Your friends know where you work and what you do. Insurance is complicated. Investing is too. They do both. Why don’t they approach you and ask for your help?

Back in May, I wrote about “10 Reasons Why Friends Avoid Doing Business with You.” Think of it another way. They want to do business, but they have lots of unanswered questions. They feel awkward bringing them up.

Here are 10 possible barriers that stand between you and doing business with your friends.


1. Will you laugh at me? —
Years ago, my wife and I were having dinner with another couple at a community event. Investing in the stock market came up. The other husband mentioned an investment he made that went wrong. That company was all over the news. I burst out laughing, thinking “How could anyone be so stupid?” Obviously, I never got their account.

Solution: Planet Fitness talks about “Judgment Free Zones.” Everyone’s situation is different. “Tell me more.”


2. Do I really know what you do? —
When I was in production, I had a physician as a client. I really liked him. One day, I had a serious conversation explaining I would like him to be my family doctor. He countered: “Bryce, don’t you know I’m a pediatrician? You would be my oldest patient!”

Solution: You may feel awkward giving a friend something you consider a sales pitch. Consider using the third person approach: “I’d like to take a moment to explain ‘What I do’. You may know someone who needs the type of help I provide.”


3. Minimums —
Ever have a friend say: “It took me a long time to convince my husband, but I have good news. We’ve decided to bring our retirement accounts over to you. There’s about $ 5,000 in each one. When would you would like to take us out to dinner to celebrate?”

Solution: Minimums imply your value is judged by your bank balance. Soften it by saying: “We find we can be of the most value to people with investible assets of (amount) and above for the following reasons…” I credit a Westchester County, NY manager for that response.

Birds talking (Photo: Thinkstock)

(Photo: Thinkstock)

4. Gossip — They think their money (or lack thereof) will be the subject of conversation. Even if you are discreet, they still worry about what a little bird might say. “He told you he has no money for your charity? I think he’s having you on. Keep asking.”

Solution: A Napa advisor used code numbers to identify client documents visible in his office. This would get the attention of visiting friends. He would explain: “It’s a small town. Some people are nosy. That’s why you won’t see client names visible anywhere in my office. If you become a client, people won’t see your name either.”


5. All the seats are taken —
Imagine you get up the courage to ask for help and the advisor says: “We aren’t taking on any new clients right now.” They would feel awkward. “What am I supposed to do now?” If you keep long hours and are always busy, they won’t even bother asking.

Solution: These people are your friends! Although you are busy, you can always find time to help a friend.


6. You are probably too expensive —
They see ads online where you can trade stocks almost for free. Their bank and alumni association sell life insurance. They assume you have a clientele of longstanding clients with no price sensitivity. You charge them extortionate fees and commissions.

Solution: This is tough. “No load” means one less person is getting paid. That firm is isn’t working for free. Fair and competitive are good words to use to describe your pricing.


7. Isn’t one advisor enough? —
I work with someone already. That box is ticked. They assume since you have one dentist, one lawyer, one mechanic and one barber, financial advisors and insurance agents fit under the same logic. If my advisor is hit by a bus, I’ll come to you.

Solution: Successful people often work with multiple advisors. I’ve always thought of you as successful. How many do you have?

Nervous boy (Photo: Thinkstock)

(Photo: Thinkstock)

8. Our friendship will vanish if I lose money — They heard somewhere “You can’t fire friends.” They are worried you won’t be able to deliver.

Solution: You need to get buy in from your clients, otherwise success is due to their wisdom, while failure is your fault. One advisor recommends the core investments (large cap growth, value funds) and diversifies when clients add new money and suggest small cap or single country funds. If the market declines, those core investments usually suffer less. A rational client realizes the advisor gave good advice. They sunk themselves with the additions.


9. Is he any good?
— This is a big issue for second career people. They knew you were a great engineer, but what do you know about retirement planning? I can’t afford to make mistakes at this stage of my life.

Solution: You are not alone. Sell the team. Sell the firm. Bring up your professional certifications.


10. He doesn’t want me as a client because he never asked —
Some people think everything has to come to them. They coast through life, barely putting in any effort. Although they’ve been contributing the maximum to their 401(k), it’s all been going into a money market fund.

Solution: Everyone should have the opportunity to say no. Don’t make the decision for them.

—Read 5 ‘One Liners’ for Asking Friends to Do Business With You on ThinkAdvisor.


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