Fact-finding sounds like a dry data-gathering exercise for collecting financial information. While the process often is cited as one of the top pain points among an advisor’s duties, it can be the moment when prospects and clients become convinced that their advisor is theirv trusted ally.

“When done correctly, the fact-finding process should feel to the client like they’re out for coffee or lunch with a friend, not like they’re just sitting with someone who is reading a list of questions so they can check off some boxes,” said Jennifer P. Mann, MBA, CFP, a 21-MDRT member. “Fact-finding is a really great opportunity to connect with and get to know your client.”

The questionnaire

Many advisors send a questionnaire or checklist to be completed before the first appointment so that session can be spent productively getting to know the prospect’s needs and goals, rather than filling out paperwork. Along with basic information about assets, liabilities, employment and family, the fact-finder that business partners Jeannine Resteiner Citoli and Warren Stickney send — either a paper copy by mail or a fillable PDF through email — asks respondents to rate their confidence, comfort and satisfaction with their current estate plan, their financial plan, the advisors they’re working with and their general financial knowledge, among other areas. The scale of answers ranges from super satisfied to completely unsatisfied.

“It really guides us as to whether people need to start at square one or if we can elevate our approach a little bit more if they’re looking for specific things like long-term care or estate planning,” said Citoli, a 22-year MDRT member.

The confidence-measuring information gives Stickney, a 32-year MDRT member, a peek into the mindset that the prospective client is walking in with.

“If they’ve given us their pain points, it would be irresponsible of me not to address those initially and acknowledge what their fears are, even if the fears they have may not be the fears that they should have,” Stickney said. “Also, if somebody checks all the boxes and they’re super satisfied with everything, the question then would be: ‘Why are you meeting with me?’ Maybe I would be valuable to them as a second opinion.”

In instances where the prospect does not provide basic information before the first appointment, Citoli and Stickney typically will reschedule until they do. 

“If we don’t get basic information up front, then why do the interview?” Stickney said. “The challenge in all of this is: Can we evoke enough trust upfront, or do they value the referral source that sent them to us enough that they will give us this information? Because this is a trust relationship.”

Jamie McIntyre, CFP, used to ask clients to prepare a “budget” as part of his fact-find — download the last 90 days of bank and credit card statements, use those to prepare a 12-month budget spreadsheet and send it in. But only 30% did so. The budget was creating tension with clients, so McIntyre’s team delved into what clients really want and identified two areas that made all the difference. First, the team found that clients subconsciously associated the word budget with sacrifice and something that limited their lives. So, the spreadsheet name was changed to “spending planner.” That switch transformed fact-finding into a process about achieving what they want out of life. Completing their spending planner identified which expenditures were important for attaining their goals and which were not. The second move was complementing the planner with a “spending plan,” an advisor-prescribed outline that provides structure and holds clients accountable to their spending planner. Since then, the fact-finder completion rate soared to 100%.

“The paradigm shift for clients was that they moved from sacrifice — stop spending — to empowerment,” said McIntyre, a 14-year MDRT member. “They now spend on what is important to them.”

How much do you make?

For some prospects, being asked to disclose their income to an advisor they’ve just met can seem rude. But Joseph Tan, ChFC, CLU, an 18-year MDRT member, gets them to open up by employing technology and a little psychology. The tech is the proprietary software he created that runs hundreds of formulas simultaneously to calculate financial ratios. But instead of asking for income and asset information,
he starts with expenditures.

Tan tells clients, “Success comes from habits, and the first part of our analysis is about your habits.” He asks what the prospect pays for utilities, rent and a litany of expenses, and then points out line items that have room for cost cutting.

“Now that we’ve looked at your habits, let’s make the ledger more complete. How much do you earn? Let’s look at the ratio between how much you spend and how much you earn,” Tan continues. “Now they’re knee-deep into this exercise. It’s a gradual process. I tell them: I know this is an experiment. Why don’t you tell me what you want to tell me.’” 

