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10 Questions All Financial Advisors Should Ask Their Clients

A financial advisor performs an instrumental role in a client’s financial journey. They can help their clients in numerous ways, from simple aspects like budgeting to seemingly complex issues like tax planning, estate planning, etc. Financial advisors deal with varied types of clients. Some of these may be experienced, while others may be complete novices. Therefore, they have to align their services according to the expectations and needs of their clients. Further, financial advisors also work with people of different ages and income levels. The risk appetites of clients can also differ.

Dealing with so many different people and needs can be confusing. The scope of error can also be high. Therefore, it is crucial for financial advisors to be clear about what they bring to the table and whether or not it matches the requirements of their clients. It is also vital for financial advisors to be clear about what the client is looking for from their association and deliver up to their requirements without any misunderstandings or lapses.  

Read below to find out some essential questions a professional financial advisor should ask their clients on their finances.

Ten financial planning questions to ask clients

Question 1: What is your ultimate financial goal?

The ultimate financial goal can be anything from a particular figure in the bank to an asset like a home. For the new generation of investors, it can also be to enjoy unique experiences like traveling or purchasing a Non-Fungible Token (NFT). Some people may dream of owning a business, while others can be happy with modest earnings but happy personal life. Understanding where your client comes from and what they dream of is essential to make sense of their investment attitude and point of view. Not everyone dreams of being rich in the conventional sense of the word and owning a big house or a fancy car. Different clients can see wealth differently, and their perceptions of financial success can differ. Therefore start by finding out their ultimate goal in life to get a better sense of their needs and general outlook towards money.  

Question 2: What books do you read on personal finance?

A lot of people gain financial knowledge from books and journals. There are several authors, investors, and blog writers, both offline and online. There are also many unique investment philosophies in the market. Each book can approach investing differently. By understanding what books the client reads, financial advisors can get an idea of how they look at investments. The type of books a person reads could inform the advisor on the client’s perspective and point of view. For instance, Warren Buffett, the philanthropist and investor, firmly believes in the buy-and-hold strategy. If a client reads Warren Buffet’s books or identifies with his investment philosophy, it would help the advisor better understand their client, and could also potentially influence the type of financial advice and recommendations the advisor offers the client.

Question 3: How much money do you make?

Transparency is critical in a client-financial advisor relationship. While this can be an upfront question, it is also one of the most important questions a financial advisor should ask. A client’s income can help financial advisors understand their investment budget. A client from a high-income group would have different needs from a low-income one. Likewise, the risk appetite can also vary across income groups. If a person makes good money, they would be more willing to take on risk than someone who is just about making ends meet.

When inquiring about the client’s income, it is also essential to ask about their sources of income. Find out more about the type of job – regular or part-time and the number of income sources – employment, business, part-time jobs, inheritance, etc. This can help financial advisors gauge the financial stability of their clients. Small businesses may not be as stable as big ones. Likewise, a part-time worker may not be as financially stable as a full-time employee.

Question 4: Do you have any dependents?

Personal life can tower over a person’s financial status. Clients who are married and have children may have more financial dependents than someone who is unmarried. Parents have additional financial burdens, such as their child’s higher education expenses, marriage, etc. If the client has been divorced, they are paying or receiving alimony. This can be critical to understanding a client’s cash outflow and inflow. Moreover, dependents also play an integral role in a person’s retirement goals. A married person may plan their retirement in tune with their spouse and their needs. This means there could either be two pension funds, two Social Security benefits, etc., for one household or a single pension fund and Social Security check supporting two individuals.

Likewise, parents would also want to include their children in their will. Therefore, the question of dependents is an essential estate planning question to ask clients.

Question 5: How do you like to spend your money?

Apart from understanding a client’s income and income sources, it is also essential to know how they spend their money. Ask the client if they like to travel, spend on food, clothes, shoes, or necessary expenses like rent, groceries, water, insurance premiums, etc. Additionally, analyze the percentage spent on essential and non-essential expenses to draw a pattern. People, who spend more on non-essential expenses like dining out, entertainment, luxury items, etc., may need more help with curbing their expenses and using their funds more optimally. On the other hand, people who spend their money on essential needs may require more help in earning more money to cover their basic needs. There should also be a balance between both types of expenses. As a financial advisor, it is important to help clients maintain this balance.

Question 6: What are your financial concerns?

