The ClientWise Blog

Doing Business With Friends

Posted by Ray Sclafani on Dec 21, 2009 9:27:00 AM


Jonathan Flaks carries the International Coach Federation distinction as being a Master Certified Coach. He is also a ClientWise coach who has been coaching advisors, entrepreneurs and executives since the beginning of the coaching movement in the late 1990's.

One of Jonathan's areas of expertise is in helping advisors to do business with friends. What follows is the result of an interview that I recently had with Jonathan, where he reveals his observations and insights on this important topic...which can be surprisingly problematic for many top advisors.

Like many ClientWise coaches, Jonathan has observed a fairly common affliction among advisors. They become obsessively tentative when it comes to the concept of doing business with friends. He has observed that, in their desire to NOT appear "salesy" or "pushy", the advisors tends to stay 5 miles away from the boundary between friend...and prospect.

As a result of this distancing, advisors send out an unintended message to their friends that...they are EXCLUSIVE, and they DON'T REALLY WANT the business of the people that they could really help. This perception is confirmed every time when an advisor hears this response:

"I had no idea that you'd even want my business." OR..."I didn't even think that I'd qualify to work with you."

As a result of this perceived image of detachment, the advisor creates the Advisor-Friend Paradox, i.e. they neglect to serve the people who trust them the most!

To avoid this illogicality, Jonathan prescribes a 6-Point plan that positions their friendship in a manner that preserves the relationship...and puts the opportunity to serve out on the table:

  1. Observe the SW Rule. The SW Rule applies to the advisor's fear of not being warmly received by all friends who they reach out to. Some will...Some won't...So what!
  2. Use Conversational Pivots. Find words that allow you to broach the topic easily. An example might be: "We have known each other for quite some time. I've never spoken to you about what I do professionally. So...I wanted to ask your permission to have a larger conversation and possibly expand our relationship. I am very appreciative of you, and would never do anything that might jeopardize our friendship. Would it be OK if we were to discuss your financial goals and concerns?"
  3. Intention is more important than language. Rule #2 notwithstanding, don't obsess about the perfect script. Make sure that you are always being attentive to your friend. This means being completely sincere in your desire to hold the relationship first...and being open to receiving a "yes" or "no" at any given moment. Moreover, if you aren't willing to accept the possibility of hearing a "no", do not approach your friends.
  4. Ask for guidance. Let your friend guide the process as the appropriate manner, location, and timing of the relationship. You might use the language, "What would be the appropriate way for you to meet where we could discuss how I might serve you financially?" This question also anchors a critical point...the advisor begins the relationship from a point of service.
  5. Be extremely present to your friend. For example, when you initially ask if it would be OK to have a larger conversation and expand the relationship, and the response is not a clear "yes"...treat it like it's a "no". However, plan to broach this topic in the future, when you might say..."The last time when we discussed how I might serve you financially, I didn't hear a clear "yes"..."
  6. Set up clear ground rules, e.g. dial down the amount of risk that the accounts are willing to accept, even if your friend's risk tolerance is greater...adopt a collaborative decision-making style...be very clear on how you will communicate any bad news, etc.

Concluding Thoughts
Many advisors dread the day when they walk into a room, and the room appears to tilt slightly...as everyone moves to the other side to avoid them. The reality: this never, ever happens except for the most brazen, shameless salesperson. What is much more likely to happen is that advisors completely miss the opportunity to serve their friends...the community who likes and trusts them the most!

Enjoyed this article? Click here to subscribe!

ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business Development