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Where Are All My Friends? Why Aren’t They Clients?

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Why Aren’t They Clients?

Would you rather do business with someone you know or someone you don’t know?  We think the answer is obvious.  Go for the known quantity.  Most of your friends are in the market.  Why aren’t they doing business, or at least asking for advice?

Are your friends invested in the market?  According to Gallup, about 52% of Americans own stocks. (1)  According to 2016 data from the Federal reserve’s Survey of Consumer Finances (as Reported by Stamford University) about half of all working Americans are eligible to participate in a work based retirement plan, like a 401(k) and the participation percentage is in the 90+% range. (2)

Ten Reasons Your Friends Aren’t Your Clients

It’s logical your friends should be your clients.  You might have approached them, but you logically feel they should be knocking on your door.  What’s holding them back?

1. They are not really your friends.  OK, that’s a pretty good reason.  Why do you bother with them?  Aren’t they the ones who turn down invitations to get together, don’t answer texts and make fun of you behind your back?

What to do:  Write them off from the potential client perspective..  Even if they became clients, it would be an accident waiting to happen.

The next nine reasons have more potential for a positive outcome.

2. Do they even KNOW what you do?  We are all busy people.  We stereotype.  When we hear someone’s a lawyer, we think criminal lawyer (on TV dramas) or ambulance chaser (commercials during TV dramas) To them, financial advisors are stockbrokers.  You do more than that.

What can you do?  When you see them one quiet afternoon, express an interest in what they do.  They will likely return the favor.

3. Have they been asked?  You can’t get into their heads.  If you could, you might discover they think you erect a wall between business and friendship.  Their rationale is:  “If he wanted me as a client, he would have approached me.”

What can you do?  Ask.  Everyone should have the opportunity to say no.

4. Risk to friendship.  They worry because “You can’t fire friends.”  Money is important to them.  If you messed up, they lost a friend in addition to hard earned cash.  Another way of saying it is: If the relationship isn’t working out, they want a way to unwind the business relationship while preserving the friendship.

What can you do?  Give them a way out. “If you do business and take my advice, you should get a report card.  If I’m doing a lousy job, you should be able to fire me.”  Now they have a roadmap.  It’s guilt free for them, because it was your idea.

5. You talk too much.  They are concerned about confidentiality.  They think if they let you into their financial lives, you will share what you learned with their peer group.  “She acts high and mighty, but she doesn’t have two nickels to rub together.  Trust me, I know.”

What can you do?  Explain you operate under a code of confidentiality like doctors and lawyers.  They’ll understand immediately.  You have just aligned your role as a financial advisor with two highly respected professions.

6. You are new at this.  They are terrified you will be practicing with their money.  “I thought you knew how margin works!” Even worse, “Short selling is more confusing than I thought!”  They secretly think: “If she’s still in the business two years from now, then I’ll open an account.”

What can you do?  You aren’t the Lone Ranger.  If you are part of a team, sell the team’s combined experience.  If you are a sole practitioner, sell the firm’s size and reputation.

7. What’s your minimum?  You use “High Net Worth” in sentences.  Your friends don’t know what that means exactly, but they hear “More money than you’ve got.”  They think of the dating analogy when a friend says to another: “I don’t have anyone to go out with.”  You reply “Go out with me.”  They counter “Thanks, but I’m not that desperate.”  Financially, they worry their account would be too small.

What can you do?  Instead of an over/under explanation like: “My minimum is…” provide a range, smallest to largest accounts you have, followed by the average account size.  That’s an inclusive strategy. 

8. You’ve got all the clients you can handle.  You keep talking about how busy you are.  You complain about how much time some unnamed clients consume.  Your friends don’t know you need to find your own clients.  They assume the firm assigns them to you.

What can you do?  Let friends know you are adding clients by telling them as you add them.  “I took on a new client today.  He’s a school teacher.  He was pointed in my direction by another client.”

9. They’ve got an advisor already.  According to a CNBC article, only 17% of people they surveyed said they work with a financial advisor. (3)  Guess what?  Your friend is in that 17%.  They’ve got an advisor.  They aren’t doing a bad job.  They think they only need one advisor.

What can you do?  Let them know the wealthy work with multiple advisors, three on average. That comes from the book The Millionaire’s Advisor by Russ Alan Prince and James Van Bortel.

10. I’ve got no money to invest right now.  They think talking with you about business requires they take immediate action.  Because they don’t have cash to commit right now, they see no reason to even have this conversation.

Related: Why Advisors Should Use Multiple Marketing Channels

What can you do?  Start the conversation, indicating you should talk seriously when money comes their way and they need to make a decision.  Do they get an annual bonus as part of their compensation?  That might be a good time to talk.

These were ten major reasons friends probably haven’t approached you for business.  Only the first is a deal breaker.  You can handle the rest.

https://www.financialsamurai.com/what-percent-of-americans-own-stocks/
http://longevity.stanford.edu/sightlines-financial-security-special-report-mobile/
https://www.cnbc.com/2019/04/01/americans-are-more-confident-about-their-retirement-savings-now-versus-three-years-ago-pre-trump-according-to-the-invest-in-you-savings-survey.html
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