The phrase  “fact find and needs analysis” is part of the process which an adviser must offer when providing financial advisory service. This is a regulatory requirement and unless the client decline, it is the duty of all financial adviser to inform the client that this service is available. In the past when regulations were not so strict, many financial advisers sold based on product features rather than based on a client’s needs. As a result, many clients were not satisfied with the product. There was many misunderstanding and mis-selling. These days, fact finding and needs analysis are offered to clients.

Fact find is a process to gather hard and soft data. Hard data will be like asset, liabilities, income and expenses. Current investment portfolio and existing insurance policies are also hard data. Hard data includes risk profiling. Soft data will be like client’s personal preferences, their relationship with spouse (and children) and aspiration. Soft data also include the person’s historical investment experience and any biasness (known or unknown) with regard to how the client makes any decision. In fact, soft fact is the most complex part of the fact finding process because it could include the client’s perceive financial knowledge verses real financial knowledge. For example, many so-call savvy investors are handicapped with the problem of mental accounting and as a result makes irrational decision when come to forex losses and capital losses.

Upon gathering enough facts (hard or soft), it is the duty of the financial adviser to do the necessary needs-analysis to uncover any shortfall. Sometime there is no apparent “shortfall” but the client may have certain desires or wants which he cannot articulate in words and figures. It is thus the duty of the financial adviser to help articulate want this “desire or want” really is in words and figures.

Why fact find and needs-analysis arise is because no two human beings are identical. I have never met any two clients who are identical in asset, liabilities, cashflow, desires, wants, problems or biasness. Everyone is created differently and everyone is unique. What works for one will not work for another.