Why do people think the door swings only one way? Clients and advisors often develop friendships. The business relationship evolves into one that’s both social and professional. Yet many friends hesitate to do business with people they know. They might say: “You can’t fire friends.” What next?
The Risk to the Friendship
Although it feels like rejection, it’s actually a compliment. The message is likely “I place a high value on our friendship. Doing business brings us into uncharted territory. If something goes seriously wrong, I risk losing both a business relationship and your personal friendship. That’s too high a cost.”
By the way, there’s an exception to this logic: If you have something they really want, like an extra ticket to the Super Bowl, they will play the friendship card as a way to guilt you into choosing them over others!
But that doesn’t apply here. You offer a service they may or may not think they need. They see you as one of several providers. You need to win them over.
Strategy No. 1: The Report Card
What’s the real issue? The friend is concerned that if the business relationship doesn’t work out, they won’t be able to step away without also losing the friendship in the process.
Here’s a strategy to consider: I would tell my clients “If you become a client and we work together, you should get a report card. If I’m doing a bad job, you should be able to fire me.”
That might sound insane! Talking about firing me before we even get started! Why would I do that?
Let’s talk about report cards. These are the periodic reviews you deliver, ideally face to face. You are being accountable. You made recommendations and reporting back on the results. You have lots of tools at your disposal. You compare performance to a blend of indexes weighted to match their asset allocation. Comparing a portfolio that’s 50% stock and 50% bonds to the S&P 500 isn’t fair, because the index is 100% stock. You will be accountable for every security in their portfolio.