He asks about how much stock they own, their income and other assets, enters those numbers into the app and shows how the ratios change on a computer screen. When they say they don’t have any more money in the bank, Tan can show them that their financial ratios are not so good. “Then they’ll say, ‘Well, actually I have a bit more money. Can you put that information in; I want to see what happens.’ As the customer experience gets better, they’re more comfortable. I’ll tell them that the quality of my advice depends on the quality of the information you give me. If I’m going to do a global risk management project for your finances, you have to tell me everything.”

Meeting questions

Kerry T. Wallingford, RICP, ChFC, a 25-year MDRT member, has about 50 questions at the ready, but she doesn’t plow through them like a script or ask every single one. During the first appointment, she won’t even ask how much money a client has or where their assets are. Instead, the direction she takes during the first meeting is determined by what happens after her first question: What do you want to get out of this meeting? Another way she asks that: What is more important to you right now?

“It’s not about what we’re telling our clients — it’s about what they’re telling us that they need and want. If we can listen and hear that, it gives us useful knowledge to use later,” Wallingford said.

Her favorite fact-finding question: What’s your most valuable asset?

“I ask that not to find out how much they have, but how they value themselves or their family,” Wallingford said. “It’s a values question wrapped up in an asset question.” If the client answers that it’s their spouse or kids, that tells her their focus is beyond their money. “I help people protect what they love. If they’re just thinking about money, I might not be the best fit for them.”

Wallingford also asks whether the client has ever worked with an advisor before and what that was like. The answer could reveal why that person is not working with an advisor anymore or if there was a falling out. Another query asks, on a scale from 1 to 10, how committed they are to changing their ways. She also inquires as to whether there are people, perhaps a relative, who they look to for financial guidance. If so, she asks whether that person should be brought into the conversation, so they can understand what we’re talking about.

“It helps me present a potential objection in a way that the client can say, ‘Oh, well, I don’t need that person.’ So, I’m kind of preempting a strike,” Wallingford said.

Toward the end of the conversation, she prompts clients with: “In my financial plan, the only thing I care about is …” Then she stops to listen. Sometimes there’s an awkward stretch of silence as she waits for a response.

“I just let them think. If you don’t have those silences, you don’t have the client telling you what it is they want,” Wallingford said. “You’re the one telling the client, and that doesn’t work. Understanding the client from the perspective of what it is they really want and what they’re asking for gives you the power to use their words back at them. I’ll bring back what they said in the opening interview, and we might be talking about wealth transfer or the fact that they’re prepaying their mortgage. I’ll bring that up and say, ‘Let’s talk about how prepaying your mortgage impacts you financially.’”

Andreas T. Dailey Sr., CLTC, a 27-year MDRT member, is another advocate for asking the question, then waiting for the client to talk. Then ask another question and keep quiet again.

“Sometimes that’s pretty difficult. If I’m talking to the client and holding a pen, I look straight down at the pen in my hand and the paper. I don’t say a word and just stare at the tip of my pen,” Dailey said. “The silence is uncomfortable, but you want the client to know you are demanding that answer. I’ve sat for two minutes sometimes, just staring at that pen tip on the paper, but that is where you get the answer.”

He’ll even rephrase some questions he already asked. Then after the client responds, he’ll repeat their answer and ask: Besides that, is there anything else?

“You have to get to the core issue, and sometimes the client gives you a fluff answer up front, and they give a second fluff answer,” Dailey said. “But once you repeat it and rephrase it, you start to get some core responses.”

Out of all the W questions — who, what, when, where — Dailey’s favorite to ask is why. “Once you understand the why, everything else comes into play, and you get to know what makes the client tick,” he said.

The fact-finding method Paul Milbourne initially used was not very good at building rapport with clients. The four-year MDRT member’s meetings used to be very structured and followed the same format, and he was finished after he asked all his prepared questions.

That changed after he asked his mentor, Terrence James Brain, a former MDRT member and Top of the Table qualifier, to accompany him and meet with senior-level business owners to discuss their insurance needs. After the second session, Milbourne closed his book and reported to Brain his take on what the prospects’ problems were and how to solve them.

