How do you transform social friends into business friends? Very carefully! But here’s the reality. Business changes existing friendships. If you become friends with your client, that’s one thing. It’s completely different if you have the friendship first.

Many years ago, a friend of mine who operates a web development company wanted to do all of my web and printing work. I was thrilled to give him the business. The work was good and projects were completed on time. But every week I started receiving invoices for minor requests I had made. And the charges were excessive. His business was having serious financial problems, and his invoices became more excessive. It put me in the uncomfortable position of addressing the situation, which ultimately ended the friendship.

These things don’t happen often but they do happen. I’m usually easy to work with (no really!) and want nothing more than to help my friends succeed. But when issues present themselves, it becomes awkward. The business issue becomes personal. Of course, some business friendships do work. I’m just saying you have to be careful.

Finding the right business

What does this have to do with you as a financial advisor? Everything! As an advisor, agent, broker, rep, or planner, your inclination is to do business with everyone. Friends, family, countrymen! Who are you to be picky? But in your role as an advisor, you are privy to important (and often personal) information, and risk is involved. This can make clients uneasy when things aren’t going well – especially those that have been your friends. And then there’s the awkward conversation that follows.

New advisors are encouraged to sell family and friends (their so-called “natural market”) life insurance even though it makes family gatherings awkward. If you are successful at this and there’s no trouble in paradise, keep doing what you’re doing. If you are reluctant to talk to your family and friends about their insurance needs, I get it. Advisors confide in me all the time and share their reluctance.

Referral source vs. prospect

Here’s the reality. If something were to happen to someone you care about and they didn’t have the protection they could have had, you would feel horrible. In essence, you didn’t do your job. You need to talk about what you do with friends and family without looking to sell them. Nobody wants to be sold. Instead, view your natural market as a referral source, not a prospect. Heck, they could transform into a prospect over time. But that’s another story. Here’s an approach that could be helpful.

Uncle Ben, can I bounce something off of you? I’m a financial advisor with XYX Financial Group focused on helping small businesses with their financial management. I’m developing expertise in the areas of life insurance, annuities, and financial planning. I’m establishing a niche with architecture and construction firms. Any suggestions you might have about learning more about and ultimately connecting with the owner of Complete Deal Construction Company would be great. As an aside, you’ve known me my whole life. And now that I’m focused on a career in financial services, I’m learning a lot about life insurance and other important financial approaches. I’m not sure of your personal situation but I hope you’re working with someone like me that’s helping you. Either way, feel free to use me as a sounding board and if I can help in any way, I’d be happy to.

And that’s it! In availing yourself to your natural market, you allow for business opportunities without being pushy and making Thanksgiving Dinner awkward. And that, in the end, is what we all want – not a total disconnect between your business life and your personal life, but a fine, well-defined line.