4 ways to better understand clients

Stray from the script

When finding out about risk tolerances and time horizons, advisors often adhere too closely to a checklist. “We often talk about getting to know the client as one meeting and rigid steps, but that’s not always the case,” says Jeff Rudderham, an investment counsellor with BMO Harris Private Banking in Halifax.

Instead, ask open-ended, offbeat questions. How does the client visualize life in her 70s? What are her passions? What are some painful and joyful money memories? The discovery process starts at the first meeting and continues throughout the relationship.

At every meeting, ask about the client’s obligations, motivations and wants. Move the discussion past returns, because those are just means for reaching goals. “Most of my conversations have little to do with investments,” says Rudderham.

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Don’t stop at yes

Susan Milburn, financial advisor and branch manager at Raymond James in Saskatoon, reviews clients’ stated objectives with them at every meeting. “Goals change all the time,” she says.

Saying them out loud elicits either a confirmation of the goal, or an acknowledgement of a shift (whether in the client’s personal circumstances, ambitions, or thoughts about the market). It’s especially important to revisit goals during times of transition—such as birth or adoption, death, job change, or dependants moving out and starting their own lives.

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Look for clues

Don’t just listen, observe. If you meet at a client’s home, everything from family pictures to evidence of pastimes can reveal priorities behind the investments.

“You see how people live and what’s important to them,” says Ellen Murray, a financial advisor at MGI Financial in Brandon, Man. After office meetings, she always walks clients out so she can see their cars. One, who claimed to be thrifty and conservative, was driving a brand-new sports car.

Every piece of intelligence provides insight into a client’s goals and helps steer the conversation.

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People don’t always share

Clients can have clear goals, but might keep them close to their chests. In a survey conducted by SEI Private Wealth Management, 67% of respondents agreed it’s important for their financial advisors to know all their goals. Yet only 26% said their advisors have that knowledge.

Think about other things people keep private, notes Milburn. You never know someone fully on a first date—or even years into a relationship. The lesson: clarifying investment goals is a perpetual conversation, says Milburn, so never stop probing.