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The art of investment client profiling: the key questions an adviser should ask
Financial advisory

The art of investment client profiling: the key questions an adviser should ask

The design and implementation of an investment strategy is a process in which the advisor and client must work closely together.
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16 OCT, 2023

By Constanza Ramos

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In the investment world, the key to success lies in understanding your clients. For a financial advisor, asking the right questions is like mapping a roadmap to wealth growth.

The key to providing exceptional advice to a client lies in accurately defining their investment profile. The design and implementation of an investment strategy is a process in which the advisor and client must work closely together. This process is not only based on financial aspects but also encompasses personal factors that will influence the investment proposition throughout the investment cycle.

The art of client profiling in investment advice

Natalie Kempster, Head of Client & Proposition at Argentis Financial Planning

As a financial adviser, it is important to ask the right questions to profile clients. This will help you to understand their financial situation, risk tolerance, and financial goals. This information is essential for developing a plan that meets the client's individual needs.

Here are some specific and open questions that I always ask clients in meetings:

  • What are your financial goals and what do you think is in the way of achieving them?
  • What is your time horizon for achieving your goals?
  • How do you define risk?
  • Can you talk to me about your previous experience of investing?
  • What percentage of loss in your overall portfolio would make you feel uncomfortable?
  • What does retirement look like for you? How do you think you'll spend your time?
  • What does security mean for you financially?
  • How much cash at the bank do you need as an emergency fund to feel comfortable?

In addition to these general questions, I want to ask clients about their ESG preferences. This will help to understand their values and to select investments that align with their goals.

Here are some specific questions that I ask clients about ESG:

  • Are you interested in investing in companies that are committed to environmental sustainability?
  • Are you interested in investing in companies that have good social practices, such as diversity and inclusion?
  • Are you interested in investing in companies with good corporate governance?
  • Are there any specific ESG issues that are important to you?

The adviser's role is to ask the right questions and to listen carefully to the client's responses in order to develop a comprehensive understanding of their needs and support the client in making the right decisions.

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