Advisors wear many hats. If you are socially active in the community, you connect people. You raise money for charity. You volunteer your time. You look for clients. It’s all connected.
As an advisor you have a skill shared by very few people. You can look someone in the eyes and ask them for money. This often brings you into two worlds: fundraising and prospecting. Many advisors are great at prospecting strangers. If they say “get lost,” it’s fine. You probably won’t see them again. It’s when you are approaching friends for donations or business that some advisors get nervous.
Let’s assume you serve on the board (or aspire to) at your favorite charity. They have announced a capital campaign to raise $ 50 million. You need to raise some of it. Friends seem the logical audience. Let’s look at how you would approach them for a donation and the parallel track for asking them to become a client.
1. Learn about the mission. You need to understand how the money will be used. How will it make people’s lives better? What are the benefits to the donor?
Prospecting: Before you approach a friend to do business, you learn the investment process and product details inside and out. Why is this investment supposed to go up? What needs to happen? You need answers at your fingertips.
2. Contribute first. You must set the example. You write a check or make a multi-year pledge to the Capital Campaign. This enables you to say: “I hope you will join me in supporting...” It avoids: “How much are you giving?” Followed by: “Nothing. But I think you should support this cause.”
Prospecting: This is obvious. You need to be your own client. You “eat your own cooking” as they say.
3. Find a quiet time. There are times you and your friend are relaxed. Maybe the two of you are having drinks. Ask to sit down and talk a while. Don’t ask on the train platform as your train is approaching.
Prospecting: It’s similar logic. Bring up business when there aren’t distractions.
4. Change hats. This has been around forever: “For the next five minutes I am taking off my friend hat and putting on my museum board member hat.” Pantomiming changing hats is fine. When you are done, put your friend hat back on. It separates the roles.
Prospecting: Take off your friend hat. Put on your financial advisor hat. Stick to the announced time limit. They should tell you to “keep your advisor hat on” if they have more questions.
5. Be serious. You might be buddies, but money is serious. Treat them the same way you would if you were approaching the richest person in town, asking them to support the worthiest cause in the world.
Prospecting: As above, money is serious. If they might entrust you with money, they want to see your professional side. Approach them with the seriousness you would show an institutional investor.
6. Explain giving levels. Campaigns to raise money are usually on tiers. Your name might go on a plaque. You might get a room named after you. There are benefits to the donor. pell them out. Explain how the money can be paid in over time, often up to three years.
Prospecting: A money manager might need a minimum of a $100,000 investment. You need a few for style and size diversification. Mention a number. For people investing less money, mutual funds or ETFs might be the better route. Why is one better than another?
7. Ask for a specific amount. Don’t close with: “How much would you like to give?” or “What do you think?” Ask for a specific commitment, which can be paid off over time. Aim high. They should feel it’s flattering you think they can part with that amount. You are bearing in mind they will likely trade you down.
Prospecting: You intend for this to be a long-term relationship. You plan to deliver great service. You believe in the idea. Think big. Asking for a small investment might imply you aren’t confident it will work out.
8. Establish next steps. They might say: “Let me think about it.” Be respectful. Try to establish a timetable. “We are doing the press photo of major donors in four weeks. Can we talk again in two?”
Prospecting: If they want to think about it, how are you going to follow up? What makes it timely?
9. Thank them multiple times. One of the axioms in fundraising is you can never thank donors enough. Thank them verbally. Send a handwritten note when you get home. Let the board chairman and executive director know. They will likely send notes too. The institution will send a formal acknowledgement.
Prospecting: Congratulate them on making a good decision. Let them know what happens next. Get the onboarding and welcome process started.
10. Follow-up. Stay involved between the time you ask and the ribbon cutting on the completed project. Get them to the press photo shoot. Involve their spouse where possible. Confirm they are getting thanked each time another portion of their contribution is made. Get them into the “I’m liking this” frame of mind. Make them feel important.
Prospecting: Call when their money has been put to work. Call to review the first statement, either the paper or online version. Deliver on those quarterly and annual reviews you talked about. Let them know they are an important client.
You can see the similarities between charity fundraising and asking a friend to become a client. Because of your skillset, you should be good at both.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor can be found on Amazon.