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Friends as Clients: What Could Possibly Go Wrong?


It’s finally happened! You’ve gained enough experience and traction that friends have become clients. Maybe they didn’t say: “Once I think you are good at it, I’ll give you some money,” but you passed the test. When a stranger becomes a client, you have an arm’s length relationship. Friends often think the rules of polite behavior don’t apply to them. What now?

Six Issues When Friends Become Clients

Many friends make great clients. Some create problems without even knowing it. Assuming relationships are like a set of scales, the balance may lean in one direction for quite a while before righting itself. You need to go with the flow.

  • Balance in the relationship – Client relationships are sometimes similar to dating relationships. You’ve heard someone’s partner referred to as “high maintenance.” This might the first time they’ve had a high touch service relationship. They may be calling all the time about statement questions. They forget an answer you’ve told them. They insist on talking with you. Your assistant just won’t do.

Strategy: This too shall pass. Deal with it until they get comfortable with the relationship. If they insist on speaking with you about an administrative issue, let them know that’s fine, but if they tell your assistant about it, the problem will be addressed a lot faster. They will suddenly prefer speed.

  • Confidentiality – They became a client because other mutual friends are also your clients. Because you are such close friends, they think it’s OK to tell tales “out of school.” One Friday evening after several tequila shots that ask questions like: “I know Sally is your client. She thinks she is better than everyone else. How much money has she really got? Don’t worry, it’s just between us.”

Strategy: Obviously you are bound by client confidentiality. They may think that’s a cop out. Try explaining the same rules apply to everyone. “Suppose someone asked me how much you owe on your credit cards? How would you feel if I told them?” They will have a newfound appreciation for client confidentiality.

  • 24/7 access – You keep office hours. So do your friends. They open their account statements after work. This goes for online statements too. They are alarmed by a perceived drop in value, unaware a new account hasn’t been householded yet or a recent purchase hasn’t registered a value. They immediately call you during dinner.

Strategy: Here’s the unspoken part: They don’t want to be ambushed with a business conversation in their leisure time either. Let them know that unless it’s an emergency, you will only call them about business during business hours. You are respectful of their free time. Now explain they aren’t held to the same rule! If they have something really serious on their mind, they can call you anytime. By elevating their concern to “serious” and explaining you respect the value of their free time, they will most likely say: “No, I will only call during business hours. I respect your free time too.”

  • Preferential pricing – You borrow each other’s string trimmer and snow blower. You don’t charge each other rental fees. But when it comes to business, they often want advice for free. They might even do a few trades away, while still expecting you to tell them when to get in and out. They want to beat you down on pricing. They don’t understand advice has a value.

Related: How to Motivate Yourself to Prospect — When You Really Don’t Want to

Strategy: Be up front about how you make money. Let them know the costs involved in buying or selling the product. Explain you do have preferential pricing, for family and friends. Be transparent. Explain advice has a value. You still need to earn a living. If they are a lawyer of doctor, you might ask how they feel about being asked for free advice.

  • The pop quiz – The stock market hit an air pocket. The people on the financial news app on their Smartphone are tearing their hair out. They even found an analyst who predicts we are all going back to stones and clubs. They want to know what their holdings are worth at this exact moment. Unfortunately, you are both standing on the 9th hole at the golf course.

Strategy: You have three options you can offer: First, you hopefully have quarterly reviews on the calendar for this client. You can remind them we are doing a comprehensive review in two weeks. They may be willing to wait, rationalizing you are on top of things. Second, you can mention the review, but you can both sit down in your office on Monday, when you will have all their records close at hand. Third, tell them they can pull out their laptop back at the clubhouse, sign onto the client portal and you can look at the account together. Giving them options should reduce their level of anxiety.

  • Let’s bend the rules – Rules don’t apply between friends, do they? Of course they do. They cannot place an order in their spouse’s account without a Power of Attorney in force. They cannot sign their spouse’s name to something. Suppose they neglected to mention they discussed divorce the night before? You broke the rules.

Strategy: When problems develop, there often aren’t any grey areas. You either followed the rules or you didn’t. You might let them know today’s technology allows the company to compare signatures. You can get fired. Signing someone else’s name is a felony. They could go to jail. They may think you are applying the rules too strictly, but they will respect you for it.

Clients become your friends. Your friends become your clients. There can be some bumps in the road on the latter, but you can get over them.

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