Effective Questioning Techniques: Building Foundations for a Relationship - FA 13
The very foundation of financial planning starts with gathering client information to produce financial plans that analyze a client’s situation and provide recommendations to help clients realize their goals. However, the process of data gathering involves a lot more than simply collecting financial data. According to the CFP Board’s Standards of Conduct, the first responsibility in the financial planning process is to “understand the client’s personal and financial circumstances.” Thus, it is crucial for advisors to establish a solid rapport based on trust to facilitate open lines of communication.
Identifying issues that involve a client’s personal circumstances, along with the details of their financial goals and dreams, requires the client to have a high level of trust in their advisor. This trust enables clients to disclose their most intimate financial details and comfortably discuss their hopes, dreams, goals, and wishes. As a result, knowing how to ask the “right” questions that elicit trust and create rapport is vital for financial advisors to gather both financial and personal information to ultimately formulate the best financial planning recommendations.
In practice, several types of questions can be strategically used by advisors to obtain information while strengthening client relationships. These include swing questions, implied questions, projective questions, and scaling questions. Understanding and using these question types effectively can significantly enhance the advisor-client relationship.
?Swing Questions: Inviting Deeper Client Responses
Swing questions are closed-ended questions that use words like “will,” “can,” “would,” “could,” and “should.” For example, “Would you be willing to do X?” or “Can you tell me a bit more about Y?” While these questions can be answered with a ‘yes’ or ‘no’ response, they are different from simple closed-ended questions because they invite the client to share more if they need or want to.
These questions are best suited for clients with whom the advisor already has an established relationship. For instance, Ramesh, a financial advisor, has been working with Anjali for a couple of years. They have a good working relationship. Anjali is coming in today because she recently went through a divorce, and some changes need to be made to her estate planning documents. During the meeting, instead of asking, “Have you called the estate planning attorney yet?” Ramesh decides to use a swing question: “Can you tell me how it’s going with your estate planning attorney?” This question shows Ramesh’s genuine interest and invites Anjali to provide a more descriptive answer.
However, advisors should be cautious when using swing questions in situations where there might be opposition. For example, if Ramesh has repeatedly suggested that Anjali should save an additional ?5,000 per month and she hasn’t acted on it, asking, “Would you be willing to start saving the ?5,000 we discussed?” can sound confrontational. It’s better to use other question types in such scenarios to avoid appearing passive-aggressive.
?Implied Questions: Encouraging Conversation and Strengthening Connections
?Implied questions are structured as indirect questions and use phrases like “I wonder” or “You must.” They are best used once a relationship has already been established. For example, an advisor could use an implied question to ask, “I wonder what you will do with your upcoming bonus?” instead of asking directly, “What do you intend to do with your upcoming bonus?”
This softer approach can demonstrate the advisor’s sincere interest in what the client thinks. For instance, Amit, a financial planner, is meeting with Priya, who has just retired and is concerned about her portfolio due to recent market volatility. After discussing the portfolio, Amit says, “Priya, we just went over a lot of information, both good and challenging. I wonder what you are thinking about all this?” This question invites Priya to share her thoughts and feelings, fostering a deeper connection.
??Projective Questions: Helping Clients Visualize Possibilities
?Projective questions use phrases like “What if…?” or “What would…?” to help clients visualize scenarios that may be beneficial for their financial plans.” For example, “Would you be willing to do X?” or “Can you tell me a bit more about Y?” While these questions can be answered with a ‘yes’ or ‘no’ response, they are different from simple closed-ended questions because they invite the client to share more if they need or want to.
These questions are best suited for clients with whom the advisor already has an established relationship. For instance, Ramesh, a financial advisor, has been working with Anjali for a couple of years. They have a good working relationship. Anjali is coming in today because she recently went through a divorce, and some changes need to be made to her estate planning documents. During the meeting, instead of asking, “Have you called the estate planning attorney yet?” Ramesh decides to use a swing question: “Can you tell me how it’s going with your estate planning attorney?” This question shows Ramesh’s genuine interest and invites Anjali to provide a more descriptive answer.
However, advisors should be cautious when using swing questions in situations where there might be opposition. For example, if Ramesh has repeatedly suggested that Anjali should save an additional ?5,000 per month and she hasn’t acted on it, asking, “Would you be willing to start saving the ?5,000 we discussed?” can sound confrontational. It’s better to use other question types in such scenarios to avoid appearing passive-aggressive.
?Implied Questions: Encouraging Conversation and Strengthening Connections
?Implied questions are structured as indirect questions and use phrases like “I wonder” or “You must.” They are best used once a relationship has already been established. For example, an advisor could use an implied question to ask, “I wonder what you will do with your upcoming bonus?” instead of asking directly, “What do you intend to do with your upcoming bonus?”
This softer approach can demonstrate the advisor’s sincere interest in what the client thinks. For instance, Amit, a financial planner, is meeting with Priya, who has just retired and is concerned about her portfolio due to recent market volatility. After discussing the portfolio, Amit says, “Priya, we just went over a lot of information, both good and challenging. I wonder what you are thinking about all this?” This question invites Priya to share her thoughts and feelings, fostering a deeper connection.
??Projective Questions: Helping Clients Visualize Possibilities
?Projective questions use phrases like “What if…?” or “What would…?” to help clients visualize scenarios that may be beneficial for their financial plans. For example, an advisor could ask, “What if you could go forward in time, what legacy would you like to be remembered for among friends, family, and colleagues?”
?These questions are open-ended and encourage clients to think about their values and goals. For instance, Meera, a financial advisor, asks her client Raj, “What if you could go forward in time, what legacy would you like to be remembered for among friends, family, and colleagues?” Raj takes a moment to think and replies, “I would want to be remembered for my compassion and support for others.” Meera can then follow up with a swing question: “Can you tell me a bit more about what compassion and support for others look like for you?” This approach helps Meera gather valuable insights about Raj’s values and goals.
?Scaling Questions: Gauging Relative Levels of Client Interests and Concerns
?Scaling questions assess a client’s concerns and willingness or interest in change by asking them to rate their feelings or situations on a scale. For example, “On a scale of 1 to 10, where 1 is completely dissatisfied and 10 is completely satisfied, how do you feel about your current financial situation?”
The follow-up to these questions is crucial. If a client gives a low score, instead of asking, “Why so low?” which can focus on the negative, the advisor can ask, “Why so high? What’s keeping you from scoring lower?” This positive framing encourages clients to think about the good aspects of their situation.
For example, Arjun, a financial planner, asks his client Kavita, “On a scale of 1 to 10, where 1 is the calmest and 10 is the most anxious, how do you feel about the recent market activity?” Kavita responds with a 4. Arjun follows up with, “4 – tell me why so high, what’s keeping you from feeling even more anxious?” This approach helps Kavita focus on the positive factors contributing to her current level of calmness.
Conclusion
Ultimately, the key to effective questioning lies in choosing the right questions and pacing them to allow for reflection and thoughtful exploration. By doing so, advisors can learn a lot about their clients and develop effective financial planning strategies while deepening their relationships. Understanding and applying these questioning techniques can transform the client-advisor relationship, making financial planning a more collaborative and insightful process
Have you come across any effective technique like this? please do share
P.S - You can read the other articles in this series here https://www.dhirubhai.net/pulse/engaging-clients-through-meaningful-conversations-fa-12-suri-cfp-lumdf
Also, see Communication Essentials for Financial Planners: Strategies and Techniques, Dr. John Grable and Dr. Joseph Goetz