Friends can be fickle. On one hand, they’re resistant to doing business with you because they worry you may discuss their finances around mutual acquaintances. On the other hand, if they have a serious problem they’ll want help from someone they know and trust.
They assume advisors talk about their clients because most other businesses rely on endorsements to attract prospects. They don’t know you’re bound by confidentiality; if they do, they may not believe it’s a strict requirement.
Even if they know it’s a serious rule, they worry about inadvertent slips. Say your lives are intertwined through the alumni association, museum, community association, religious activities and your children’s school. They all do fundraising. Your friend is worried you’ll say something like, “Ask her for a big check—she can easily afford it.”
Here are four ways advisors I know have handled confidentiality concerns.
Strategy 1: Coded files
The advisor keeps his clients’ financial plans in binders stored in a highly conspicuous bookcase in his office. The binders have code numbers on the spines. They intentionally attract visitors’ attention.
What he did: Watched the visitor as the coded binders caught her attention.
How he said it: “We live in a small town. Everyone wants to know everyone else’s business. That’s why when you visit, you won’t see a client’s name on any papers or documents visible in my office. If we ever worked together and a friend visited, they wouldn’t see your name on any documents either.”
Why it works: You’ve demonstrated controls are in place to keep client identities private.
Strategy 2: Take Credit For Past Behavior
A friend brings up the confidentiality issue. The advisor puts it into context.
What he did: Used past behavior as a leading indicator.
How he said it: “We’ve known each other for five years. We know a lot of the same people. It’s logical to assume some of them already do business with me. You’ve never heard me mention a client’s name before. It’s unlikely I’m going to start now.”
Why it works: Your friend probably knows people who do business with you. You’ve given her an “Ah ha” moment. She realizes you’ve maintained confidentiality all along.
Strategy 3: Where did we meet?
Your friend knows you’re honest, but worries you may be too honest. She worries you’ll give up a client’s name if asked a direct question.
What he did: Volunteered a scenario showing how he would respond to a direct inquiry.
How he said it: “We’re friends and we also work together. You visit my office downtown. From time to time people ask: ‘How do you know (X)?’ or ‘When did you meet?’ I usually reply, ‘We met downtown several years ago.”
Why it works: She was concerned about a likely scenario. You showed you encountered it previously and have an answer ready.
Strategy 4: Getting referrals
Reminding clients about confidentiality can lead to business.
What he did: Let his client know he can’t use her recent great performance as a testimonial.
How he said it: “You had a very good year in 2013. I can’t tell anyone about it because I’m bound by confidentiality. You’re not. You can tell as many people as you want how well you did and how we work together. I would encourage it.”
Why it works: The client may mistakenly assume she doesn’t need to send referrals because you can use client results to promote yourself. You’ve reminded her how well she did and how you respect confidentiality.