Successful financial advisors recognize that the interview process can provide them with a deep understanding of their clients’ objectives, motivations and expectations.

“The client discovery process gives you a chance to know your clients personally,” says Prem Malik, a chartered accountant and financial advisor with Queensbury Strategies Inc. in Toronto, “not just as investors but their lifestyle, likes and dislikes, and in general who they are.”

Depending on whether you are meeting with a new or an existing client, the interview should typically aim to achieve five main goals: provide you with an opportunity to explain how you can help the client achieve his or her goals; list your track record, experience and qualifications; allow you to get to know the client; discuss investment issues, such as risk tolerance, asset allocation and taxes; and gather financial data needed to make relevant recommendations.

If the meeting is with an existing client, the interview would be more of a formal review of an existing portfolio and a re-examination of existing goals, objectives and changes in personal circumstances, if any.

Typically, a client interview could be structured or unstructured — “Each client is different,” says Malik — but at all times, you must be focused on achieving the goals of the interview.

Advisors must have a defined set of questions to which they would like answers, and these are typically refined over time to get the best possible answers from clients. You must also adhere to the requirements of the standard “know your client” questions on risk tolerance, time horizons, taxation and other matters.

Prior to the interview, you should outline your objectives for the client, suggests Steve Walmsley, founder of Toronto-based management-consulting firm, Walm-sley and Co. When you meet with the client, you should confirm the objectives, which will allow you to set the stage for the interview, he says. For instance, if you say: “Here’s what we are here to talk about,” you are effectively turning your objectives into the client’s.

You should make your clients comfortable. Give them a position of power and allow them to relax and have an open conversation, suggests Walmsley.

Malik advises that you should never go straight to a profile questionnaire or read directly from it. “You learn more about clients when you allow them to talk freely and tell their story,” he says. “You can actually build rapport with them, earn their trust and confidence, and build your own credibility during a relaxed, open-ended conversation.”

Walmsley suggests that throughout the interview, you should “pace rather than lead” and be a good, intelligent and empathetic listener: “You need to practise your interview techniques. People who do not practise hard often tend to focus more on the science of the interview. But you must balance the science with the heart.”

To get as much information as possible, including answers to difficult questions, you must use effective probing techniques. A good way to do this is to ask open-ended questions. For example, Walmsley suggests questions such as: “What are your life’s dreams?” or “Tell me about your family.”

“Many advisors tend to talk too much and listen too little,” says George Hartman, CEO of Toronto-based Market Logics Inc. He contends that some advisors “try to finish the sentences of their clients” or like to “fill gaps of silence with their own voices.” These, he says, are classic mistakes made during interviews.

Another error is to use language that suggests a “hunter/victim” mentality, suggests Walmsley. Advisors who do this are more focused on making the “kill” and show a high degree of emotion when trying to do so. More often than not, they end up not having sufficient information.

Such relationships have a high incidence of failure. Evidence shows that two of the main reasons why clients leave their advisors are incomplete knowledge of the client and unfulfilled expectations that were established during a poorly conducted interview.

If you are interviewing an existing client, you must be candid and reassuring, says Hartman. This is especially so if the interview is conducted after a major market event, such as the recent credit crunch.

“You should get clients to open up about how they are feeling at an emotional rather than irrational level,” suggests Hartman. You should not be preoccupied with validating your actions and any underlying performance issues. Instead, you must be in a position to explain both the reasons for their experience and the measures to be put in place to meet their future expectations.

@page_break@Here are some of the key guidelines you should follow to have a successful interview.

> Be prepared. Know what areas you would like to cover, which questions to ask and the information required. Make sure you capture as much information as possible.

> Discuss what you offer. Provide a comprehensive overview of how you can help clients achieve their goals, including information about your skills and experience.

> Be a good listener. Empower clients to talk freely about themselves and their objectives, goals and expectations. Be an empathetic listener.

Use probing techniques. Ask open-ended questions that cannot be answered in a single word. Do not read from a questionnaire.

> Be patient. Do not rush through interviews. Spend as much time as necessary listening to their story. Set the pace of the interview, if necessary, but be respectful.

> Conduct regular reviews. Stay on top of changes in your client’s circumstances, goals and expectations. The client discovery process should be continuous. IE