“Terry turned around to me and said, ‘Paul, you are 100% correct, but they haven’t articulated the problem they want solved to us yet. We’re only solving our problem, not their problem. We need to have another meeting with them,’” Milbourne said. “That’s when I learned the concept of asking a question when in doubt. When you think the meeting is over, ask another question. Then keep asking questions.”

The pair met with the business owners seven more times over the next 13 months to delve deeper into the senior executives’ succession and continuity concerns. The outcome was a plan that was much different from what the owners articulated during the early meetings. “Most importantly, it was genuinely their problem that we were solving. The problem I initially thought we were solving was a $30,000 annual premium. The problem they wanted to solve was a $120,000 premium. That was one of the big aha moments in my career that opened my eyes to the value of asking questions and then asking more questions.”

Milbourne’s online fact-finder takes clients about two minutes to complete. It gets the collecting of basic information out of the way and helps him to profile his client. But he doesn’t make assumptions about what they want when he looks over the pre-meeting answers. Rather, he begins formulating questions to discover what they’re emotionally connected to: What are you concerned about? What problems would you like solved, and what does success look like to you?

“In the life risk space, anyone can go online, go to a calculator and work out how much life insurance the calculator says they need,” Milbourne said. “That’s absolute logic and fact, but there’s no logic in emotion.”

To tap in to limbic psychology, one question he asks clients is: If you were sick or injured and unable to work, how long would you be comfortable without a salary before you would feel uneasy about your bank account?

“They need to have that light bulb moment where they realize, If my salary stops, I’ve got a big problem. Having them verbalize that helps set the scene for the importance of replacing income, and it allows me to introduce critical illness or trauma insurance and where it might fit in their world,” Milbourne said.

He’ll also share true stories to pull out more about how they would feel if the breadwinner or spouse is gone — not to scare them into buying insurance but to show two different outcomes. One anecdote involves his cousin who was diagnosed with bowel cancer in her early 30s. The family had little money and no insurance, so her husband had to continue his job driving a truck and recruit relatives to babysit the children while she was in the hospital for treatments. The opposite outcome was a brother-in-law who died from cancer in his mid-30s. But he had coverage, so his sister was able to accompany her husband during his 18 months of treatments and didn’t have to work to pay the bills and mortgage.

“So, I put a clear idea in their head about what happened to someone like them and how it played out,” Milbourne said. “It gives you polar opposites about someone who had no financial worries in a bad time and someone who did.”

A leading question he asks is: If we’re sitting here three years from now, what does success look like in our relationship and for you? What are you looking to achieve? Those answers have included paying off a mortgage, setting aside enough money for a child’s education and obtaining financial security for the family. That question can elicit responses that haven’t been mentioned when answering the other queries.

Wallingford also asks: If we’re sitting here a year from now, what three things would we have accomplished that would lead you to say working with me was a great decision?

“Sometimes my clients can’t even answer that question,” Wallingford said. “If they don’t know what they need from me, I don’t know how to fill it. If they don’t have something specifically that they want me to accomplish, they might not be a good fit for me.”

Fact-finding may be less about gathering facts and figures and more about people’s wants and desires, which are universal — protecting family and loved ones. 

“I’m not asking them financial questions, like how much their mortgage is, or how much they are saving. That comes later when they’ve decided they want to work with me.”

Notetaking methods

As for taking notes during client meetings, many advisors rely on a pen and notepad, and some are looking for alternatives to save time and improve accuracy. Wallingford conducts most of her meetings through videoconferencing and types in the answers.

“You learn a lot by listening, so I don’t make judgments when they’re answering the questions. I never respond when they’re answering. I just type and type,” Wallingford said, adding that she is exploring other notetaking options.

After a meeting, Stickney dictates his notes into Otter.ai, which provides a summary and action items. Milbourne uses FinTalkr, a recording and transcription service that enables advisors to comply with Australian standards for privacy and data security. Zocks, Jump, Filenote.ai and FinMate.ai are other recording and transcription tools created with financial services professionals in mind that use artificial intelligence.