How Does Entertaining Lead to Business for Financial Advisors?

Many advisors love to entertain.  Who doesn’t like a party?  However, it costs money.  It takes time and effort.  Advisors wonder “Where does business come from?”  Specifically, where’s the payoff?  Let’s connect the dots.

Scenario #1 – Entertaining at Home

Some people are born with the “entertainment” gene.  Hosting dinner parties at home comes naturally.  If you like the idea, but don’t know where to start, checkout the book: “Brunch is Hell.  How to Save the World by Throwing a Dinner Party.” It’s written by Rico Gagliano and Brendan Francis Newnam.  You can find it on Amazon. Let’s jump into the scenario.  You and your significant other invite a few folks you’ve met socially over to your home for dinner.  You resist the temptation to show a few PowerPoint slides over cocktails.  This isn’t a seminar.  Instead, make sure you have invited another couple, clients who really like you.  Now you have six people sitting around your living room while you are in the kitchen preparing dinner. What do those six folks talk about?  A likely question is “How do you know our hosts?”  Without any prompting, your clients explain you are their financial advisor.  Confidentiality prevents you from announcing the connection.  They are not under the same restriction.  They will probably tell your story in glowing terms, saying things that would sound boastful if you said them about yourself.  If the other guests ask questions like “Is she any good?” they will likely answer with a value proposition you wish you thought up! Now these prospects are one step closer to becoming clients.  If they are acquaintances with prospect potential, you are identifying interests in common to justify getting together again.

Scenario #2 – The Client Prospect Dinner

This one’s pretty similar, except someone else is doing the cooking.  You are out at a nice restaurant with clients and a friend you’ve requested they bring along.  Personally, I like the expression: “Someone you think I might be able to help” or “Someone you think I should meet.” The beauty of this strategy is the guests are presold before meeting you.  They likely said: “I’m having dinner with my advisor.  He said I could bring a guest. Why don’t you come along?”  Your client might have made the case: “I had this problem...He solved it.  You have the same problem...”  Even if your client didn’t establish a rationale, the guest is thinking: “He must be a good advisor.  My friend wouldn’t invite me out to meet a loser.” Your objective is to have a relaxed evening.  Everyone gets to know one another.  Establish interests in common.  Although you aren’t putting business front and center, they will likely ask.  You might describe your clientele in an inclusive fasion, so they can see where they might fit. Business is easier to bring up if you have a wholesaler along who is footing part of the bill.  They are a “Wall Street expert” who can give their firm’s view of the market and the economy. Ideally dinner ends with the guest saying: “Why don’t you give me a call tomorrow.”  You might have offered to share your analyst’s research on their firm, which gives you a reason to follow up.

Scenario #3 – The Charity Gala

You paid money to mingle.  You are well dressed, drink in hand.  What do you do next?  In an elegant environment where the champagne flows freely and the shrimp are pretty big, it’s tempting to drift between the buffet and the bar.  You won’t make many connections that way. Do your homework beforehand.  Who is likely to be attending?  If it’s a charity event, the board members should be present.  Look at the list of event sponsors on the website.  The local leading lights from these firms should be there too. Walk over.  Introduce yourself.  Compliment them on the event if they are on the board or their commitment to the community if they are a sponsor.  Ask a few questions, trying to identify some shared interests.  Show you are knowledgeable so they don’t think you are faking.  Break away before you each run out of things to say.  Circle back at the coat check or car valet line.  Let them know you enjoyed talking with them.  Recap those shared interests.  It shows you were listening.  Suggest keeping in touch based on those interests.  Ask how you do that.  They will likely offer contact information.  That’s when you pull out a card or write something on a cocktail napkin. As you can see, these strategies involve contact, connections and follow up.  You need a plan.  You can’t just assume the other person will know what to do next. Related: Five Little Lies Many Investors Tell Themselves