Doing Business With Friends

As a financial advisor, I embark on a highly trusted relationship with my clients. Through the years, I have developed some outstanding friendships with clients. I get to know much more about them than their assets and liabilities. Many of the clients are much older than I am, so they are unlikely friends, but friends nonetheless. I often hear stories about their children, grandchildren, pets, memories and vacations. I take the time to listen. I also share stories with them about my children, pet, vacations and memories. We don’t limit our interactions to conversations about retirement and money.

I began working as a financial advisor when I was 22 or 23 years old. None of my friends had money to invest. I target most of my client acquisition to people that were my parents age or even older. These are some of the unlikely friendships I still maintain today. I did not necessarily have the most in common with them, but being someone they could talk to was enough to build our relationship.

As I get older, I am finding that more of my friends from social settings have become successful and are building wealth. I am always cautious about propositioning them to become clients. I don’t want a business relationship to change our social relationship. But I don’t want them to go to someone else because: a. there are some untrustworthy advisors out there, and I’d had to see them get burnt, and b. if they go elsewhere, that is a lost business opportunity. Don’t get me wrong, I don’t look at my friends as a list of Glengary leads, but if they are seeking investment advice, I’d like to be their guy.

The challenge I feel is letting friends know that I want their business, but not at the cost of our friendship. I should never let the reason that I’m not doing business with a friend be that I didn’t ask. On the other side of the equation, the friend might assume that if I don’t ask, that I don’t want the business. It’s kind of a strange poker game. I always struggle with finding the right words to tell a friend that I am happy to take them on as a client, but that I won’t feel slighted if they choose to handle their business elsewhere. It won’t get in the way of our friendship.

I was talking to an older colleague recently about this, and he’s faced the same issue at times. He said he came to the realization that he felt that if he wouldn’t want to do business with friends, what does that say about how he feels about what he does? He decided to be more outright telling his friends that he would be happy to take them on as clients but wouldn’t let it change their friendship if they did not.

Another thought, if I needed a plumber, I would first think, "Do I know any plumbers?" At least if it were a friend, I could have confidence that they wouldn't be out to rip me off. My wife goes to a dermatologist that is a friend of hers. They were friends before she needed a dermatologist.

I think some of my reservation is that I’ve worried that engaging in a business relationship with a friend will change the dynamic of our friendship. I need to continue to remind myself that my business relationship has, more often than not, resulted in deeper friendships with clients.

So, if you’re a friend of mine reading this, let it be known, I will be happy to take you on as a client. I will not let our business interactions get in the way of our social friendship. We might just become closer friends as a result. Also, don’t be surprised if I bring this up in conversation over a dinner or on the sideline of a soccer game. But, I won’t harass you about it. Your friendship is more important to me than chasing a business relationship.