Top 10 Financial Planning Questions Every Client Should Be Asked

If you’re a coach, advisor or agent, every client you speak to should be asked the following financial planning questions. They are a crucial aspect of running a successful consultation.

Yet, many coaches and advisors struggle with asking comprehensive questions to help managing their client’s finances effectively.

We’re fixing that here!

This post specifically addresses the right questions to help a client plan their future finances.

So, with Better questions you elicit better answers.

Let’s discover the 10 financial planning questions every client should be asked!

The Importance of Asking the Right Questions

Asking the right questions is not just about collecting information, but also about understanding your client’s values, goals, and priorities. You can tailor recommendations to their needs better.

It’s also important to ask “open-ended” questions much more often than “closed-ended” questions.

Open-ended questions begin with the “query words” such as; Who, What, Where, When and Why.

These types of questions require the client to open up and give you a bigger picture of who they are and what they want from their lives.

Closed-ended questions tend to elicit a yes or no answer such as; Do you own your home? Do you take vacations every year? Etc.

So without further adieu… here are The Top 10 Holistic Financial Planning Questions Every Client Should Be Asked….

Question 1: What Are Your Financial Goals?

This may seem like an obvious question, but many people struggle to articulate their goals clearly.

Encourage your clients to be specific and realistic about what they want to achieve. Here are a few sub-questions to ask…

Do they want to retire early?
Do they want to buy a second home?
Pay off their debt?

You’ve got to understand what they want so that you can create a plan that helps them achieve them.

Question 2: What Is Your Risk Tolerance?

This refers to how comfortable they are with taking risks with their investments.

Some people are willing to take on more risk in exchange for potentially higher returns, while others prefer a more conservative approach.

You’ve always got to weigh your clients comfort level with risk. In fact, it’s critical for you to know this so you can create a tolerable and successful financial strategy for them.

Question 3: What Is Your Current Financial Situation?

How can you get to where you want to go without knowing where you are now? It’s like not knowing what’s in your closet when you want to pack for a trip. You don’t know whether to take the parka or the bikini.

So go deep. Make sure you address their current income, expenses, assets, and liabilities.

You’ve got to be able to identify areas where they can save money, reduce debt, and invest for the future. This includes knowing if there has been a major event in their lives, such as a recent job loss or divorce.

Question 4: What Is Your Investment Knowledge?

Investing can be complicated, and not everyone has the same level of knowledge or experience in this area. You should also ask about their investment preferences, such as whether they prefer stocks, bonds, or real estate.

Question 5: What Is Your Time Horizon?

A client’s time horizon refers to the length of time they plan to hold their investments.

Some clients may have a short-term horizon, such as saving for a down payment on a house, while others may have a long-term horizon, such as saving for retirement.

Again, without this knowledge and asking the right financial planning questions, you’re doing your client a disservice.

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Question 6: What Is Your Tax Situation?

You should ask your clients about their tax situation, such as their income, deductions, and credits.

This information can help you identify ways to minimize their tax liability and maximize their after-tax returns. Sometimes tax questions are uncomfortable, but clients should be asking themselves these financial planning questions, too… long before their advisor shows up.

Question 7: What Is Your Estate Planning Situation?

Estate planning is an often-overlooked aspect of financial planning, but it’s essential for ensuring that your client’s assets are distributed according to their wishes.

You should ask your clients basic questions about their estate planning situation, such as;

Do they have a will or trust in place?
Do they have designated beneficiaries for their assets?
Is their will up to date?

Question 8: What Is Your Insurance Coverage?

Insurance is an important part of any financial plan. A good agent or coach can do a policy review of nearly any type of insurance you have. They’ll look into the type of insurance coverage you have, such as life, health or disability insurance policies. You don’t want to be over or under insured. A good money coach can help you do that.

Question 9: What Is Your Retirement Plan?

Retirement planning is a crucial aspect of financial planning. So it’s important to ask clients about their retirement plans. Questions such as;

Do they have a 401(k) or IRA?
How much do they put away for retirement every month?
Do they have cash in a box somewhere?

This information can help you as the advisor create a plan that helps them achieve their retirement goals.

Question 10: What Is Your Exit Strategy?

Finally, it’s important to ask your clients about their exit strategy. Not everyone likes thinking ahead. Yet, the future shows up at some point and you’ll be in it.

When it comes to asking the best financial planning questions, an exit strategy refers to their investments.

Some clients may want to pass their assets on to their children or grandchildren. While others may want to sell their business or real estate holdings.

Understanding your client’s exit strategy is important to ensure that their investments are aligned with their long-term goals and financial objectives.

Conclusion and Next Steps

Financial planning is a complex process. However, by asking the right questions, a comprehensive plan that fits the needs of your clients is key.

So, whether you’re a seasoned financial advisor or coach just getting started, these 10 financial planning questions are essential to ensuring your clients are on the right path to success.

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