Topic 3 - The Discovery Process

Question 1

Range of means to develop an appropriate level of knowledge of client

Answer 1

Data and Risk Profile Questionnaire
Interviews
Copies of Documents
Records of Meetings
Discussions with clients accountants, lawters

Question 2

Purpose of the Initial Meeting

Answer 2

To establish a relationship
Planner learns about client
Client learns about planner

Question 3

Why is technical skills and knowledge not sufficient

Answer 3

Clients may

• have difficulty confiding information
• feel best interest not being looked after
• fail to understand and engage with strategies

Question 4

WHen asking questions and discussing with client, to understand them you need to focus on

Answer 4

History - Where previous
Transition - Where now
Principles - How i get there
Goals - Where I want to go

Question 5

A genuine and empathetic approach

Answer 5

Builds lasting relationships

Question 6

Financial Monologue

Answer 6

Asking questions you already know the answer to as a lead to a sales pitch

Question 7

Financial Dialogue

Answer 7

Asking questions which centre around the life of the client and financial implications of what was going on in life.

Question 8

11 reasons to stop telling and start asking

Answer 8

A good question allows people to space their stage of life

Inquiry elevates their intellect and reason

Intelligent inquiries recognises individuals uniqueness

Questions reveal priorities and issues of importance

Raise personal awareness

Disarming effect

Reveals connection points

Turn conversations into a journey

Question 9

Good Communication involves the following approaches

Answer 9

• Knowing the time to build, maintain and repair trust
• Listen more than talk
• Check and clarify assumptions
• Being empathetic and show understanding
• Knowing clients issues come first

Question 10

Effective Question Types

Answer 10

Open 
Closed
Probing
Reflective
Challenge
Hypothetical

Question 11

Open Questions

Answer 11

Invites the other person to talk

• ‘Why have you come to see me’
• ‘What do you picture when you think retirement’

Question 12

Closed Questions

Answer 12

Invite a brief reponse Eg yes or no
‘ Do you mind if we move on to discuss’
‘ Would that be okay with you’

Question 13

Probing Questions

Answer 13

Used to explore more, and gather more details on a topic

‘ Can you tell me more please’

Question 14

Reflective Questions

Answer 14

Used to summarise a feeling or message

‘ Would it be fair to say that’

Question 15

Challenge Questions

Answer 15

-Examine assumptions, conclusions, and interpretations

Question 16

Hypothetical Questions

Answer 16

Scenario based questions used to probe and explore options and allow client to identify blind spots
‘ Have you thought about what you would do…’

Question 17

Ineffective Questions

Answer 17

Multiple Questions
Ambigious or Vague Questions
Implied Questions
Aggressive Questions
Leading Questions
Rhetorical Questions

Question 18

Multiple Questions

Answer 18

Cover a number or issues at once

Question 19

Ambigiouse or Vague Questions

Answer 19

Confuse

Question 20

Implied Questions

Answer 20

Reflect values or opionions

Question 21

Aggressive Questions

Answer 21

Attack or confront

Question 22

Leading Questions

Answer 22

Get the answer you want

Question 23

Rhetorical Questions

Answer 23

Do not need an anwser

Question 24

Types of Listening

Answer 24

Active
Attending
Encouraging
Reflective

Question 25

Active Listening

Answer 25

Cluster of attending encouraging and reflecting skills used together to pay attention to the content and feelings that comprise the whole message
Give full attention

Question 26

Attending Listening

Answer 26

Body language and words to provide feedback
Appropriate use of
- Verbal responses
-Eye contact 
-Posture
-Body Movement
-Personal Space
- Environment
- Avoid distractions

Question 27

Encouraging Listening

Answer 27

Invites talking without pressuring
Demonstrate empathy and encourages speaker to continue
A pause or silence also works

Question 28

Reflective Listening

Answer 28

Reinsates/mirrors feelings or content of the message

• Paraphrasing
• Reflective Statements
• Clarifying Statement
• Summarising

Question 29

The Active Listening Method

Answer 29

Helps bypass filters that distort speakers message
Acknowledges or provides feedback
Enables speaker to reach own decisions
Confirms communication and facilitates understanding

Question 30

Barriers to Listening

Answer 30

Intrusion of own values or attitudes
Selective Listening
Drawing Early Conclusions
Prejudging
Dislike of speaker
Desire to change speaker
Perception that speaker lacks creditability
Boredom
Preoccupation

Question 31

Effective Client interview skills include

Answer 31

Discovery focused interviewing
Communicating process clearly
Avoiding jargon
Listening well
Managing yourself

Question 32

How might a planner develop a comprehensive insight and level of knowledge about the client in order to be able to provide appropriate advice?

