Top 5 questions advisers should be asking every client
One of my favorite quotes is from Gary Keller: “The quality of any answer is directly determined by the quality of the question.” One of the biggest issues I see advisers having is in the quality of the questions they are asking their clients. One good question can change the relationship the adviser has with a client and one bad question could potentially end that relationship.
My wife would say I ask a lot of questions. But I am not sure she would say they are great questions. Why? Because if listened better, then the question I would ask her might be better. As I have said in earlier blogs, we at Russell Investments try to help advisers build better practices, so I have compiled five key questions I think would really benefit an adviser’s practice. I am going to run through them and add some personal insight. These questions have been compiled from coaches such as Carl Richards and other great thinkers in our business. By the way, these are great questions to ask yourself as well. You might not like the answers, but you may learn a lot. Here we go.
1. What does money mean to you?
This is one of my favorite questions of all time and the reason it is number one on the list. First, it is open-ended. Open-ended questions as are always great because they allow the responder to go in any direction they want. The reason I like this question so much is because the answers to those six words can tell you many things you need to know about your client. If you think money means the same thing to everyone, think again. According to the Webster dictionary, the meaning of money is something generally accepted as a medium of exchange, a measure of value, or a means of payment. To me, it means flexibility and freedom. To others, it might mean prestige and power. How can you develop a plan for a client if you don’t know what kind of emotions they have about money?
2. What is your first memory of money?
Another open-ended question that can spark a variety of answers. According to a Cambridge University study by David Whitebread and Sue Bingham, a lot of our beliefs about and understanding of money are set by age seven. Age seven. Everyone has heard of the book by Robert Fulghum: All I really need to know I learned in Kindergarten. I don’t think Robert was that far off. Unfortunately for me, my first memory of money was of our family not having enough. So, throughout my life I have always tried to find ways to make money. From caddying to working as a Demo Tech to helping advisers help their clients find financial security. Other people might have good early memories of money, such as receiving money for a birthday or a special occasion. Again, the responses to this question can vary by individual.
3. What was your parents’ relationship with money and how does that shape your relationship with money?
Let’s all be honest, everyone ends up with baggage from their parents, good or bad. They way your parents view money may have a big influence on a lot of decisions you make in life. My parents always saw money as a source of pain or anxiety. So early in my career and life I had that same anxiety. I never thought about the usefulness of money, because I never had any extra.
Where did my parents learn about money? From their parents. My grandparents lived through the Great Depression so you can be sure they had that same anxiety about money. I only learned about the stock market because when I caddied, a lot of the people I caddied for invested in the stock market. If I had not met some of those people early in life, I don’t think I would be in this profession and have what I have today. I know a lot of people who have never invested in the market and will not because their parents did not. In our latest Economic and Market Review, we showed the benefit of investing through dollar cost averaging compared to staying in cash. Unfortunately for those clients sitting in cash, they could end up not having as much money for retirement. That may be a direct result of the money lessons they learned from their parents.
4. What are you scared of when it comes to money?
People have real anxiety when it comes to money. It is not so much the actual physical bill that causes the anxiety, it is about what happens when things go wrong. What happens if the market goes down? What happens if I lose my job? What happens if I don’t save enough? These are questions a lot of people think about a lot of the time and the answers may scare them. Sometimes that anxiety causes people either to make a bad decision or no decision at all. As we all know the biggest detriment to an investment’s return is not the actual investment, it is the investor’s behaviour, especially when volatile markets make them anxious. If you can flush out that anxiety from a client, it can make a huge difference.
5. How much do you consider taxes when it comes to your investments?
Sometimes the right question might have nothing to do with money. Time is our most precious commodity, and this finite resource drives how we spend our days, weeks, months and years. We all long to have more time in our days to do what we love – whether it be spending time with friends and families, pursuing personal pursuits, and contributing to our community. Imagine if work didn’t consume the majority of our waking hours – what could this mean for me? This question allows you to connect with your clients on a more personal level, and provides an insight into their hobbies, aspiration and goals.
The bottom line
I am sure there are a lot of other great questions that advisers can use to obtain information from clients, but I thought these five were the best. Remember, coming up with great questions is not a skill you are born with, it is a skill you can learn. Read books from Carl Richards or Dan Solin or you can just Google “great questions” and see what comes up. As I have said before, advisers do not need more products, just better partners. We at Russell Investments are always trying to be those better partners.