You will run a fact-find with a practice partner and turn it into a ranked needs analysis.
You have practised each part of the fact-find separately: the opening explanation, objectives, finances and existing cover, and risk. In a real meeting they arrive all at once, out of order, mixed with small talk and a client checking the time. This exercise puts them together. You run a full fact-find with a practice partner, then turn it into a needs analysis they agree with.
You need a partner willing to play themselves or a realistic character, about an hour, and a way to record the conversation with their permission. A phone on the table is enough.
Use your firm's fact-find form if you have one. If you do not yet, use the course template, or build a simple version with the headings from lessons 3.2 to 3.4: objectives, cash flow, assets and debts, existing cover, CPF, risk attitude and capacity, and information the client declined to give.
Start the recording and open with the explanation you wrote in lesson 3.1, Why the fact-find is the most important meeting. Say why you ask, that your partner can skip any question, and what skipping means. Do this before the first question, even though your partner knows it is practice. You are building the habit.
Work through the fact-find as a conversation. Start with what the money is for. Follow your partner's answers rather than the order of the form, and come back to gaps at the end. Use open questions and follow-ups, and resist the urge to mention any product. If your partner raises one, note it and say you will come back to it once you understand their situation.
Before you finish, read back the main points and ask whether you have them right. Check every section of the form for blanks, and either ask the question or record that it was declined.
After the meeting, list every need that came out of the fact-find. Then rank them. The test for the ranking is what happens if each need is not met: who is affected, how badly and how soon. A need whose failure would leave dependants without income ranks above one whose failure would mean a smaller holiday fund, even if the second is easier to sell or the client talked about it more.
Then, for each ranked need, write three figures: what the client has now towards it, what they need, and the difference. Use the amounts the client chose in the fact-find, and mark which existing resources are reliable and which are not.
Ravi, 31, agreed to be Wei Ling's practice client using his real situation with the figures rounded. All figures here are examples.
His take-home pay is S$5,600 a month and his spending is S$3,200, including S$1,000 a month he gives his parents, who have no other regular income. That leaves a surplus of S$2,400 a month.
Need 1: his parents' allowance if he dies or cannot work. Ravi chose to plan for S$1,000 a month for 15 years. That is S$180,000, before allowing for inflation or any return, which Wei Ling notes as a simplification. He has S$100,000 of group term life through his employer and a S$20,000 death benefit on the policy his mother bought, so S$120,000 in all. The gap is S$60,000. But the group cover depends on his job. If he leaves, the gap becomes S$160,000, and Wei Ling records both figures.
Need 2: an emergency fund. Ravi wants six months of spending set aside, which is S$19,200. He has S$12,000 in savings, so the gap is S$7,200.
Need 3: hospital cover that does not depend on his employer. He has MediShield Life and a group hospitalisation plan through work. The gap is cover that would continue if he changed jobs, and he wants to look into the costs before choosing a level, so no amount is set yet.
Ranking: Need 1 comes first, because if it is not met two people lose their only regular income. Need 3 comes second, because a large hospital bill between jobs could wipe out his savings and the allowance with them. Need 2 is third. It matters, but the shortfall is small and his monthly surplus can close it on its own over time.
Notice what the ranking is not based on. Ravi spent most of the meeting talking about investing for his own retirement. It is a real objective and it goes on the list, but with thirty years to go and no one depending on it, the cost of leaving it for a few months is lower than the cost of leaving his parents exposed.
Give the one-page needs analysis to your partner and ask them to read it. Does it match what they said? Is anything missing or ranked in a way that does not fit how they see it? Change what is wrong, and if they disagree with a ranking, record their view beside yours. Then ask them to sign or initial the page to confirm it reflects the conversation.
Listen back to part of the recording too. Most people find at least one moment where they talked over an answer or rushed past something important.
When you are done, you have a recording of the full fact-find, a completed form with no unexplained blanks, and a one-page needs analysis. On that page, each need is ranked by what happens if it is not met, has its gap shown as have, need and difference, and your partner's signature confirms the content. In the activity below you run and write up your own.
Run a recorded practice fact-find, then write a one-page needs analysis with each need ranked and its gap stated.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).