As an accountant, you can help prepare clients for possible financial emergencies by asking the right questions. In this article, Bryce Sanders suggests six key questions to ask your clients to get them started on a financial plan and to demonstrate your expertise in advisory services.
One of the lessons learned from the Great Recession of 2008 was that the big banks should always be prepared for an emergency. How would they react under similar dire circumstances in the future? This is a good strategy for your clients, too, to get them thinking about financial planning so you can offer it as an advisory service.
Six Stress Test Questions
Here are six questions to ask your client to illustrate that scary scenarios are within the realm of possibility. Your client might be living paycheck to paycheck and thinking, “What could possibly go wrong?” Different questions will be relevant for different clients.
1. What if…you lost your job tomorrow? Even if this seems unlikely, there are several reasons it could happen. Suppose your client’s company merged or was subject to a takeover, and the new owner brought in their own management team. If the economy were to slow, reducing headcount is often a first step companies take to maintain earnings. Whether it’s called early retirement or reorganization, the result is the same.
Questions for your client: How long would it take to find a new job? What severance benefits might you expect? How would you pay bills in the meantime?
Be proactive: Your client needs an emergency fund of at least six months of living expenses. They also need to keep their eye on the job market in their industry.
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Bryce Sanders is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania. He provides high-net-worth client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor, can be found on Amazon.com.