From "knowing" to "understanding": Going deeper in your client discovery process
Barry LaValley

Here is a project for you this year: Add a new layer to your client discovery process and see how much more you can find out about how your clients really envision their future. Your payoff is that you will do more business using different solutions, forge a deeper trust and position yourself as the kind of advisor they didn't know they were looking for.

Most advisors have a basic level of knowledge about their clients that comes from the "Know Your Client" information that they gather at the outset of their working relationship. But over time, you can augment this base of knowledge from conversations or quarterly update meetings.

Do you have a systematic approach to gathering information on clients that you won't find on a new account application form? If you don't, here's why you might want to consider it:

• You may be dealing with an aging clientele who are coming to grips with new challenges that supersede accumulating assets. How well do you know their real issues?
• Many financial planning solutions for 50-plus clients satisfy a client's immediate emotional needs rather than long-term asset gathering. What are your clients' "hot buttons" that you could push?
• Your clients may have experienced a number of life changes since the initial KYC information. Do you really understand their situation today so that you can provide solutions that they will see as relevant?

It comes down to this: How much do you really need to know about a client in order to be an effective financial advisor?

Breaking through
If you define an "effective financial advisor" as someone who can develop a plan for a client based on what the client tells them, then you only need to know what the client wants you to know. For example, if the client says that she wants to travel extensively in retirement; you could just say, "Okay, we'll build a plan for that."

However, if you want to develop a solid relationship that meets that client's emotional needs, you want to push them further with the information that you gather. What is it about your client that influences their decisions or sets up roadblocks despite your best efforts to provide sound advice?
Here are some things that you should probably know about your clients:

• Where did they get their education?
• How long have they been in their home?
• Are they looking at moving in the foreseeable future?
• When do they think that they will retire?
• What does retirement mean to them?
• What do they like about their job?
• What would they like to do if they weren't working at their job?
• What members of their family live in this area?
• What do their children do?
• What do their children want to do in the future?
• What causes would they like to contribute to with their resources?
• What are their hobbies and how do they spend their leisure time?
• What would they do differently if money were not an issue?
• If they only had five productive years left, how would that change how they live their lives?
• What clubs do they belong to?
• Where do they like to travel on vacation?
• What are their biggest health concerns?
• How much planning have they done in anticipation of their life transitions?

Creating a structured conversation
The hard information on the client—the details you would find on the new account application—is normally gathered by taking the client through a list of questions. The "soft" information comes from a non-threatening conversation. The challenge is to make this conversation seem as natural as possible. It may help to share some information about yourself or your life experiences to keep it a two-sided conversation.

We call this "the skill of the intuitive advisor." An intuitive advisor is one who can read a client's body language, tone and emotion and uncover the important "hot buttons" that will later be the focus of financial solutions.

An intuitive advisor is perceptive enough to know when a client is getting uncomfortable or feels threatened. This advisor also can change the focus of the conversation so that the client doesn't feel trapped or is afraid that there is a sale coming.

Using a conversation map
You should have a roadmap to ensure that you cover all the key areas of your client's life, so that you can identify those that require more exploration. When you are talking to your prospect, cover these areas in your conversation:

Focus your discussion on:

• Where have you been?
• Where are you now?
• Where are you going?

Taking a life transition approach to client discovery
The foundation of your enhanced discovery program should be to find out as much as possible about the life transitions that your clients may be concerned with. Most, if not all, life transitions have a financial consequence and your advice will help a client feel better about handling life's twists and turns.

These life transitions become particularly emotional after age 50. As your clients approach retirement (possibly their most significant life transition), they will be faced with:

• Health issues, affecting them or their spouse
• Relationship transitions with family and friends (empty nesting is a big one)
• Self-examination as they search for life meaning
• Financial transitions as they move towards retirement
• Workplace change, whether it be downsizing, moving to a new career, etc.

The life transition approach can be applied to the conversation map in order to fill out the information that you need.

Becoming a "total needs" advisor
The more that you know about a client, the more that you are able to offer a "total needs" approach to their financial plan. This often means multiple solutions rather than a single product, which in turn results in more revenue and stronger relationships.

If you strive to learn more about your clients this year and you modify your discovery process to use the life-transition line of conversation, you will create more of an emotional connection with your clients. That's important for your 50-plus client.

Barry LaValley is the President of The Retirement Lifestyle Center and a partner in The Life First Approach. His book, "Put the life into your practice" can be found at www.lifefirstapproach.com.