Many advisors have some great friends who started out as clients and made the transition. Logically it should work the other way around. Some friends should have the potential to become great clients. Bringing up business can be awkward. Here are three approaches to consider.
1. Changing hats. This approach works for charitable fundraising as well as business. We all wear many hats. You have your parent hat, your son/daughter hat and your student hat. This corresponds to different roles at different moments of today’s life. Your role is different when talking with your children, calling your mother and talking with your professor when taking graduate courses. Now let’s talk business!
Strategy: Sit down with a friend. Remind them they know you work at (firm). They’ve known this for years. You help people with financial issues. “For the next five minutes I would like to take off my friend hat and put on my financial advisor hat.” You have your business conversation, then look at your watch and say: “Five minutes is up. I am taking off my financial advisor hat and putting my friend hat back on.”
Why it works: People can relate to this exercise defining your different roles. They can ask you to keep the financial advisor hat on if they have more questions. A week from now, they can start the conversation with “Can you put your financial advisor hat back on?”
2. Lead with the risk to friendship. Why do friends avoid the business conversation? Lots of reasons. They might not think they have enough money is one, but towards the top of the list is the risk to friendship. They place a high value on your shared friendship. They worry if the business relationship didn’t work out, separation would get messy, and they would lose a good friend in addition to losing good money.
Strategy: Start the conversation with “You know where I work and what I do. I have never brought up business before because you are my friend. That is very important to me. I would never want to put our friendship at risk” (They will likely agree.) “ Besides, I have always assumed you work with someone else already. They take great care of you and provide great service. Most successful people have that kind of relationship with their advisor.” (They might agree or they might say “I never met my advisor. What can you do for me?”) Now for the final part: “I thought we might spend a few minutes talking about what I do, how I help people. Then later, if you come across anyone in those situations, you will know how I may be able to help them.”
Why it works: You have assumed they are another advisor’s valued client. You described them as successful. Both are compliments. Your ending is in the third person, “How you can help someone else,” which gets your message across without making them feel awkward.
3. When do you review? You know a friend does business with a competitor. They have told you. They have given you enough clues to know they use managed money at that firm. Your friend is a middle manager, licensed professional or a business owner. In all three cases, they are familiar with evaluating service providers periodically and determining if they will stick with them for another year or bring their overnight mail or telephone service to a competitor.
Strategy: “I know you use managed money at (firm). You have explained it to me. When do you review the relationship with your money managers at (firm)? I am interested in winning some of your business.” If they don’t pick up on your wording, you might ask another way: “When do you have your next periodic review with your advisor? Can I meet with you a week or two beforehand?”
Why it works: You are likening the periodic review with their familiar process of reviewing vendor relationships. You made your case and asked for a certain amount of money. It’s not so much they need to leave the other advisor, but enough so you can show what you can do for them. When they meet with their advisor for a portfolio review, rebalancing is often part of the conversation. Some bonds have matured, or CDs came due. Money is in motion. It’s easy to agree to the sell recommendations, but not the buy recommendations. They have now raised an amount of cash to send to you. It might not be huge, but the initial relationship is established. You tapped into a business process very familiar to them.
These conversations are comfortable for different friends for different reasons. Think of a few friends with the potential to become good clients. Which is appropriate for each one?
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 is available on Amazon.