Anthonia Hui of AL Wealth Partners explains why it is so critical to ask clients questions, and outlines the types of questions which work as well as the approaches that wealth managers should adopt.
Date: Mar 2012
Advisers cannot assume because this always puts them into a dangerous situation, she said.
The worst situation is that a lot of people, due to their ego and self-assumed knowledge, think they know it all, said Hui. But the world has changed so much and so fast that they don’t know it all. The most important thing, therefore, is to prompt questions to clients, she explained.
However, the skill of questioning is very important, and takes time to perfect.
Important questions to ask clients
If an adviser wants to get to know a client’s background for someone they want to work with, Hui said the best place to start is with something the client feels comfortable talking about.
For example, if an adviser is going to see a businessman, the first thing to talk about is his business, because they will be happy to talk about this. And if the client mentions something in response to the questions about a topic for which the adviser has some knowledge, this should be used as a hook to pursue further dialogue, she explained.
Through this further questioning, the adviser can then potentially find out more information about, for instance, the company’s turnover, competitors, profit margin and any hurdles they face.
For example, if the conversation covers any trips the client might make to the US, then there might be tax issues which pose a threat and could be a red flag in the relationship if the adviser acquires that client, said Hui.
This shows how a simple conversation can provide simplistic but important information for the relationship, she said.
Not being able to answer a client’s question
According to Hui, if an adviser doesn’t know an answer to a client’s question, then it is fine to tell them that this is not an area of their expertise, or the information is not available to them, or something along those lines. And then the adviser should say that they will find out more information and come back to the client.
Nobody expects an adviser to know everything, she said, so for anyone who positions themselves as somebody who knows everything, then there is a high chance of this leading to a bad situation.
Hui also said that the issue over “losing face” is overblown. For advisers who cannot deliver or are full of empty promises, this will lead to not only a loss of face, but also credibility, which she explained is more detrimental to the adviser’s whole career and reputation in the market.
Classic mistakes in communication with clients
Advisers sometimes stop short of digging deeper with clients, said Hui. For example, if a client says they are conservative, some advisers might assume the client means they want to hold bonds and keep cash, so won’t want to take risks.
However, the adviser might not quantify or qualify what a client means by “conservative”, she said. In Asia, for example, a lot of clients who hold HSBC shares think this makes them conservative. However, holding stocks can be very risky.
Advisers therefore need to remember, she explained, that the client’s value system and their risk assessment might be very different from how the bank defines it.