeting with a Client

    Here's what financial advisors should do in an initial client meeting to start off on the right foot.
Frequently Asked Questions
  1. Why Do Most of My Mortgage Payments Start Out as Interest?

    Fear not: Over the life of the mortgage, the portions of interest to principal will change.
  2. What is the difference between secured and unsecured debts?

    The differences between secured and unsecured debt, and how banks buffer risks associated with each type of loan through ...
  3. How Many Times has Warren Buffett Been Married?

    Warren Buffett has been married twice in his life, but the circumstances surrounding the marriages were unconventional.
  4. What's the smallest number of shares of stock that I can buy?

    Many people would say the smallest number of shares an investor can purchase is one, but the real answer is not as straightforward. ...
Trading Center