THE SITUATION

A prospect enters your office.

After some initial questions,you’re confident he’ll exceed your asset minimum. But you’ve got the nagging feeling he’s more trouble than he’s worth.

How do you confirm what your gut says?

Asking the right questions means you’ll get real answers that help you build a productive advisor-client relationship—or sidestep a potential landmine.

 

FOR EXAMPLE:

ASK
How do you see us working together?
NOT
How much do you have to invest?

ASK
What have been your best experiences with advisors?
NOT
Why are you switching advisors?

ASK
How much detail would you like?
NOT
Are you going to take my advice?

ASK
What do you expect from your financial advisor?
NOT
Do you expect me to time the market?

When you ask the wrong questions, the conversation ends quickly. And, lacking information, you may take on a prospect who doesn’t truly fit. Perhaps they were referred by a big client—a good sign, but not foolproof—or just left a major competitor, making it tempting to gain the business.

Further, the wrong questions prevent you from building rapport that could be handy later; say for a prospect who has the earning potential to one day reach your minimum.

To prepare for the meeting:

DEVELOP A CLIENT PROFILE.

Use your top clients’ shared characteristics, personality traits, and investing styles to figure out who you’re looking for. Example: liberal-minded art lovers who’ve just experienced a liquidity event.

DECIDE WHAT’S NEGOTIABLE.

If you need the revenue, you may compromise on points such as a prospect’s life stage. List the issues you won’t budge on (example, never advising your own family) and revise it often, especially after a negative client experience.

DIG DURING DISCOVERY.

Use answers to regulatory questions to prompt deeper discussion rather than moving to the next line in the KYC form. Example: a prospect insists on owning a steadily declining stock. This could be a red flag, or probing could reveal it’s because his late father gave him the stock years ago. Once you understand the motivation, you can honour his father through a sound strategy like planned giving.

Originally published in Advisor's Edge