You will be able to run a fact-find with a practice partner and turn it into a ranked needs analysis.
Ask a friend or colleague for about an hour of their time, and check that they're happy for you to record the conversation. Your phone on the table is enough to record it. Your partner can play themselves or a realistic character.
Earlier you practised each part of a fact-find on its own: the opening explanation, objectives, finances and existing cover, and risk. Clients don't give you those parts in sequence. They all come at once and out of order, between bits of small talk, while the client keeps checking the time. This exercise joins the parts up. You hold one complete fact-find with your partner and then write a needs analysis that your partner agrees with.
If your firm has its own fact-find form, use it. If it doesn't, take the course template, or put together a simple form from the headings in lessons 3.2 to 3.4. Make sure it has space for objectives, cash flow, assets and debts, existing cover, CPF, risk attitude and capacity, and anything the client declined to tell you.
Start recording before you open. Your first words are the explanation you drafted in Lesson 3.1, "Why the fact-find is the most important meeting". It tells your partner why you're asking, that they may skip any question, and what it means if they do. Give it before your first question even though you both know this is practice, because the aim is to make the opening a habit.
Treat the meeting as a conversation, and don't work through the form line by line. Begin by asking what the money is for. After that, go where your partner's answers lead and set the form's order aside. You can pick up whatever is missing at the end. Use open questions, and ask a follow-up whenever an answer points to something more.
Leave products out of the conversation entirely. If your partner brings one up, make a note of it and tell them you'll return to it once you understand their situation.
As you wind down, sum up the main points out loud and ask your partner whether you've understood them correctly. Then go through each section of the form. For each empty space, either ask the question there and then or write down that your partner chose not to answer. By the time you stop recording, every blank on the form should be either filled in or marked as declined.
Once your partner has gone, write down every need the fact-find brought up. Then put them in order using the ranking test: if this need goes unmet, who is affected, how badly and how soon. Say one need, if it fails, leaves dependants with no income, and another, if it fails, means a smaller holiday fund. The first ranks higher, even when the second is easier to sell or took up more of the client's talking time. How long the client spent on a subject has no bearing on its rank.
Next to each ranked need, write three figures: what the client already has towards it, what they need, and the difference between the two, which is the gap. Work from the amounts the client chose during the fact-find. Label each existing resource as reliable or unreliable. Employer group cover counts as unreliable because it lasts only as long as the job.
Wei Ling practised with Ravi, 31, who let her use his real situation with the numbers rounded (example figures). His take-home pay is S$5,600 a month. He spends S$3,200 a month, and S$1,000 of that goes to his parents, who have no other regular income. That leaves a surplus of S$5,600 - S$3,200 = S$2,400 a month.
Need 1 covers his parents' allowance if Ravi dies or can no longer work. He decided to plan for S$1,000 a month over 15 years, so the target is S$180,000. Wei Ling noted beside it that the figure leaves out inflation and any return, to keep it simple. Towards it, Ravi has S$100,000 of group term life from his employer and a S$20,000 death benefit on a policy his mother bought. Together that is S$100,000 + S$20,000 = S$120,000, which leaves a gap of S$180,000 - S$120,000 = S$60,000. Because the group cover ends if he leaves his job, Wei Ling recorded a second gap as well: S$180,000 - S$20,000 = S$160,000.
Need 2 is an emergency fund. Ravi wants six months of spending set aside, which is 6 x S$3,200 = S$19,200. His savings come to S$12,000, so the gap is S$19,200 - S$12,000 = S$7,200.
Need 3 is hospital cover. He already has MediShield Life plus a group hospitalisation plan from work. He wants cover that stays with him if he changes jobs, and he'd like to look into costs before settling on a level, so this need has no amount yet.
Wei Ling put Need 1 at the top, since if it goes unmet two people lose their only regular income. Need 3 came second, because a large hospital bill while he's between jobs could use up his savings, and the allowance would go with them. Need 2 was third. It still matters, but the shortfall is small and his monthly surplus can close it by itself over time.
Ravi talked about investing for his own retirement for most of the meeting. It is a real objective, so Wei Ling put it on the list. She ranked it below the other three because he has thirty years to go, nobody depends on that money, and delaying it by a few months costs less than leaving his parents exposed.
The needs analysis is a single page. It lists each need, ranked by what happens if it is not met, and shows each gap as have, need and difference. Give it to your partner to read through. Ask whether it matches what they told you, whether anything is missing, and whether any ranking doesn't fit how they see their own situation. Fix whatever is wrong. If your partner ranks something differently from you, write their ranking next to yours and keep both on the page. Then ask them to sign or initial it to confirm it reflects the conversation.
After that, play back part of the recording. Most people find at least one point where they spoke over an answer or hurried past something important.
When you've finished, you should have three things: a recording of the whole fact-find, a completed form with no unexplained blanks, and a one-page needs analysis signed by your partner to confirm its content. On that page each need is ranked by what happens if it is not met, and each gap is shown as have, need and difference. In the activity below you run and write up your own.
Run and record a practice fact-find, then write a one-page needs analysis that ranks each need and states its gap.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).