Financial Advisor Assisting Senior Couple
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Everywhere investors turn they’re overwhelmed with products, ideas and strategies about how to build their wealth. There’s a simple way for you to cut through the noise and help more clients: ask 3 key questions before building an investment plan. While simple, these questions can provide complex answers and lead to the solid plan clients need.

#1: What are your objectives?

Clients need to understand their objectives so they can better understand their destination. In other words, ask them “Where do you ultimately want to wind up?” By asking this open-ended question, you can help clients get to the root of their goals.

Households with an advisor are more likely to have a financial plan.

Source: IFIC, The value of advice report, 2012.

Before they start investing, clients need to articulate not only what their objectives are, but also over what time frame they want to achieve them and how they’re going to evaluate their success.

EXAMPLE: Client objectives

Family with two children preparing for their education: a son who plans to study at home and a daughter who plans to attend medical school abroad.

In both cases, the clients are saving for the child’s education — but the amount needed for each child comes at very different cost levels. The time frame and objectives vary for each child’s savings needs.

#2: Where do you stand financially?

Clients need to understand where they stand financially before they can make decisions about what investment options are right for them. Without clearly knowing what all of their assets and liabilities are, some may make investing mistakes — or steer you to give advice that isn’t suitable for their situation.

EXAMPLE: Financial standings

A couple with a $1 million mortgage, two leased luxury cars and three children in private school.

With interest rates near historic lows, someone may suggest, “You can borrow to invest; what’s the risk?” The problem is, without understanding where they currently stand, that idea — while it might be right for some — may be entirely wrong for them and comes with financial risks.

#3: When do you think you can retire?

Investors need to ask themselves: “When can I retire?” It’s probably the most common question you receive as an advisor. And, the answer is complicated. Expectations vs. reality are very different things.

The reality is the average life expectancy of Canadians is steadily increasing, according to Statistics Canada. “For many people, retirement income will need to last 30 years or more — and it will need to cover a variety of expenses,” says Michael Banham, vice-president, wealth distribution at Sun Life Financial. Not to mention, “it’s important that their money still has the opportunity to grow in retirement, to hedge against inflation and protect against longevity risk,” Banham says, adding that income and protection are both key in a retirement portfolio.

By knowing when clients want — or expect — to retire, you can help set a realistic plan in motion. Ultimately, clients need a financial roadmap to help them achieve their objectives and get to their destination — likely a long and happy retirement — on their terms.

EXAMPLE: Retirement income

65-year-old with $2 million in non-registered GICs.

Using the conventional rule of a 4% withdrawal annually, the investor believes he’ll never run out of money. But he needs to index the withdrawals to inflation. And factoring that in, the client will run out of money, in this example, by age 92.

Before starting to plan, investors need to ask themselves a fourth question

Who can help me? Not just with my investments – but with how will I protect my savings in the long run for my family and myself.

Advised households save at twice the rate of non-advised households.
74% of households with an advisor feel confident that they’ll have enough money to retire comfortably.

Source: Ipsos Reid, Canadian Financial Monitor, special analysis for IFIC

You can be that person. Show your value.

Research shows that those who work with an advisor are further ahead financially and accumulate more assets. Why? The reason is simple: clients who work with an advisor are held accountable. They work with a trusted advisor, like you, who can help them create a financial plan that’s reviewed on a consistent basis. And, as you meet with them every year, they can track their progress – working toward their objectives and achieving financial security and well-being along the way.

For more information about how to help more clients start investing for retirement, contact the Sun Life Financial Wealth team by email at

Watch this video for more details on these questions and more.

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