As discussed in Module Two, the second interview should begin with a confirmation of the information derived from the client during the initial consultation. The client should be asked if since the original consultation any other issues have arisen or if there are any other factors that were not disclosed at the original consultation that may have a bearing on your recommendation.

It may be at this stage that you decide that property is not an appropriate investment for the client.  If this is the case, you should explain carefully to the client the reasons why this is so and potentially refer them to another professional who may be able to assist with their investment needs. However, you should establish an ongoing contact arrangement for the future when property investment may become a possibility.

If both you and the client have determined that property investing is a suitable strategy, you are now able to explain the strategy which you have in mind for the client. At this stage, you may only be discussing property types, locations, possibilities, rather than specific property recommendations. From the initial consultation the client will have some understanding of property and the principles of property investment. At this second consultation you now relate this to their circumstances and give an overview as to how you believe  property will fit into their overall strategy. Remember at this stage you are not recommending a specific property to the client as you have not yet formulated a written Property Investment Report. In this consultation, ongoing property education and situation review should be emphasised.

The goal of this second consultation should be to ensure that the client understands the rationale behind the recommendation you are making. As we have previously stated, an important part of this consultation is to also ensure that the client understands the appropriate financial and property terminology. If at this stage they seem to be unsure, you must refer them to additional reading or education, as their complete understanding is a must before you proceed.

To recap from module two, here once again are some of the elements which your client must now understand before proceeding any further:

You should expect a range of possible outcomes from this second interview.  Not all of your clients will be immediately ready to embrace your recommendations and many of them may still be fearful of proceeding.  Some possible outcomes of this second interview may include:

  • The client is completely comfortable and can demonstrate that they understand how property investment works. They give their consent for a detailed report to be prepared for them.
  • The client is comfortable with the recommendations so far but is not ready to have a detailed report prepared. You should arrange to contact the client at a future date
  • The client is unsure of whether to proceed. Further education and a return to the first consultation is recommended.
  • The client rejects the proposals. Ask if they would like further contact. If so make contact in 2 – 3 months.  If not, do not contact again.

 

As you can see from the outcomes listed above, it is possible that a client will not be enthusiastic and may not wish to proceed toward having a  Property Investment Report or Statement of Advice if you are a properly accredited advisor under the FSR regime.  It’s important that you are not seen to be harassing the client and they must be asked whether they would like further contact, or not.

Of course, an acknowledgement by the client that they are prepared to proceed is desirable. To further assist proceeding with the recommended strategy,  if the client is willing, you can arrange an appointment for the client with an accredited finance professional.