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By David GordonDirector, Eaton Vance Advisor Institute

Some questions are particularly powerful when talking with new clients or prospective clients. They invite clients to tell you much more, pave the way for long lists of follow-up questions and unlock the door to new dimensions of client discovery. Just as a "master key" opens multiple locks, a "master question" opens multiple avenues of conversation and is among the most valuable discovery tools available to an advisor.

Do you participate in an employer-sponsored qualified retirement plan?

This "master question" invites an answer because it is not too personal. Rather, it is a perfectly logical question for an advisor to ask. If the new clients answers, "Yes," then you have an invitation to ask a wide range of follow-up questions. These could include:

  • Do you hold any employer stock in that account?
  • Did your employer contribute those shares, or did you purchase them or both?
  • Are they actual shares of employer stock or units of an employer stock fund?
  • Have you ever sold shares of employer stock within the qualified plan?
  • What percentage of your plan value is employer stock?

Although these plan assets are under the care of a retirement plan administrator, what you learn during this process will allow you to be a better advisor for the assets the client has entrusted to you.

Do you participate in your company's Section 423 employee stock purchase plan?

This "master question" probes one of the least understood benefits many employees have. Most plan participants need help understanding their plan. If the client answers, "Yes," your follow-up questions could include:

  • How long have you been participating in the plan?
  • What do you typically do with the shares you acquire this way?
  • Does your employer offer an employer discount and if so, how much?
  • Does your employer offer a lookback?
  • What is the term of the plan?

As with qualified plan assets, these stock plan assets are likely under someone else's care. By gathering information about them, you will be in a better position to provide full balance sheet advice.

Bottom line: "Master questions" are key to unlocking the door to new avenues of discovery with existing and prospective clients.