ACTIONABLE ADVICE FOR FINANCIAL ADVISORS: Newsletters and Commentaries Focused on Investment Strategy

What to Say When a Friend Doesn't Want to be a Client

March 5th, 2013

by Dan Richards

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Dan Richards

Many great client relationships emerge from friendships.

That said, some investors are uncomfortable working with advisors with whom they have close friendships – something I was reminded of last week by an email from a veteran advisor in New York City with a question that confronts many advisors: How to respond when a good friend eliminates the possibility of working together, precisely because of your friendship.

Here’s the email:

“I wonder if you have any suggestions on how to respond when a close friend confides to you that they are looking for a financial advisor but prefer to keep business and friendships separate.

For years now I’ve periodically been in this situation but have not had a comfortable response.”

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Mixing business and friendships

It’s not only clients who have concerns about mixing business and personal friendships – I’ve talked to advisors who make a conscious decision not to market within their personal network. In some cases this is because of concerns that marketing to friends will be seen as intrusive and position you as a salesperson; in other instances it’s because advisors don’t want to jeopardize friendships should people feel let down during choppy markets.

When friends say they’re uncomfortable mixing business and friendship, you have three alternatives:

  1. Try to change your friend’s mind
  2. Suggest that they consider working with another advisor on your team (depending on the size of your team)
  3. Offer to introduce them to advisors at other firms.

Your response here is very much one of personal preference – and in some cases may depend on your relationship with the person with whom you’re talking.

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