I believe there is often a large distinction between what is on the minds of our clients, and what should be on their minds. And good questions can narrow the gap. Here's a few that have worked for me.
(1) If the stock market declines by 30 percent tomorrow, will that jeopardize your financial future? This can lead into a positive discussion of such topics as rebalancing, the tendency of markets to revert to the mean, the correlation over the long term (10 years or greater) of present levels of valuation and expected returns, and more.
(2) Who is important to you in your life? Learning about a client's family, friends, and even pets is a way to learn about a client.
(3) The classic question, "What does money mean to you?" And, when the answer is "security" or something aking to same, "What does security mean to you?" And so forth. When asking this questions of couples (one at a time), very often the answers are quite different.
(4) Where did you grow up? How was it growing up? Where did you go to school? Where was your first job / what did you do? (In other words, take a personal history.)
(5) What is your most memorable, or emotional, experience about money? Usually I don't have to ask this question, because the "personal history" has uncovered it.
(6) Another classic question, slightly modified to suit my tastes: "If a doctor said that you had five to six years to live, and during that time you would be as healthy as you are now, what would you like to do - or accomplish - so that at the end of that time you had no regrets?" Other than question #3 above, this is my favorite question. Getting down to specifics - and taking the time to do it, is important. "Travel." Where? "Europe." Where in Europe? "Italy." Where in Italy? "I always wanted to see Pompeii." What interests you about that? (etc.).
(7) What does "retirement" mean to you? How would you describe your likely weekly activities at age 65? age 75? This opens up the entire conversation that retirement, for many, is not just about "leisure" - but involves working (for the pleasure of it, hopefully), volunteering, learning and exploring, etc.
(8) What is more important to you - what the stock market did this past week, or accomplishing one of the personal goals (i.e., spending time with family or friends, pursuing a hobby, attending a play or sporting event, traveling to a destination, reading a book, etc.) or risk management goals (i.e., updating your estate plan, undertaking year-end tax planning, ensuring adequate personal liability insurance, obtaining quotes on disability or long-term care insurance, etc.) that we previously identified for you to tackle during this specific year?
(9) What has to happen in the next 3 months for you to .... (accomplish some goal)? For example, this question works well for the person who never takes a vacation from work.
Listening is a skill. It involves not just knowing good questions to ask, but how to react to the answers. Knowing when not to say anything at all - to be patient and let the client develop the words to express his or her own answer - is important. Also sensing when a person is depressed, concerned, worried, etc. In many ways financial planners are counselors to their clients. (Perhaps we should be recruiting psych majors, as opposed to finance majors.)
I believe learning the "who" about the client is very important - but just a first step. By asking clients the right questions, thought-provoking ones about their lives and values and what's truly important, often clients are put on the right track to change their own behavior - for the better. It does not always happen, but more times than not asking the right questions, and establishing a "road map" for a client, can make a real change in a client's life.
Would like to hear other "good questions" and tips on "listening skills" from others. - Ron
Ron A. Rhoades, JD, CFP(r)