Asking the right questions

Asking the right questions — and knowing when to do so — requires skill and experience if you are to get the most out of a client interview, says Heather Holjevac, a certified financial planner with TriDelta Financial Partners Inc. in Oakville, Ont. It is simple enough to take a “cookie-cutter approach” and follow a structured format, she says, but sometimes it is necessary to use “out of the box” questions.

Although using a structured format might be appropriate in some cases, you should still be flexible, Holjevac says. Two clients may appear to have similar situations; but beneath the surface, they might be different in many ways. Accordingly, your questions must be adapted to individual clients, bearing in mind that your goal is to acquire specific information.

“The quality of questions you ask will affect your clients’ perception of your value,” advises Marion Iliohan, director of consultant training and development with Investors Group Inc. in Toronto.

During the client discovery process, Iliohan says, your goal should be to find out as much as possible about your new clients, including their beliefs, principles, goals, objectives, expectations, priorities and values.

“You want to know what’s important to them,” Holjevac says. Using different types of questions, she adds, will help you to obtain different answers, which will ultimately enable you to fulfil the requirements of the financial planning process.

> Open Questions

Open questions are designed to get your client to speak as freely as possible, allowing you to gather a large volume of information. These are questions that cannot be answered in one word, such as “yes” or “no.”

An example of a closed question: “Do you plan to travel during retirement?” An open question on the same topic: “What do you plan to do during retirement?”

Another effective open question: “Where do you see yourself 20 years from now?”

Open questions generate “personal and informative” answers, Iliohan says.

These types of questions, often designed to get the conversation going, invite clients to talk at length, says Jackie Read, a financial advisor with Edward Jones in Vancouver. They also provide an opportunity for you to learn about your clients’ personal circumstances, she adds.

“Often, the same question asked in a different way can produce different answers,” Holjevac says, “giving you the chance to open up different possibilities.”@page_break@> Closed Questions

Although open questions yield more copious information, closed questions have their place, too. The aim of closed questions, which are more narrowly focused than open questions, is to get specific answers.

Questions such as “Do you currently have a financial advisor?” and “How much money have you invested in RRSPs?” urge your client to focus on certain areas and provide specific information. These questions are especially useful, Holjevac says, in steering the conversation toward topics you need to discuss when dealing with clients who are “all over the map.”

> Clarifying Questions

Clarifying questions are intended to improve your understanding of specific points your client raises. These questions help you ascertain that you have not misunderstood any of the points your client has made. And they help in getting your client to commit to definite answers.

For example: “What do you mean when you say you want flexibility in your portfolio?” Or: “Could you explain why you have chosen to reduce your risk while you’re still young?”

These questions are necessary, Iliohan says, “because you sometimes have so much information that you want to get it right.”

> Confirming Questions

In order to make sure you are on the same page with your client, Read says, you will need to ask confirming questions. These are used as a feedback mechanism to elicit confirmation from the client of your understanding of specific aspects of the discussion.

For example: “Are you sure that you do not wish to invest in your children’s education?” Or: “So, you want me to proceed with developing a plan for review without taking your spouse into consideration?”

Although these questions are useful in ensuring you understand your client’s wishes, Iliohan says, they should be used sparingly — only to confirm important issues. Otherwise, you might look as though you do not understand what your client has told you.

> Don’t Forget To Listen

Even more important than questioning, Holjevac says, is listening.

“You must listen to your client’s answers,” Read says, “rather than thinking about the next question.”

“Be clear of mind and be receptive to the responses you get,” Iliohan says. “Effective listening will provide space to answer questions and give clients time to think about their responses.” IE