Clients Or Friends? Or Both?

Clients Or Friends? Or Both?

If you think of successful advisors as gregarious extroverts who number their client-friend relationships in the dozens or hundreds, then think again.

Advisors interviewed by National Underwriter say only a handful of their clients become close friends, and for good reason. While friends enrich their lives both personally and professionally, advisors point to several reasons for keeping this elite circle small: the impracticality of socializing with a large group of people; the desire for privacy outside of work; and the challenges of maintaining objectivity when counseling clients who are close to them.

“I dont know that you want to be friends with every client,” says Troy Axelson, a senior financial consultant with Linsco/Private Ledger Corporation, a St. Paul, Minn.-based affiliate of USAllianz. “The friends I do have share my beliefs. And we have the same outlook on life.”

Adds Sharon Emek, a partner at CBS Coverage Group, New York, N.Y.: “Only a small percentage [of my clients] lead to friendshipsmaybe 5%. Well do lunch, play golf or go to a charity event. But as to the rest of my clientele, we really dont interact in each others personal lives.”

And thats no loss professionally. Producers say the key to achieving success in ones practice depends not on establishing tight personal bonds with the client, but in providing exemplary counsel and service. The greater the social distance between advisor and client, the easier it is for the producer to deliver objective guidance, divorced of emotional involvement in the clients circumstances.

There is also the issue of professional pride. Advisors say they prefer the relationship to be founded on winning the clients confidence in their expertise and integrity, rather than any influence they might exert through personal attachment. And, indeed, producers note that many client relationships blossom into a friendship, not vice-versa.

“If I were going to have open heart surgery, I wouldnt ask my best buddy to do the job,” says Bob Nelson, a vice president of the Business & Estate Planning Division at Grace-Mayer Insurance Agency, Omaha, Neb. “I would look for the very best surgeon there is. Similarly, I want the professional relationships in my own practice to be based not on cronyism, but mutual respect.”

When dealing with friends, producers say they sometimes have to be extra diligent in delivering the quality of advice and follow-up service expected by their broader clientele.

“I always remember that I cant take clients who are friends for granted,” says Emek. “I must take care of them, maybe even better than I otherwise would, so they dont think Im muddying the waters. I must always strive to ensure that my judgment is not clouded and my emotions kept in check.”