Curiosity, as we know, can be downright dangerous if you are a cat. But if you are a financial advisor, it can be one of the most powerful tools in your kit for building relationships with present and potential clients. That’s the message of Your Client’s Story: Know your client and the rest will follow, a new book by Scott West and Mitch Anthony.

The authors aren’t referring to “know your client” from a KYC compliance perspective but rather to becoming intimately familiar with your clients’ life experiences. An advisor should learn each client’s special “story” in order to structure the client’s financial affairs so that they address the client’s most compelling personal needs, some of which might otherwise go unknown and unfulfilled.

This sounds a lot like the “life planning” process that is growing in popularity among advisors, and it certainly fits that approach perfectly. However, Your Client’s Story goes even deeper by demonstrating how understanding a client’s history and emotional experiences involving money can often change the focus and direction of the financial strategy.

According to authors West and Anthony, getting to that point of awareness means being honestly curious about each client and asking the right questions and really listening to the answers. This level of communication does not fit well with traditional “fact-finding,” particularly the use of formatted questionnaires. Rather, it is a conversation that builds into a dialogue about hopes, dreams, preferences and priorities that are shaped by the client’s life experience. The questions cannot be manipulative, however, and must reflect a genuine interest in the client’s experiences as a backdrop for his or her thoughts and feelings.

There is a natural order to the questions you might ask, as laid out in the book. Begin with where your client has been, identify influencing experiences, then follow with queries about where the client is now and how he or she got there. Then ask where he or she wants to be. Bridging the gap from the qualitative to quantitative aspects of a client’s situation requires care to ensure the context is set properly.

As an example, one of the questions Your Client’s Story suggests you ask early in the relationship is “Where did you grow up?” At first glance, this appears to be a nice but unnecessary question. But if it is followed by a series of deeper questions based on the client’s responses, you will probably gain some insight into what might be a priority for the client.

Let’s follow the sequence with some sample questions and answers:

Advisor: Where did you grow up?

Client: I spent my childhood in Winnipeg.

Advisor: What was it like growing up in Winnipeg?

Client: It was very tough. My father passed away when I was 10 years old, leaving my mother to raise three kids on her own.

Advisor: What impact did growing up in those circumstances have on you as you built your own life?

Client: It made me determined that my family would never be in a situation like that.

Advisor: What things have you done to feel confident that they won’t?

Client: I got a good education and worked hard so my wife could stay at home while the children were young. We avoided debt as much as possible, saved regularly and invested cautiously.

Advisor: Have you had any bad experiences along the way?

Client: I tried to “get rich quick” by investing in a dot-com company and lost almost half our savings. So we are building them up again.

Advisor: How has that experience influenced your investing strategy?

Client: I am definitely a conservative investor now.

Advisor: As a result of that setback, how far would you say you are behind where you wanted to be at this stage in your life?

Client: I had hoped to semi-retire by age 55, but now it looks like I’ll have to keep working full-time for a few years more.

It’s easy to see how this dialogue might lead to other questions such as “How would you define ‘conservative’ investing?” or “What does ‘semi-retire’ mean?” Other questions could include: “In real terms, what would your financial situation have to be for you to feel you could semi-retire?” or “Have you provided for the probability of becoming disabled or dying?”

@page_break@In addition to the general line of questioning, Your Client’s Story has a few chapters dedicated to specific situations, including business owners and clients interested in philanthropy. There is also a chapter that is more or less borrowed from co-author Anthony’s earlier book, The New Retirementality, which deals with the changing attitudes and habits people have about retirement and how questioning them might be adapted in recognition of these new preferences.

Finally, the appendix contains a series of sample questions and discussion points around the more common life situations advisors encounter in conversation with their clients.

I found this book to be one of the most insightful I have read in some time. Mastering the art of honest questioning, coupled with earnest listening, will serve you well — not only in business but also in life. IE