Answer 32

• Risk profile and client data questionnaire
• Interviews, which include both quantitative and qualitative forms of enquiry
• Records of all telephone, fax and email communication with the client
• Copies of the client’s financial documents such as tax returns, PAYG certificates, bank statements, share certificates etc.
• Discussions with other professionals serving the client, such as lawyers and accountants (providing client’s consent is obtained)

Question 33

Discuss the difference between qualitative and quantitative client interview questions, and provide examples of each.

Answer 33

Quantitative questions typically include closed questions which focus on what and how much a client has. Qualitative questions attempt to identify the ideas, values, beliefs and experiences which shape the client’s current financial position, their financial priorities, as well as their ultimate goals and objectives.

Question 34

What are the potential risks of placing too much emphasis on quantitative lines of enquiry only?

Answer 34

• have difficulty confiding personal information
• feel their best needs and best interests are not being looked after
• fail to understand and engage with the strategies and recommendations made

Question 35

Briefly discuss the Internal and External benefits of effective questioning

Answer 35

Internal Benefits
• A good question allows people their space on the stage of life
• Inquiry elevates their intellect and reason
• Intelligent inquiry recognises an individual’s uniqueness
• Questions reveal priorities and issued of importance
• Good questions raise personal awareness and often help save clients from themselves

External Benefits
• Good questions have a disarming effect
• Biographical inquiry reveals possible connection points
• Good questions turn conversations into a fascinating journey instead of a “death march”
• Questions unlock the memory bank
• Questions allow the client to be the co-pilot instead of the passenger
• You may actually learn something

Question 36

Briefly discuss the value of a good question, beyond simply eliciting information.

Answer 36

• get someone to think
• get someone to recognise the consequences of their actions
• encourage individuals to identify solutions themselves will often result in greater engagement with the solution

Question 37

What is the value of open questions in the client discovery process?

Answer 37

By asking open questions the listener is able to encourage the other person to share his/her more personal knowledge, feelings and opinions about something, and the response is usually more qualitative than quantitative.

Question 38

Describe the ‘Funnelling Approach’ to interviewing

Answer 38

Funnelling is a 3 stage process:
1. Open
The Funnelling process generally begins by asking an open question. These generally start with What, Why, When, Who, Where, How, or Tell, Explain, Describe. The Broad questions used to gather as much information as possible, and can be used to set the agenda of the conversation.
2. Probe
Use probing questions to explore further, by asking follow up questions based on what the speaker has already said to elicit more useful information
Probe to get the nuggets of detail from the interviewee to funnel the responses into useful information.
3. Close
Use closed questions to qualify, summarise and confirm what the client has said - i.e. summarise back what you understand from the client’s responses and confirm that you have got it right. This often allows the client to add further detail they have missed out and it checks the adviser’s listening skills.

Question 39

Identify three types of ineffective questions and identify the problem(s) caused by each.

Answer 39

• Multiple questions that cover a number of issues
• Ambiguous vague questions that confuse
• Implied questions that reflect your values and opinions
• Aggressive questions that attack or confront the other person
• Leading questions to get the answer that you want
• Rhetorical questions that do not need an answer

Question 40

Explain the cluster of active listening skills

Answer 40

Active listening comprises a cluster of attending, encouraging and reflecting skills used together in order to pay attention to the content and feelings that comprise the whole message
• Attending skills – to focus on the speaker,
• Encouraging skills – to invite the speaker to continue, and
• Reflecting skills – to mirror the content and feelings in the message

Question 41

When is active listening most useful?

Answer 41

Active listening is useful in professional and personal situations to perceive or sense a situation from the point of view of the speaker, giving the listener the ability to see a situation simultaneously from multiple points of view.

Question 42

List four benefits of using active listening skills.

Answer 42

• helps the listener to bypass filters, that can distort the speaker’s message;
• acknowledges and provides feedback to the speaker
• enables the person to reach own decisions and form his or her own insights; and
• confirms communication and facilities understanding

Question 43

List four barriers to effective listening caused by the listener.

Answer 43

• boredom;
• dislike for personality or physical appearance of speaker;
• a desire to change the speaker; prejudging;
• intrusion of own values or attitudes;
• drawing early conclusions;
• selective listening;
• perception by the listener that the speaker lacks credibility; and
• preoccupation with other matters.