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By David GordonDirector, Eaton Vance Advisor Institute

Questions are a financial advisor's best friends. We believe this so strongly that many (perhaps most) of our Coach's Corner posts include a question or two. The obvious attraction is that open-ended questions get your clients talking and when your clients talk, you learn what matters most to them.

There's another benefit of questions, however, that is just as important: Questions make you look smart. You can look just as smart by asking great questions as you can by providing the answers to those questions. The difference is that some answers may carry legal liability (think taxes, trusts, estate and legal issues), while most questions do not.

You may actually know the answer; that's not the point. The point is that when a client goes to another professional to get the answer to a question you asked, you get "credit" for having asked the right question. In addition, the client will still come back to you to implement the investment plan that best fits the answers to the question.

Consider asking questions like these in conversations with existing and prospective clients:

  • "Are you considering revising your estate plan to account for the arrival of your first grandchild?"
  • "Could you structure your charitable giving in a way that makes better use of current tax laws?"
  • "What are the potential tax implications if you decide to sell your business upon retirement?"
  • "Have you considered which shares of employer stock are 'long-term shares' and which shares could fund other investment priorities sooner?"

When you really think about it, you are best positioned to ask the questions to help clients see their full balance sheet. A client's answers to these questions — after they consult their tax, estate or legal professionals — can help you construct a more comprehensive plan for the client.

Bottom line: Great questions have a discovery power all their own, while protecting you from the professional risk of providing answers outside your areas of expertise.

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