The reality is that you cannot always get down on file every last snippet of conversation between you and your client; unless you record meetings, of course — a great way to capture it all.
Another sad reality is that not every adviser is great at teasing the detail out of clients.
But either way, it does not matter whether the information is stuck in the adviser’s head or it is still in the client’s head, it is not where it needs to be, which is on the client file.
So let us look at the fundamental areas of where we need good detail, why we need the detail, and why it is important to the advice.
Needs and objectives
What a client needs and what a client wants to achieve is paramount to a good client file. Without the detail of a client’s financial needs and their financial objectives, the entire advice falls apart.
You will see in the next sections that everything comes back to these two crucial things — what does your client need financially and what do they want to achieve. And remember, there is no such thing as too much detail.
When assessing need we need to make sure we sense check it. This will tie into the detail you gather around a client’s income and expenditure.
But before we carry on, let us be clear on what we mean by need: it is any income or capital that a client requires to maintain their lifestyle now and throughout the rest of their lives.
This definition extends to protection needs, because to maintain their income or capital needs they may be reliant on earned income, or a spouse or partner. So this assessment of need is really important.
When we are thinking about retirement advice, we are thinking about how much money the client will need throughout retirement to maintain their lifestyle, as well as how much they will need for all the other things they want to do.
At-retirement advice requires an individual to think about (and document) not only what their current needs are, but what their needs are post-retirement, and how they change as the client moves through retirement.
For example, when state pension kicks in, will that impact how much they need to live on from their pensions and other assets?
Now let us not forget about the client’s objective. This is typically the softer stuff.
It could be anything from, “I want to make sure that my money works as hard as possible so I can leave as big a legacy as possible to my children and grandchildren when I die”, or “I want to be able to have holidays in retirement that I haven’t been able to enjoy during my working life, such as trips to the Maldives”. Or it could be as simple as “we want some extra capital to do some home improvements on the house”.
