When you’re onboarding a new client, you need a clearly defined, repeatable process for evaluating the person’s financial situation and needs. Years ago, I developed a consultative framework to guide my own practice called The Four A’s of Due Diligence:
- Assessment: Ask big questions to identify the client’s financial goals, such as What are you dreams for a fulfilling life? and What does retirement (if any) look like to you?
- Audit: Dig into the details on current products/solutions by reviewing financial documents provided by the client, including the client’s investment portfolio and bank statements, life insurance policies, mortgage statement, family budget, and tax returns.
- Action: Close any gaps between what your clients currently have and need to have in their plan to achieve their desired financial goals. Although the audit phase reveals gaps, the action phase plugs those gaps.
- Alignment: Monitor changes in the client’s life and goals to maintain alignment with products and the household’s situation. Depending on the client, you may conduct regular reviews quarterly, semi-annually, or annually.
