Client discovery, needs analysis and information gathering
What the exam tests
This domain tests structured discovery: what to ask, why, how to verify it, and how to record it so later suitability and risk work rests on evidence.
Core rules
- Know your client: identity, age, dependants, health, employment, income stability, assets, liabilities, cash flow, existing products, goals, time horizon, liquidity needs, tax position, attitudes and constraints.
- Ask about competing goals (debt reduction versus KiwiSaver contributions versus a first-home deposit) and prioritise with the client.
- Verify key facts: policy schedules, loan statements, KiwiSaver balances and payslips, with consent. Do not rely on memory or a single conversation.
- Privacy Act 2020: collect only what is necessary, tell the client why, store securely, and allow access and correction.
- Where the FAP is an AML/CFT reporting entity, complete customer due diligence and enhanced checks for higher-risk clients.
- Record source documents, the client's own words on goals, and any information refused.
Worked example
A couple wants to buy a first home in three years. Discovery shows $120,000 in KiwiSaver, $15,000 credit-card debt at 20%, and no emergency fund. They also want income protection. The adviser records the home deadline as primary, models KiwiSaver contributions and first-home withdrawal rules, then explains that clearing the card and building a buffer may beat increasing investment risk. Income protection is discussed but deferred because the premium would break the savings plan. The file notes the trade-off and the clients' agreement.
Traps
Accepting "moderate" without probing; missing liabilities or dependants; not asking about existing cover; recording conclusions but not evidence; ignoring the client's deadline; collecting unnecessary personal data; giving advice before discovery is complete.