

Derek Hagen, CFA, CFP®, FBS®, CFT™
“A well-placed ‘yes or no’ question can save minutes of rambling.”
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In financial life planning, asking the right questions is essential to unlocking your clients’ values, goals, and concerns. While many advisors favor open-ended questions for their ability to encourage expansive discussion, closed-ended questions also have a strategic role. They provide clarity, focus, and direction during client conversations. In this article, we explore the benefits of closed-ended questions and demonstrate how to use them effectively alongside open-ended questions.
At a recent training on facilitation techniques—covering Motivational Interviewing and reflective listening—I demonstrated various ways to engage clients. I asked participants to comment on my process. One observant attendee pointed out that earlier in the session I had labeled yes/no questions as “closed-ended” questions, yet I later used one. We all had a laugh about it. That moment became a great segue to discuss that closed-ended questions aren’t inherently bad, nor are open-ended questions automatically superior.
The reality is that both types of questions have their place. While open-ended questions encourage clients to share more about their experiences and aspirations, closed-ended questions can quickly zero in on specifics. Think of it like a spectrum: at one end are questions like “Who, which, when, where, yes/no” (closed), and at the other end are “What” and “How” questions (open). Both are necessary in effective client conversations.

Why Open-Ended Questions Are Encouraged
Open-ended questions are designed to let your clients elaborate. When you ask, “What does your ideal retirement look like?” you invite them to paint a detailed picture of their dreams and concerns. These questions help clients articulate thoughts they might not have even realized they had, thereby deepening the conversation and uncovering valuable insights.

In contrast, a closed question like “When do you want to retire?” typically yields a brief answer—often just a year or an age—which, while clear, may not reveal the full context of the client’s desires.

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The Strategic Role of Closed-Ended Questions
Closed-ended questions have a distinct advantage: they keep the conversation focused and allow you to verify key details quickly. For instance, if curiosity prompts you to ask a simple yes/no question, it’s often more effective to let that spontaneity guide the dialogue rather than pausing excessively to craft the “perfect” open-ended question.

Sometimes, a closed question serves as a conversational fork. A yes/no answer can determine which path the discussion will take. For example, after discussing a client’s concerns, you might ask, “Do you feel this challenge is primarily financial?” Their answer helps you decide whether to dive deeper into budgeting strategies or explore emotional factors affecting their decisions.

Moreover, closed-ended questions can serve as an invitation. They provide an “out” for clients who may feel overwhelmed by the need to elaborate, while still leaving the door open for more detailed discussion if they wish.
While open-ended questions are invaluable for encouraging clients to share their full stories, closed-ended questions are equally critical in a financial planning dialogue. They help pinpoint specifics, verify key information, and guide the conversation in a clear direction. By strategically blending both types of questions, you can ensure that your client interactions are both rich and focused—leading to deeper trust and more effective financial life planning.
Embrace both tools in your conversational toolkit. Whether you’re confirming details or opening the door to broader exploration, using the right question at the right time will elevate your practice and strengthen your client relationships.
Want to Learn More?
Money Quotient trains financial professionals in the True Wealth process and helps them implement the concepts into their practices. The first step is to learn about the Fundamentals of True Wealth Planning.
References and Influences
Klontz, Brad, Rick Kahler & Ted Klontz: Facilitating Financial Health
Miller, William: Listening Well
Miller, William & Stephen Rollnick: Motivational Interviewing
Rosenberg, Marshall: Nonviolent Communication
Sofer, Oren Jay: Say What You Mean
Solin, Dan: Ask