Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor,” can be found on Amazon.

Are you a successful financial advisor? If the answer is yes, you make a great living. Logically, the people in your immediate social circle are in the same economic bracket.

Some are even on a massively higher level! It is easy to ask strangers to do business: If you call a lead that came in through the firm’s website and they say “get lost,” you will never cross paths again. The sticky nature of friendships causes us to hold back. So, what is holding you back?

Before we look at reasons, let us consider logic: “Everyone should have the opportunity to say no.” If you ask and they decline, that’s fine. When you don’t ask them to do business, you are making the decision for them. That is wrong.

1. They have this covered. They already work with someone else. This must be the most common assumption. If they have money and they invest, they are likely working with someone else unless investing is their hobby. Start by learning if this is true. Do they have another advisor. Are they happy with the relationship. Would they recommend them? If not, why do they stay with them?
   
   
2. I already have an advisor. Let us assume you establish they already work with an advisor. They like their advisor. They do a great job! Here is the misconception: In certain situations, you only work with one service provider. You have one car mechanic (often the dealership) and one hair stylist. In other situations, you have several. How many doctors do they visit? How many wine stores do they patronize? The book, The Millionaire’s Advisor by Russ Alan Prince and Brett Van Bortel makes the case wealthy people have an average of three financial advisors. “You are obviously successful. How many do you have?”
   
   
3. Doing business with friends gets complicated. This ties into “You can’t fire friends.” Where does the business relationship stop and the friendship begin? What happens if something goes wrong? Bear in mind you have plenty of clients who become friends. The balance works out somehow. “If you become my client and follow my advice, you should get a report card. If I am doing a lousy job, you should be able to fire me.” Periodic portfolio reviews are the report cards. You have given them an exit strategy.
   
   
4. You feel they have no money. You know them pretty well. You know the restaurants they choose, the car they drive and the vacations they take. You assume they are living paycheck to paycheck. This is often an astute observation on your part. Consider the opposite. Your “wealthy” friends might spend everything and more keeping up their image. Your “cheap” friends might be “The Millionaire Next Door.”
   
   
5. If they were interested, they would come to me. It is easy to accept this logic. If you entertain, you are often discouraged by people who accept your invitations but never invite you over. You are waiting for outreach that never comes. In a perfect world, “every action should have an equal and opposite reaction.” (Newton’s Third Law of Motion.) Life isn’t perfect. Get over it. Approach them to determine if there is interest. You make the first move.
   
   
6. They think you are inexperienced. This is a problem for new advisors. Friends might know little about investing, but they have heard anecdotally the washout rate in the financial services industry is high. It’s almost as if they are saying: “Come back and ask me again in two years. If you are still around, we will do business.” Remember you are not a “one man band.” You are an agent of the firm. Sell the firm. Sell the team. You bring the resources of the firm into their living room.
   
   
7. They will think our friendship is a scam to get business. An advisor in NYC actually told me this story: He played squash with a successful business owner. They have been playing regularly for 10+ years. I asked, “Have you asked him to become a client?” He said: “I couldn’t do that. He would think I only became his friend to get his business!” I told him that was ridiculous! You have been friends 10+ years! If he assumes anything, it is that you are a successful advisor because you have been in the business 10+ years!” There are many ways you have validated your friendship. You could easily list a few if you were asked. Do not assume your friend will doubt the sincerity of your friendship.
   
   
8. They are a self-directed investor. You know they choose their own stocks. They do research. Investing is their passion. You are assuming because they do it themselves, they don’t want to pay someone top help them. There are many aspects to investing. An expertise in stock picking does not make you an expert in bonds, for example. They might be getting tired of staying on top of the market. They might welcome help, especially if they have started to take longer vacations.
   
   
9. They have a low opinion of financial advisors. You have met these people! Maybe they think badly of lawyers too! This might be a “go-away” strategy. They have an alternative, which is to invest on their own. Bear in mind if you had access to something they wanted, their opinion would instantly change. They are not trading for free. There is a cost. Identify it and compare it to what you charge. Now you are negotiating over the difference.
   
   
10. They said no once before. You started in the business years ago. You approached them and they said, “Not interested.” You have left them alone for years. Things might have changed over the years. You will not know unless you ask. You can respect their decision and also follow up at the same time.
    
    
11. They have no interest in investing. You can make the case investing has become a spectator sport. It’s on the news every night. Your friend has no interest. They never watch the financial news channels. You assume they have no interest. They might have no interest, but they still have a need. They need to plan for retirement. Their lack of interest might mean they have a keen interest in paying someone to plan for them.

Everyone should have the opportunity to say no. Don’t make excuses for them.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor is available on Amazon.

*Previously published: https://www.fa-mag.com/news/everyone-should-have-the-opportunity-to-say-no-83870.html

Disclosures:

This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation, or as a substitute for legal or tax counsel. Any investment products or services named herein are for illustrative purposes only and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance. All examples are hypothetical and are for illustrative purposes only. 

Bryce Sanders is the president of Perceptive Business Solutions Inc.. Dunham & Associates Investment Counsel, Inc. and Perceptive Business Solutions Inc. are not affiliated companies. 

Dunham & Associates Investment Counsel, Inc. is a Registered Investment Adviser and Broker/Dealer. Member FINRA / SIPC. Advisory services and securities offered through Dunham & Associates Investment Counsel, Inc. Trust services offered through Dunham Trust Company, an affiliated Nevada Trust Company.