Friends, clients and rule breakers

How do you separate business time from personal time without offending anyone?

Friends, clients and rule breakers
Bryce Sanders

Social prospecting can be both fun and yield great results. You make friends. They become clients. Unlike a strictly business relationship that comes from a lead or prospecting, there’s a personal element involved. How do you separate business time from personal time without offending anyone?

Here are a few points from my book Captivating the Wealthy Investor.

Balance in the relationship. Your new friend started doing business. Maybe they gave you a smaller amount that you expected to “try you out". To your surprise, they are incredibly needy! They call a lot. They insist on talking with you. Maybe it’s the other way around – you call them about business, but they rarely return calls. Patience is a virtue.

The relationship is often similar to the scales of justice. Sometimes the balance seems to go in one direction. You are giving a lot but not getting much in return. Once both parties get comfortable with each other, the scale moves to the center position. It might even continue, with them saying: “I just got some unexpected cash. What should 'we' do with it?"

You need to be patient with your friend who is a new client.

Calling at all hours. You’ve likely had this problem. They call during dinner with a business question. They change the focus of a relaxing evening out for drinks to a business conversation. You aren’t in the right mindset. You remain polite and patient.

There’s an unspoken flip side. Your new client is afraid you will bring up business at inopportune moments. They might think they are being ambushed. 

My solution to this problem was simple. I would tell those friends I will only call them about business during the working day. This was followed with “You aren’t under the same restriction. If you have a question, you can bring it up anytime.” They usually caught on and said: “We understand your personal time is important too. We will abide by those rules.”

The pop quiz. Of couse, the above agreement seems to get suspended if the stock market has a free fall day. They call while you are in bed, having an early night.  “How am I doing?  What’s my account value?” 

You can address this together online. Let them know that. A good strategy is to explain it’s better done when you are at your desk in the office in the morning. This allows you to access research and not be under time pressure.

It’s also good to schedule regular portfolio reviews. You can mention they are scheduled for a comprehensive review in nine days, but if this is really important to them, you can pull the report together and advance the timeline. Clients are often comfortable with waiting for a comprehensive, prepared analysis instead of something put together in a hurry.

Confidentiality. They became your client because their friend is already a client of yours. They are serving on the museum’s capital campaign as a volunteer. They intend to ask your mutual friend for a large contribution. They call you and ask: “How much money does she have? You must know.”

It’s a confidentiality issue, but they feel friends bend the rules for friends. A good strategy is to explain the confidentiality aspect. Turn the situation around. If that same friend was sizing them up for a charitable “ask” would they be comfortable if I shared details about their financial situation and size of the account. The answer is usually “Absolutely not!” That should close the matter.

Respect for the rules. Everyone wants to cut through red tape. This might manifest itself as signing their spouse’s name on documents, placing an order in a single name account (that isn’t theirs) or using creative accounting on net worth information on option trading paperwork. Their justification might be: “We do it all the time.”

Bring them back to earth. Remind them, thanks to technology, a forged signature is stored electronically forever. If there ever was an issue in the future, the other party could state “That’s not my signature.” They have committed a crime.

Another good answer came from a fellow at our local post office. When I was filling out a form and asked “Can I just put down anything?” he smiled and seriously replied: “Ehen you sign the document you are attesting that everything above your signature is true.” That makes an impact.

Yes, they need a Power of Attorney before placing orders in an account without their name on it. This is good to suggest ahead of time. Their partner might “surprise” them and say: “absolutely not.” Today, it’s pretty easy to get someone on the phone and get their approval.

Friends can make great clients. Sometimes you need to get rules in place beforehand.

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.