People have financial concerns irrespective of a stable career and income. These concerns can range from not having enough funds for their short-term purchases like a car or a phone to issues like not having adequate health insurance. Some other financial concerns can include low income, a high debt liability, high dependence on credit cards, having too many mouths to feed, high taxes, low investment returns, and more. It is the financial advisor’s job to identify these financial concerns and accordingly devise ways to address them. The relevance and impact of these financial concerns can vary. In some cases, these concerns may also not be something to worry about. However, financial advisors need to understand how these concerns affect their clients and what they can do to assist them.


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Question 7: Do you have any debt?

There are a number of financial planning questions to ask clients on the topic of debt. Financial advisors can start by asking clients if they need loans. For instance, if a person is looking to buy a home and needs to borrow money for it, the financial advisor’s endeavor must be to minimize the need for a loan and employ other strategies like investing in high-return instruments. This will ensure that the client is able to accumulate the required funds with minimal dependence on a loan. The second thing to ask the client is if they have any existing loans. If the client is struggling with a lot of debt, the financial advisor can devise ways to lower their debt liabilities with suitable measures. This can also include credit card debt. Lastly, financial advisors can talk to clients about good and bad debt and help them use debt to their advantage.

Asking a client about their debt situation also helps the financial advisor understand how conscious or aware the client is about the implications of taking debt. It can indicate the client’s financial discipline and ability to manage their finances, too.

Question 8: What has been your experience with investing so far?

This question can help financial advisors understand the experience level of their clients. If the client has been investing for some years, they would be better equipped to handle high-risk investments compared to someone who is just starting out and needs first to understand the basics. Asking clients about their investment experience can also help financial advisors track their investment patterns and habits. It can help them know if the client invests consistently or if they have been regular with their contributions in the past. It can also help the financial advisor make a note of the types of investments the client has invested in the past. For instance, if the client is only investing in a company-sponsored 401k plan, they may need a lot more guidance from the financial advisor to invest in other instruments. However, if the client is investing in individual stocks, mutual funds, etc., outside of a 401k, they may possess relatively more knowledge of the financial market and may require a different approach.  

Question 9: Where do you see yourself ten years from now?

Financial advisors can draw a considerable amount of information by asking these simple questions and helping their clients reach their targets. Asking where the client sees themselves in the future gives the financial advisor an idea of the kind of life they envision for themselves. Sometimes clients may not be able to communicate their future goals and financial needs clearly. However, these questions can ease the communication barrier. For example, if the client answers that they see themselves living in a big house, the financial advisor can help the client start investing and saving in order to collect funds for a home. Likewise, if the client wants to be living a relaxed life in ten years, they may be hinting towards early retirement. Some clients may also envision working for themselves. In this case, they may need assistance in gathering funds for their business.  

Question 10: What is your ideal life like?

The ideal life can be a life with minimal tax liabilities. It can also be a life with no debt. Some people wish to create a flow of passive income, so they do not have to work ever. Some people want to work till they are 80 and never retire. Every client is unique and so are their needs. Getting an idea of their ideal life can offer financial advisors a glimpse into what they are looking for and, in turn, understand their attitude towards money. If the client wants to create a passive source of funds, the financial advisor can advise investing in commercial real estate. If the client wants to live a life with minimal tax liabilities, the financial advisor can recommend strategies like investing in a Roth retirement account, using tax loss harvesting, staying in a state with no income tax, using estate planning methods, such as lifetime tax exemptions, and more to reduce or eliminate the tax.

To summarize

These ten financial planning questions to ask clients can serve as a foundation for financial advisors. The answers to these questions can primarily help them figure out the client’s actual needs. They can also help them understand the basic personality, limitations, and expectations of the clients. This, in turn, can help them engage with clients and devise suitable investment plans for them. These questions can also help the clients openly discuss their needs, goals, and dreams. They are neither too direct nor too vague and offer the client enough room to be comfortable.

Financial advisors can make a note of these ten questions and use them to start their professional relationships on a positive note. If you’re an investor and looking for a suitable advisor to assess your financial requirements and offer suitable financial advice, consider using the free advisor match service. Answer a few simple questions about yourself and get matched with 1-3 vetted financial advisors that are suited to meet your financial requirements.

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The blog articles on this website are provided for general educational and informational purposes only, and no content included is intended to be used as financial or legal advice.
A professional financial advisor should be consulted prior to making any investment decisions. Each person's financial situation is unique, and your advisor would be able to provide you with the financial information and advice related to your financial situation.