Important Questions that Need Asking
You are a financial “doctor” of sorts. As such, you need information in order to “prescribe” the proper “medication” for your client – or to intelligently tell him or her that they’re fine and to make a date to get together next year. To improve the quality of your regular client meetings, diplomatically and politely ask who, what, where, when and why questions. Such questions are likely to help the client stop and think about what’s really important in their life and how you can help them make the best use of their available dollars.
Althought not necessarily in this order, here are a few examples of the types of questions you might want to consider in order to get your clients involved in a discussion about their “financial health”:
General Questions about Money
– What role does money play in your life? What’s important to you about money?
– How do you use credit cards?
– When do you use cash?
– How do you manage debt?
– Where would you NEVER put your money?
– How would you describe your feelings about taking risks with your money?
– What do you consider a “decent income” right now? Why?
Questions about family & life issues
– When did you have your last “financial wellness appointment” and what was the result of that?
– What would you like to accomplish during your working years? Your retirement years? At what stage of doing those things do you find yourself right now?
– What does “financial security” mean to you? When do you expect to achieve that? How do you plan to get there? Where would you say you are you now?
– What does “financial freedom” mean to you? Why is that important?
Questions about business issues
– What is your continuation or exit strategy from your business? If you don’t have one, why haven’t you established one?
– Who will run things if you are disabled? For a short time? A couple of years? Permanently?
– How do you want to transition control from you to someone else when you retire? If you die prematurely?
– Who will likely control your business when you retire or die?
– What part will your spouse or family have in continuing your business?
Questions about premature death
– What do you know about life insurance?
– How do you feel about owning your own life insurance coverage? Why is that?
– (If life insurance is currently in force) What is the purpose of your life insurance? How did you arrive at that amount of coverage?
– What process did you go through to purchase your life insurance? How did you choose the agent who helped you purchase it and do you still have a professional relationship with that agent or agency?
– How long do you feel you will need life insurance coverage?
– When did you last review your policy(ies)? Why did you do so? What was the result of that review?
– How do you feel about life insurance for other members of your family? Spouse? Children?
Questions about loss of income
– How important is your regular paycheck? (On a scale of 1-10, with 10 being the greatest)
– What would be the financial impact to you and your family if you were unable to work due to an accident off-the-job or chronic illness?
– How much lost income would be replaced by group short- or long-term disability (SDI or LTD) and for how long?
– How much of that financial impact would be replaced by passive or unearned income? (Rental income, investments, etc.)
– What percentage of your current gross income would expect to have to pay in premium to insure up to 65% of lost income.
Questions about savings
– What is your savings philosophy?
– Where do you consider a “safe place” for your savings?
– How much have you saved for emergencies and/or routine maintenance expenditures?
– How much do you put into savings (dollar amount or percentage of take-home pay) and at what intervals?
– What is your current feeling about retirement? When might that begin? Why might you run out of money before you died?
Questions for long-term care insurance
– When did your grandparents/parents pass away? How long did they require special caregiver care?
– Who do you know that was deeply involved in the end-of-life health care of a spouse or relative? What was that like for them?
– How do you feel about being unable to take care of yourself during your later years? Who would most likely take care of you?
– Where would the money come from to take care of you or your spouse should you need specialized care for a prolonged period of time?
Make these questions and answers part of your permanent file for your client and look at them before each regular financial review. Your diligence in record keeping will help you client on stay course and be a reminder of what’s important for good financial health.
