Financial advisors and clients exchange many questions, especially when advisors are helping clients retire. These questions guide clients to find the best advisor for their needs and help advisors better serve their clients. Among the many general planning and retirement questions for financial advisors, the following three are crucial ones to consider during the hiring process.
- Is the financial advisor a fiduciary? Fiduciaries have a legal duty to act in the best interests of their clients. Not all financial advisors are fiduciaries, so ask about this before hiring someone. Advisors should clearly explain fiduciary responsibilities to their prospects, as this will help prospects understand the advisor must act in the best interests of their clients.
- How does the financial advisor’s fee structure work? Advisors may bill hourly, by project, on a fixed rate, or by a percentage of the assets they manage. Prospects should get this information when meeting with a financial advisor for the first time so they can choose someone that suits their needs and budget. Advisors should consider proactively explaining their fee structure before a prospect asks, to show they are transparent and trustworthy. People will appreciate an advisor who breaks their fees down clearly and answers all lingering questions about payment.
- What are the financial advisor’s investment processes and strategies? Clients should find out how an advisor does the basics, like setting goals and assessing risk, but they should also ask about the advisor’s go-to practices. Do they focus on tax efficiency? Diversifying a portfolio internationally? Exploring unique retirement earning options like selling a life insurance policy? Clients should ensure their advisor’s processes and strategies align with their own. Advisors may benefit from having a well-rehearsed speech regarding their methods and how they tailor solutions to the needs of their clients.
What Are Financial Advisor Questions to Ask Clients?
The advisor-client relationship is a two-way street; financial advisors must also ask the right questions to best understand their clients’ needs. Some great financial advisor questions to ask prospects and clients include:
- What major changes do you anticipate in the coming years? By asking this question, advisors will learn critical details about a client’s life. Maybe a client intends to have a few children, start a business, or retire early. While advisors can’t plan for every significant financial disruption in a client’s life, they can help them prepare for the ones clients are counting on.
- Why do you feel you need help from a financial advisor? This question reveals to advisors two key things about their clients. First, the client’s response will provide more specific direction to their financial goals. Second, an advisor can learn how hands-off or hands-on a client wants to be. Some people like to handle it all themselves, while others would much rather have a professional take care of everything for them.
- Have you worked with a financial advisor previously? Advisors should never assume a client knows the standard ins and outs of working with a financial advisor. This question is also an opportunity to discover if they’ve left another financial advisor and why they left. Clients should be open about prior bad experiences, as this will allow their new advisor to ensure they do not cause the same offense.
What Are the Questions Financial Advisors Hear Most Often?
The most commonly asked questions will vary as the market and economy fluctuate, but here are a few top questions financial advisors have heard lately.
- Can I afford to retire? A Financial Times survey asked about what clients want from a financial advisor. Over a quarter of the polled advisors said “Can I afford to retire?” is one of the first concerns they hear about from clients. Advisors must consider their client’s standard of living, essential and optional expenses, sources of income, and numerous other factors that will affect the answer to this question.
- Are we going into a recession? This is one of the big financial questions to ask going into 2023 as the Federal Reserve aggressively raises interest rates and inflation reaches a 40-year high. No advisor can predict the future, but they can advise on more resilient portfolio options in response to these signals.
- Should I purchase life insurance? Life insurance adds a layer of protection to a client’s wealth. It’s especially beneficial for those with partners or dependents who earn much less than they do. A life insurance policy can ease the financial burden that may come with the loss of a household’s primary provider. Policyholders can also sell their policy later in life for cash, which is called a life settlement. Life settlements make clients more money than the surrender value of their policy if they get to a point where they no longer need life insurance.
If you’re interested in life settlements as part of a well-rounded wealth management strategy, get in touch with our team of experts at Life Settlement Advisors. Payouts can range from 10% to 25% of the policy benefit amount, and financial advisors can earn commission for guiding clients through this lucrative retirement option.
Did you know you can sell all or a portion of a life insurance policy, even term insurance? Selling an unwanted life insurance policy is no different than selling your car, home or any other valuable asset that will create immediate cash. Contact us today to learn more.
I am always happy to answer any and all questions about these life-transforming transactions.
