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Expanding your client base close to home

Bryce Sanders

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Understanding why friends do (or don’t) want to do business with you.

Your friends know what you do. Some are clients; many are not. What holds them back from saying: “Will you help me?”

Let’s start with the positives. Assuming you provide a service they need, there are plenty of reasons why they want you:

  • Trust. It’s earned incrementally. You’ve already done that. It might be years of friendship or your demonstrated ability to keep secrets.
  • Tapestry of their lives. Everyone feels their situation is unique. They worry that walking into an office or engaging in an 800-number phone conversation will get a one-size-fits-all solution. Your friend knows you understand what they want to accomplish in life and leave behind as a legacy.
  • Personal attention. They know you have really big clients and those people get plenty of attention. They feel their close friendship catapults them into this higher category of service. Why? Because people take care of their friends.
  • Known quantity. Ever stand in a checkout line and realize you got the trainee? If your friend walks into an office seeking advice, they will get assigned to someone. Are they an experienced producer or a newbie? When your friend chooses to work with you, they know the level of experience they are getting.
  • Objective advice. Friends tell it like it is. They have relationships that exist in many overlapping circles. You might be in-laws, fellow volunteers or neighbors. Friends expect a level of frankness.
  • They like you. People do business with people they like.

Why friends don’t do business
You might know a lot of people, but many don’t do business with you. What’s keeping them away? Can you do something about it?

Confidentiality. They think you name-drop to win business. They don’t know you are bound by confidentiality.
Your message. One advisor would get a friend to stop by the office before heading out for drinks. He would mention to the friend that they won’t see a client name on a binder or report anywhere in sight and then add, “If you ever do business with me and another friend visits, they won’t see your name on reports either.”

They don’t understand what you do. It’s human nature to pigeonhole people. They know you sell insurance. They don’t need life insurance, end of story. They have no clue you offer investment advice or retirement plans.
Your message. Realize you are guilty of making the same assumptions. Ask what they do, mentioning you have a vague idea. Take a sincere interest in their explanation. This lays the groundwork for you to follow by briefly telling your story.

Risk to the friendship. People worry if the business relationship turns sour, the friendship is lost too.
Your message. Early on, provide a way to unwind the relationship. “If we work together, you will get a report card. If I’m doing a lousy job, you will be able to fire me.”

Have you asked? Since they know what you do, it’s likely they have already made the mental decision if they would do business. However, they aren’t going to volunteer.
Your message. Everyone should have the opportunity to say no. If you ask and they decline, that’s fine. Don’t make the decision for them.

What size accounts do you handle? High-net-worth sounds like “More money than you’ve got.”
Your message. “We find we can be of the most value to people with a combined net worth of $2 million or more.” This gets them adding up retirement accounts, home equity, fully paid-up life insurance policies, annuities, securities accounts and more. They suddenly feel wealthy. You have subtly introduced nontraditional product lines.

The one reason you should walk away
You can work through the reasons above. Maybe not this one.

They don’t like you. You married into the family. Perhaps the friend is really a “frenemy.” There’s an adversarial component present. In this case, don’t bother even trying. The risks are far greater than the rewards. If you insist on trying (they won the lottery), stick to very plain products with few moving parts that perform as advertised.

It’s likely many clients have become good friends. The process should also flow in the opposite direction.

Bryce Sanders is president of Perceptive Business Solutions Inc. and author of “Captivating the Wealthy Investor.”

Bryce Sanders

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