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Jul 01 2021

Questions that reveal important financial information

Find out what information is needed to quickly access a client's financial situation.

By Carlyle Fletcher, CLU

Topics Covered

Fact-finding

What information is really needed to assess someone’s financial situation? Our industry has seen many fact-finders and financial-needs analysis forms, some ranging in length from four to 15 pages long. While information is good, obtaining all this information in a timely manner can sometimes prove to be a major challenge. As such, it delays the actual sales process and, in some instances, the sale never materializes. Our method is intended to work with the barest information necessary and obtain the additional information at subsequent meetings when the prospect becomes a client. 

This approach can be likened to that of an emergency medical team dealing with an accident victim. They deal with what is critical to save the patient’s life and leave the rest to be done when the victim makes it to the hospital. 

Our presentation should be so simple that even a 10-year-old child can understand it. Anytime we become too complicated, we will lose some of our prospects. 

When looking at a client or prospect’s financial information, we look at two things first. 

1. What you have 

Accountants and financial people refer to these as “assets,” but normal folks can refer to them as “what you have” for simplicity. This will comprise things like property, cars and money. 

What is most important, though, is how we ask the question. We can do it like this: 

  • Tell me, the house you live in — do you own it? If yes, approximately how much would you say it is valued at? 
  • Do you own any other properties? How much would you say they are worth? 
  • Do you own any vehicles? How many and what are their values? 
  • Do you have any other investments you would like to list? What are they, and how much are they worth? 
  • If you have to put a value on your cash or liquid assets — e.g., cash at bank, credit union balances, etc. — how much would you say they total? 

Then I would say, “Let me congratulate you on all that you have achieved, but let me ask you a question. If you had died last night, what would you like your wife [her name] and your children [names] to do with these things you have accumulated?” I would go through each item, asking him if he would like his family to keep it or sell it. I make a note next to the asset so that he and I will know what can be disposed of and what will be kept. 

2. What you owe 

In a similar way, I ask prospects about their debts: 

  • Is there a mortgage on your home, and approximately what is the outstanding balance? Do you have any loans outstanding against the other properties? If so, how much? 
  • Any motor vehicle loans? 
  • Any other loans not mentioned before? 
  • What is the average monthly balance outstanding on your credit card? 
  • Are any of these loans insured? (If it is, please ensure that you ascertain which policy is covering the loan.) 

Then we quantify the client or prospect’s needs, including debts, bills, education, spousal support and last expenses, before proposing a solution. 

Carlyle Fletcher, CLU, from San Fernando, Trinidad and Tobago, has been an MDRT member since 1986.