When can you ask your wealthy friends for business?

It's a delicate situation but one that can bear fruit professionally

When can you ask your wealthy friends for business?
Bryce Sanders

Do friendships have life cycles? A better question is, do they mature over time? Fine wine develops complexity as it ages. Some great wines have the ability to last a very long time. A bottle of the 1870 vintage of Chateau Lafite Rothschild sold at Christie’s for $27,600 in June 20021. Friendships mature too. When is the right time to ask a friend for business?

Let’s assume there are seven stages in the development of relationships. There are reasons why you could approach someone at any of these stages. There might be two catalysts. The first is they’ve expressed an interest, seeking to draw you out and learn more. The second is the identification of a serious problem they are facing; one you feel in a position to help address. Let’s set those aside for the moment. If either happens, you will know it.

Seven stages in the development of relationships

I’m making the case relationships develop through seven stages. Here they are:

1, Strangers

You are meeting someone for the first time. It might be at a social event. You might be sitting next to them on a flight. They might be the spouse of a business acquaintance. Polite conversation often includes “What do you do?”

2, Acquaintances

This includes nodding relationships. You know each other, but not that well. You greet each other on the street. You sit together non the commuter train when heading into the city.

3, Identification of common interests

You see this acquaintance over and over. Perhaps your children attend the same school and you show up at parent meetings or on the sidelines at school sports. The connection is you both have children the same age. The interest could be different: you discovered both of you are wine or whisky fans.

4, Friendship

That common interest moves both of you from acquaintance to friend status. You carpool to school meetings together. As whisky fans you head out to new whisky bars together. You do wine shopping together. The shared interest has become your bond.

5, Trust

You quietly determine if you trust each other. It might start with borrowing garden tools. Does your friend return them? Are they in the same condition? I think our friends loved lending me garden tools. If I used their shovel and it broke, I bought them a new one! This trust takes on a human aspect. They might have a young child. They have asked themselves: “If we had to go out of town because of an emergency, would be comfortable leaving out young child with (you)?” 

6, Identifying major issues

Most people wouldn’t describe themselves as an open book. They don’t open up easily. They might have a serious, but not life-threatening medical problem. Their marriage might be in trouble. They tell you about it privately. You respect their confidentiality.

7, Addressing the issue

This fits into two categories. The problem might be related to your profession, or it might not. You respect your friend for sharing this intimate aspect of their life. On the previous level, you might have said: “Whenever you want to talk, I’m here.” Now you see your relationship on a higher level.  You say: “I want to try and help you solve this problem.” If it’s within your professional expertise as a financial services professional, they might become a client. If it’s a personal matter more in the lifestyle area, you are helping in other ways.

8, When is the right time to ask for business?

It’s easy to determine Step Seven or possibly Step Six is when you bring up business. Why? Because you have identified a problem in need of a solution.

I make the case the time to ask is back at Step Five. Why? Because they have made a conscious decision whether they trust you or not. You passed the test! They trust you! They have not confined their degree of trust to your skills as simply a babysitter! They know what you do. You are a financial advisor. They have “tried you on,” similar to a garment, to determine if they liked the fit. Put another way, they asked themselves: “Would I be comfortable with (you) handling my money?”  The answer they gave themselves is yes!

You might be a Type A personality, but some of your friends are not. They don’t announce you passed a secret test, then hand you their account statement. However, they made a decision. They are ready to be asked.

Try this exercise

Make a list of the people you know. Assign them to different tiers, one through seven. Take those names at tier five and beyond. Approach them to talk about business. You might be surprised how receptive they might be.

Next time, we’ll look at ways you might initiate that conversation.

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.

1) https://www.christies.com/en/lot/lot-3942560