Profiling?

or Register to post new content in the forum

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Jan 17, 2010 2:31 pm

I guess most of us would agree that a good fact finder is the key to figuring out how to help a client. I find this is one part of the job I especially enjoy. Used to have a long list of questions, then gradually shifted to more of a conversational aspect, starting with 'What's on your mind today,' and, 'So, tell me about your family,' but keeping a list of questions handy if it bogs down.
Anybody got any good questions they use. I'd be especially interested in risk profile questions. (Those canned questionaires the firm or mutual fund company give you are useless, imo.)
And what questions to you ask if you've only got a minute to figure out if someone has money. I've had guys tell me they wanted to invest 'a large sum' only to find out they're talking about 5 grand. And I've had people tell me they don't have much, but when you get through the statements it can be well into six figures. If you get to the fact finder, it all comes out, but sometimes I've wasted time setting up an appt. with a prospect with literally no money.



Jan 17, 2010 3:30 pm
buyandhold:

I guess most of us would agree that a good fact finder is the key to figuring out how to help a client. I find this is one part of the job I especially enjoy. Used to have a long list of questions, then gradually shifted to more of a conversational aspect, starting with 'What's on your mind today,' and, 'So, tell me about your family,' but keeping a list of questions handy if it bogs down. Anybody got any good questions they use. I'd be especially interested in risk profile questions. (Those canned questionaires the firm or mutual fund company give you are useless, imo.)And what questions to you ask if you've only got a minute to figure out if someone has money. I've had guys tell me they wanted to invest 'a large sum' only to find out they're talking about 5 grand. And I've had people tell me they don't have much, but when you get through the statements it can be well into six figures. If you get to the fact finder, it all comes out, but sometimes I've wasted time setting up an appt. with a prospect with literally no money.





The questions depend for me on how much time I have with the client to talk. Much easier to ask a bunch of direct questions face to face for me at least. Over the phone I use more of a conversational tone.



For the 401k I'm opening right now I sit down with each employee for 1/2 hour initially.



Now keep in mind I already have a list of thier current 401k balances and allocations but to me that means nothing.



I'm pretty direct in these meetings because I need to determine if this is a peson I'd like to persue as a client outside of the 401k business.



In this case all the clients were under 60. Here are a lot of the questions I ask.



What is your current annual salary plus any annual average bonus



How long have you been with your current company



Are you married and if so does your wife currently work and if so what's her aprox annual salary and where does she work and for how long



Do you have any children and if so what ages and do you currently have any 529 plans set up for them. Explain the cost of education to them and the importance for saving



If your wife is working does she currently contribute to a 401k ( if so get the statement )



Do you or your wife have any 401k's from previous employers



Do you or your wife have any other ira's



Do you and our wife have any other type of non-ira investment accounts



For whatever reason I find people consider cd's and annuities not part of their investment portfolios so I always ask if they have any bank cd's or annuities and if they do have cd's either get statements or ask them to get you a list of thier current maturities and interest rates



Ask them if they currently have a mortgage and if so what is the interest rate,remaining balance,remaining years on it and approx value of home ( possible refi unless they have negative equity )



Do they own more than 1 property ?



Also do they currently have a heloc either being used or untapped and if so find out how long it's been active and the current terms of it ( possible replacement with better terms )



Do they have any other liabilities. credit card debt ( if so at what interest rate ) car loans etc.



Do they have any sort of life insurance ( or if hey are 50's or older ask them about LTC )



If they have substantial money what tax bracket are they in ? Are they subject to AMT ?



Once you get all this info then you an start asking them about their own investment philosophy. What are the goals they wish to accomplish. Define their tolerance for risk right away and stress diversification.When do they wish to retire. Do they have any major expenses coming up in the forseeable future



Unless I'm investing money for them in fixed income I tell them i order for me to make proper recommendations to them I need to see all and any of thier statements ( even if they are happy with where they are at ) because I want to make sure I dont overconcentrate them in any particular area)



Dont give them false hope if they think they are going to get rich with some unrealistic rate of return. Underpromise and overdeliver.



If older have they updated their will recently ?



If this is a cold call prospect you wont be able to do much of what I just said. Just try and determine if they arent a moron and open the account and set up an appointment.



It took me 10 years to figure all this out. When I first started in the business I just wanted to sell my clients bonds and stocks. Damn if knew now what I should have known then



BTW At least for me I walk in with a blank legal pad and I take notes. I dont like using questioneers or any firm BS. It's just me and the client talking



Hope this helps











Jan 17, 2010 3:58 pm

NYGuy - good post - very thorough on the questions.

I like that you ask the straightforward financial planning questions first then go to philosophy.
Do you have any specific process for determining risk tolerance?
I am also not a big fan of the firms questionnaires but my b/d has what i think is a really good Inv Policy Questionnaire that scores on a point system then uses the point total to recommend an allocation. I use it, but then adjust the result with what i know about the client. Usually it comes up fairly accurate, at least in the right neighborhood.
I also make them sign it and tell them if they start reacting to the market and going outside their discipline, we will look at the document again and have a discussion before we make strategic changes.
Jan 17, 2010 4:13 pm
Sportsfreakbob:

NYGuy - good post - very thorough on the questions.

I like that you ask the straightforward financial planning questions first then go to philosophy.

Do you have any specific process for determining risk tolerance?

I am also not a big fan of the firms questionnaires but my b/d has what i think is a really good Inv Policy Questionnaire that scores on a point system then uses the point total to recommend an allocation. I use it, but then adjust the result with what i know about the client. Usually it comes up fairly accurate, at least in the right neighborhood.

I also make them sign it and tell them if they start reacting to the market and going outside their discipline, we will look at the document again and have a discussion before we make strategic changes.





In general I'm more on the conservative side so I generally position my clients more towards my own style.



Each client I treat differently but basically I just use my own judgement on how to treat them based on how they answer my questions and talk about themselves and their goals



Even if someone is aggressive I have them dial down the risk to a certain extent. Pretty much all my clients have some sort of fixed income in their accounts. If a client wants to be conservative I never try to have them deviate from that because they will just blame you later if things go bad



If a client wants to be very aggressive I'm generally not going to take them as a client. I just dont need the headaches anymore



When I was competing for this current 401k plan I made it clear to the owners that if they have 20 employees chances are I'm going to have 20 different recommendations as far as which % of money should go into which funds etc.