Financial Advisors: Essential Tips For Talking to Clients

Financial Advisors spend a lot of time giving their clients advice on how to invest their money, but they often forget to listen to their clients.

Each individual client has different needs and concerns that need to be addressed. But without carefully paying attention to those concerns, advisors often miss important information that may help them to best serve their clients and protect their clients’ financial futures.

That’s why it’s important for financial advisors to learn how to listen more to their clients and to ask more questions before they start to offer any advice. Financial Advisors need to focus on responding to their clients’ personal needs, rather than just focusing energy on selling their clients on products or investment strategies, even if they believe those strategies may be beneficial over the long term.

Starting a Conversation

Before meeting with a prospective client, advisors should set up an agenda to follow during their client meetings — and stick to it. This will help to better manage their clients’ expectations and to make sure that the meeting stays focused and on track. Advisors should also send their client a copy of the agenda a few days before the meeting so that the client will have time to add their own topics or issues to the agenda that they may want to bring up and address during the discussion.

It’s a good idea for advisors to start a meeting by asking their clients open-ended questions. They should then allow the client the time that he or she needs to assess their own unique financial situation and to look at what some of their future financial needs may be. Advisors should be sure to take meticulous notes when their client is answering so that they can review them and make sure that they really understand their client’s concerns. The advisor should then write a letter to their client, which includes both the questions and issues the client raised at the meeting, as well as some helpful recommendations for solutions for the client’s concerns. 

While open-ended questions may at first be uncomfortable for some clients to answer, most people start to become more comfortable with this line of questioning as they get used to it,and end up appreciating the interest the advisor is showing in their current situation and their future. Some of the questions asked may center on the client’s family situation, career goals and his or her basic plans for financial independence in the future.

Advisors should also pay attention to their client’s body language when answering these questions. If the client seems disinterested or uncomfortable with the line of questions they are being asked to answer, the advisor should change tactics.

In most cases, however, clients are open to talking about themselves and their goals and are appreciative of the advisor’s interest in their situation. They may also end up giving their advisor some insight into how they can better serve them or point them in the right direction, in terms of achieving their financial goals.

Learn Retirement Goals

Advisors should be sure to ask their clients how they foresee their retirement. The advisor should ask their clients where they see themselves and their financial situation in the next five years, the next ten years and so on. They should also find out if the client has any particular objectives for managing their wealth in the future. In this way, clients can start to assess the probability that they will be able to attain their retirement goals when they reach the age at which they hope to retire.

Also of interest to an advisor should be whether or not their client has hired any other financial professionals to work with them, such as accountants and insurance salespeople. They should find out if their client is pleased with the services they are receiving from these professionals and if not, offer some alternatives. This information will also help the advisor gain insight into their client’s investment strategies and goals. Again, it all starts with listening to a client’s concerns, before talking or offering up solutions.

Ask First, Sell Later

While an advisors may be tempted to offer or suggest that their client invest in certain products and solutions that will also end up being lucrative to the advisor, it’s important that the advisor clearly asses the clients own particular needs and offers them only those products that are tailored to those specific needs.

In fact, an advisor should treat each client meeting as if it’s the first time that he or she is meeting with this client. By starting the meeting off with a line of questioning, the advisor may hit upon some new information that will lead him or her to some more valuable information about the client. The advisor will gain new perspective on what the client is looking for and then will be able to better offer up new investment products and services, which will be helpful to the client in terms of reaching their financial goals.

The Bottom Line

Advisors need to ask their clients open-ended questions and show a clear interest in their clients’ specific situations. In this way, they can tailor their advice to that client’s particular needs, risk tolerance, and the way in which the client sees their financial future playing out. 

Source: Investopedia

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