At only 150 pages, Questions Great Financial Advisors Ask … and In-vestors Need to Know is relatively thin, yet I was pleasantly surprised to discover that it holds many usable ideas.
The book was co-authored by Alan Parisse and David Richman, two well-regarded industry veterans. I don’t know Richman, but I have heard Parisse speak at several conferences. On each occasion, I have been impressed by his insight and ability to communicate.
The other twist to this book is that the authors do not claim to have all the answers. Instead, readers are treated to a compendium of observations from leading advisors on how they get to the core of their clients’ ambitions, fears, biases, motivations and unstated needs in order to make appropriate recommendations for them.
The book has only six chapters — each posing a question that is probably top of mind for advisors and their clients.
> Chapter 1. What makes a great financial advisor?
As might be expected, the need for a client-centric focus features prominently, as does the assertion that great advisors distinguish themselves in the marketplace by the questions they ask rather than the products they recommend.
What are those differentiating questions? Some can cause discomfort because they probe the reason for a client’s previous decisions. For example, in reviewing a client’s investment portfolio, an advisor may ask: “Why did you purchase this particular fund? How did you decide it was right for you? Why don’t you own more (or less) of it? What would have to happen for you to want to sell (or buy more of) it?
Other questions, designed to gain insight into who your clients are and how they truly feel, may include: “When you were growing up, were you rewarded, punished or loved with money? Do you think money can make you happy? What are you trying to accomplish with your money? What was your most painful financial experience? How did you deal with it?”
> Chapter 2. What should your client expect of you?
The bottom line is that clients have every right to expect their advisors to pay attention to what they say and to be alert during the process. That means actively engaging in serious conversation with your clients in an open exchange of ideas. The operative word here is “actively.” Questions breathe life into a conversation; the listener’s attitude and reactions can either energize or suffocate a conversation.
Great questions to ask clients to get at all the essential information include: “Is there anything else you want to add? Is there something more I should know? Is there something you are not saying?”
> Chapter 3. Personality profiles.
An advisor will require different questioning techniques for each client. For example, avoid debating with Mr. Know-It-All, who thinks he is smarter than everyone. Instead, ask him: “Has your approach been consistently successful through both up and down markets? Do you have both a short- and a long-term investment strategy? How do you decide when to sell or buy?”
Chances are strong that Mr. Know-It-All will be long on bravado but short on details.
Ask the cynic what happened to make him or her so cynical? Did he have a bad investment experience in the past? Ask how you can allay her concerns. Ask Amy Amiable, who professes to love what you are doing for her but refuses to take action, if there is anything she needs to know before you take the next step? Is there something that is keeping her from getting started? Other personalities, along with appropriate questions to ask them, include: the putterer, the hobbyist, Paul Perfect, the analytic, the controller and Ms. Pennywise.
> Chapter 4. What is the purpose of money?
This chapter digs deeper into the client’s psyche about the meaning of money.
> Chapter 5. The role risk plays.
The fifth chapter addresses an important issue for advisors to go over with clients.
> Chapter 6. A useful collection of 180 great questions to ask.
These are listed by subject or stage in the client/advisor relationship.
Questions Great Financial Ad-visors Ask … and Investors Need to Know earns three Hartman Hurrahs. Keep a copy handy and refer to it whenever you feel you need help in establishing a long-term client relationship. IE
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Questions that can help make you a great advisor
It’s the questions you ask, rather than the products you sell, that will make the difference
- By: George Hartman
- August 30, 2006 August 30, 2006
- 13:28