Questions Financial Advisors Should Ask When Working with Couples

This Valentine’s Day, skip the flowers and talk about money!

Valentine’s Day is a time to celebrate love, but it’s also a great opportunity for your clients who are couples to reflect on their shared future, regardless of their age or stage in life. Money management and wealth planning are great places to start, and this is your wheelhouse as a financial advisor. 

Couples who communicate about their finances are more likely to achieve their long-term wealth goals, especially if they have these discussions early on and frequently. It can help build trust, prevent conflicts, and set a foundation for a strong financial future together. This can also prevent unexpected debts, loans, and any financial infidelity.

As a financial advisor, your role is really important. Having open and honest conversations with your coupled clients will help them identify their financial goals and create a plan to achieve them.

In this blog post, we’ll discuss how you can set your clients up for success, ensuring you ask the right questions and focus on honesty as the best policy.   

Questions to ask new clients who are couples

Asking clients the right questions is key! This makes it easier and more efficient to provide them with the necessary information and guidance to achieve their wealth goals. 

It’s also crucial to be an active listener. Many clients are aware that they aren’t the expert in financial planning; you are! But, they are the expert in their own lives and know which goals matter most to them.

Here are some questions to ask couples to get them thinking about their wealth goals. Let’s start with couples who are in their 20s and 30s. 

Couples in their 20s and 30s

For couples in their 20s and 30s, the focus should be on building a solid foundation for their financial future. This may include paying off any outstanding debts, building an emergency fund, and starting to save for retirement. Questions to ask may include:

1. What are your short-term and long-term financial goals?

This can help them establish a solid financial foundation for their future. Couples can ensure they’re on the same page and working towards a common goal or important milestones, such as buying a home, starting a family, and saving for retirement, which can prevent conflicts and misunderstandings. 

2. Are you currently saving for a down payment on a home?

Buying a home is a significant financial decision and one that should not be taken lightly. A typical down payment for a home is 20% of the purchase price, but first-time home buyers may have access to special programs that can help them with a lower down payment.

3. Are you saving for your current or future children’s education?

Couples can increase their chances of achieving the dream of providing a quality education for their current or future children. It’s helpful to understand that education expenses can vary widely depending on the type of education and institution their child chooses, and also the cost of education is rising. Remind them to have realistic goals and to start saving early.

4. Do you have any outstanding debts or loans that need to be paid off?

Couples must be open and honest with each other about their financial situation, including any outstanding debts or loans that need to be paid off, such as student loan debts, mortgages, car loans, credit card debts, etc. By paying off debts early, couples can free up more money in their budget to save for other goals, such as retirement.

5. How much are you currently saving for retirement?

Starting their retirement savings plan early is a good idea, whether it’s through an employer-sponsored retirement plan or through their own business. Couples will want to discuss the type of retirement plans they have and understand the different contribution limits, tax benefits, and withdrawal rules to maximize their retirement savings.

6. Are you contributing to an emergency fund?

An emergency fund can provide a financial safety net in case of unexpected expenses or events, such as job loss or income reduction, natural disasters, or family emergencies. It can also be a buffer for future plans, such as moving, having a baby, and more. Plan on having 3-6 months of expenses in your savings as an emergency fund.

Couples in their 40s and beyond

For couples in their 40s and beyond, the focus should be on maximizing their savings and investments to ensure they have enough to retire comfortably. Questions to ask may include:

1. How do you envision your lifestyle in retirement?

Retirement is a time to explore new opportunities and enjoy the simple pleasures of life. A few things your client might be thinking about are downsizing their home, traveling, a part-time job, new hobbies, volunteer work, and spending time with friends and family. 

2. Are you on track to reach your retirement savings goals?

Develop a comprehensive picture by reviewing these few things: your client’s statements, employer-sponsored retirement plan, Social Security benefits, pensions, other assets, and spending habits. Discuss what it would take to help them achieve their financial goals. And ask them how they want to receive their retirement income (e.g. annuity, lump sum, etc.).

3. How much do you think you will need to save for retirement?

When thinking about retirement expenses, couples need to factor in living expenses, healthcare expenses, travel and leisure, debt repayment, tax implications, inflation, and other contingencies. Keep in mind, healthcare costs tend to increase as people age, and there’s some uncertainty around future health. 

4. Are you covered by insurance?

Long-term care insurance is a type of insurance that helps cover the cost of long-term care services, such as in-home care, assisted living, or nursing home care. It’s important for your clients to plan for in their 40s and beyond because it can be expensive and helps to avoid any financial surprises.

5. Have you thought about estate planning?

Estate planning ensures that your client’s assets are distributed according to their wishes after they pass away. With your guidance as their advisor, you can help them to leave a financial legacy, minimize taxes, protect assets, plan for incapacity, and avoid probate. 

6. Are you taking advantage of catch-up contributions to your retirement accounts?

Catch-up contributions can be an important tool for clients who are age 50 and older to boost their retirement savings, maximize tax benefits, and increase their retirement income. Help them understand the benefits of these contributions as well as the limits, and how to make these contributions.

BONUS questions

Financial advisors, here are a few more questions you can ask.

1. What is your risk tolerance?

Offensive investing is a “buy and hold” approach for those focused on maximizing their return. On the other hand, defensive investing is a “buy and sell” approach for those who wish to protect what they already have. To find out which type of investor you’re working with, we recommend they take this short risk tolerance questionnaire to find a portfolio that fits their unique needs. 

2. Have you ever worked with a financial advisor before?

Asking this question can help you understand your client’s expectations and their level of experience with financial planning. It can also help you tailor your approach and your recommendations to the client’s specific needs.

3. What does your current financial health look like? Assets? Debts? Income vs. expenses?

By understanding the client’s current financial health, you can help them understand their current situation and how it relates to their goals, create a personalized plan that helps them achieve their goals, and avoid any potential pitfalls. Additionally, it’s also an opportunity to show your client that you care about their financial well-being and that you’re the right advisor for them.

4. Do you have any other financial concerns or questions?

This question helps to build trust and establish a relationship of open communication with your client. It can also help them feel more confident and secure about their financial future.

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Conclusion

When it comes to financial planning, it’s important for couples to have open and honest conversations about their goals, priorities, and concerns. However, many couples struggle to have this conversation, often due to feelings of embarrassment, lack of knowledge, or fear of conflict. But by not having this conversation, couples may miss out on opportunities to build a strong financial foundation and achieve their goals together.

If couples struggle with these conversations, help to be their guide. As a financial advisor, it’s important to help your clients by asking them the right questions and providing them with the necessary information and guidance to achieve their wealth goals. 

This Valentine’s Day, encourage couples to think about their financial future and set goals to ensure a secure and comfortable retirement for themselves and their loved ones. And remember, Artesys is always here to take the work out of retirement for you and your clients.