this scenario sound familiar? You are a financial advisor of solid
standing with plenty of visibility in the community. For several
years you have belonged to major organizations in the community,
and have come to know the movers and shakers in those organizations
and the community at large: local business and political leaders,
and the heads of civic and cultural organizations. Those people
may know what you do for a living, but have never approached you
for business. You are hesitant to approach them because you don't
want to risk your existing friendships, or you fear getting a reputation
within that community of being a "pushy" broker type.
friends into clients is one of the greatest challenges investment
advisors and financial planners face, but it's not impossible. Here
are three strategies for overcoming that challenge, allowing you
to approach friends for business without crossing the invisible
but clearly defined line that separates trusted advisors from pushy
#1: Educate Them
have a tendency to make assumptions about certain professionals,
to pigeonhole them based on vague and often incorrect preconceptions.
For example, many people think accountants could never be financial
planners, since they're only bean counters who wear green eyeshades
and never write outside the margins. To counteract such misleading
preconceptions, here's a strategy to improve how you are perceived
by potential prospects with whom you are already friendly.
make a list of the friends, acquaintances, or family members you
would like as clients or who could be good sources of referrals.
Would you prefer not to approach family members? Fine. Only list
people you would be comfortable approaching. Next, meet them in
a spontaneous way. For example, let's say you are entering the clubhouse
after playing a round of golf. You see a couple having a drink,
and you ask to join them.
the conversation by addressing one of your acquaintances: "Bill,
we've known each other for about five years. I know you work at
that big pharmaceutical firm outside town and you do something in
research. I've always been curious. What exactly do you do?" Then
you take this approach, three things happen. First, Bill will explain
what he does and will usually highlight those parts of his job that
he likes best. Second, you learn new things about Bill, such as
that your information may be incorrect or dated-he may have started
in research but is now in marketing. Third, since people enjoy talking
about themselves, you put Bill in a good mood.
may think that now it's your turn to explain what you do, but you'd
be wrong. Years ago I heard a person use a great line in a similar
situation; "Bill, you know I work at ABC Securities- When you tell
your friends about me, what do you say I do?"
question puts Bill in a box. He can't say, "John, I've never told
anyone about you so I've never needed to know what you do," since
that would be incredibly rude. Instead, Bill will give a short response
such as "You're a broker who sells stocks and bonds. Right"
gives you the opportunity to briefly expand on the answer and correct
Bill's misperceptions. "Bill, that's part of what I do, but today
I also-.-" or "Years ago that was what we did, but these days.-"
The crucial part of the interaction comes next; asking for Bill's
business. To properly formulate that question, let's set the stage.
We assume you have a planning-based business and use professional
money management. Your target market is investors who have more
than $500,000 in investable assets.
formulating your question by making another assumption. If Bill's
friends use professional money management at a competitor and have
size and style diversification, those friends probably have $500,000
on the table. "Bill," you might say, "now that you know what I do,
if you know anyone who uses professional money management and is
dissatisfied with the relationship, I would be interested ill talking
with him." A variation can be based around the phrase, "and is dissatisfied
with their returns relative to the market," since most investor
complaints revolve around fees or performance.
you didn't say you could do any better. You just said you would
be interested in talking with them. It's a very low-key approach.
might then reply that he's not satisfied, and may ask what you could
do for him. It's more likely, however, that Bill will be reminded
of friends of his who complain that their advisor left the firm
or that their portfolios' performance with their current advisor
is poor. Maybe their advisor doesn't return calls. Psychologically,
people who complain are already shopping around for alternatives,
so it's a small step for a friend to suggest you might provide better
service than their old advisor.
#2: Win Them Over
now knows who you are and what you do, but now you need to take
the time for him to understand why you are better than your competitors.
social situations when people ask "How's business?" very often the
reply is either "Great- Couldn't be better," or a qualified, "Things
are picking up." Have you ever noticed that during an interview,
when politicians are asked a question that they don't want to address
directly, they just answer a totally different question? This strategy
can work for you, too.
if Bill asks you, "How's business?" respond as if he had asked instead,
"How have you helped someone lately?" You can then tell Bill a short
story about a person with a problem. (Remember client confidentiality:
stories are anonymous and general) Maybe you helped a client who
hated her job to reposition her portfolio to produce income and
take early retirement. Bill may get the message that you helped
that person or made a difference in her life. But perhaps for Bill
or for other listeners the message will be more personal: "She hated
her job. He moved around her money. She doesn't have to work anymore.
Hmm.... I hate my job. Could he help me retire early?" They may
also think of people they know who have the same concern, and will
recall that you provided a solution.
course, such dramatic success stories don't happen to most advisors
on a daily basis. Instead, consider turning a negative into a positive:
relate a story (anonymous) about one of the many people you helped
by preventing them from doing something stupid with their money.
It can have the same effect.
#3: Lend a Hand
two previous strategies take time to implement because they are
low-key, low-pressure approaches. If you want a strategy to get
business immediately, identify a need and then offer to discuss
a solution. Here's a seven-step process for doing so.
identify the need, which often may arise from a life-changing event.
For example, the person may have a wealthy friend with parents in
their 60s who live at a distance and are finding it difficult to
live on their own. Second, discuss the issue and demonstrate understanding.
The friend may feel she is the only person to have ever faced this
problem and doesn't know where to turn for advice. You know she
is very concerned about her parents' welfare; ask to talk about
assess your friend's level of comfort. You may look like a life
preserver to a drowning man-he didn't know where to turn and you
appear. Alternatively, he may classify things in different categories-you
may be a good friend but this is family and family matters are private.
and assuming the friend is open to discussion, restate the situation
and explain how you can provide an objective, third-parry viewpoint.
She may not see all the options because of emotional reasons. You
offer to do something free to help. But be careful. Your analysis
of the situation may indicate, for instance, that a good solution
would be buying long-term care insurance. Don't see this as an opportunity
to sell something, which could be disastrous and ruin the friendship.
Consider the "sell the firm" strategy instead. "Mary, this isn't
the first time I've heard of this problem- In fact, you would be
surprised how many people we have helped in a similar situation.
There's a guy in New York who has helped lots of people with the
same problem. He's a kind of specialist- Let me give you his number.
Maybe he can help you," After a moment's thought, you might add:
"He comes to our town about once a month. I'd be glad to set up
an appointment for you. If you want, I'd be glad to attend the meeting,
too, if it would make you more comfortable." You have referred Mary
to a specialist within your firm, but you haven't positioned the
referral as looking for business for yourself.
do a very good job. Provide a turnkey solution that addresses the
solution's pros, cons, and costs. Include follow-up steps. Don't
just provide a vague instruction for Mary to consider long-term
do more follow-up. Mary probably won't act immediately, but she
will have at least one solution where previously she had none. She's
more likely now to approach you when she is ready.
strategy looks attractive when a piece of business is visible. However,
it works just as well when the issue has nothing to do with investing.
You help people when they really need help and they remember. They
know how to thank you with business of their own or referrals.
can increase people's understanding of "What you do" by using opportunities
to ask people to talk about themselves and listening. You can also
turn the common question of "How's business?" into an opportunity
to explain why you're good at what you do. Asking for business is
more a strategy of addressing a need than discussing portfolio management.
Position yourself as someone who helps versus someone looking for
business. You may find yourself doing well by doing good.
Bryce Sanders, a 20-year financial services veteran,
is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania,
which trains advisors on how to identify and meet high-net-worth individuals
and transform them into clients. He can be reached at firstname.lastname@example.org.