How to turn friends into clients

By Bryce Sanders | October 15, 2013 | Last updated on October 15, 2013
3 min read

Friends can make great clients. But somewhere between the prospect and client stages you’ll probably need to overcome several objections.

Here are the most common.


They think you talk about your clients. They may have big money or far less than you thought, and they don’t know you are bound by confidentiality.

Read: Send prospects the right signals

What do they say? “I don’t want people knowing my private business.”

What’s their concern? Their financial details will be common knowledge.

What’s in your favor? You have a history stretching back several years.

Approach: “We’ve known each other for five years. We socialize with the same people. It’s possible some of our mutual friends might also be clients. You’ve never heard me reveal the identity of a client before. I have no intention to start now.”

Outcome: Your demonstrated discretion confirms confidentiality.

Risk to Friendship

If you doubled their money every three years, there would be no risk to the friendship. Losses worry them.

What do they say? “I don’t do business with friends because you can’t fire them.”

What’s their concern? If the investing relationship doesn’t work out then they’ve lost both money and a close friend.

What’s in your favor? A history of trust.

Approach: “If you become my client and follow my advice, you should get a report card. If I’m not doing a good job, you should be able to fire me.”

Outcome: They now have an exit strategy that won’t make them feel guilty because it was your idea.

Why Shouldn’t I Invest For Free With No-Load Funds?

When times are good investing looks easy. Many advisors who are upfront and transparent about pricing face challenges from advisors or products that don’t disclose details as readily.

What do they say? “I can do what you do on my own. It’s a lot cheaper.

What’s their concern? Paying something when they could get the same result for free.

What’s in your favor? They’re confusing investing with stock picking and trading.

Read: 7 ways to demonstrate your value

Approach: “Some people prefer to invest on their own. They have the time, knowledge and temperament to do the job right. You may think investing involves picking stocks. Sometimes it looks easy, but research shows having the proper asset allocation and rebalancing delivers most of the investor’s return. That’s where I add value.

Outcome: They learn it’s not easy unless you give it lots of time and attention.

You’re My Friend, But You’re Too Expensive

Now it’s a different objection. They understand paying for a service but they want to pay less.

What do they say? “I understand what you do, but it costs too much. You work with rich people who can afford high fees.”

What’s their concern? What am I getting for my money? Why should I pay your prices?

What’s in your favor? They probably don’t understand how the products they’re considering are priced.

Approach: “It’s important to understand what you’re paying now. You invest for the long term, but your investment might have high upfront costs to purchase or a declining surrender charge when you sell. Many investments also charge ongoing annual fees. Utilizing a separately managed account with a money manager that’s priced ‘pay as you go,’ you only pay for the services you use while you are using them.”

Outcome: The argument makes sense. They might lease their car or rent a property. They pay for the period of time they use it.

Why Can’t You Give Me References?

Most buying choices are based on brand reputation, product comparisons by consumer groups or advice from trusted friends. Your business is different because of confidentiality.

What do they say? “Why can’t you give me references?”

What’s their concern? You’re a friend who tells a good story, but you are just looking for the sale and don’t follow through.

What’s in your favor? Confidentiality may be of greater value to them.

Approach: “We are bound by confidentiality. You can tell anyone you want we work together. I can’t. I can show you historical performance figures for the portfolio I’m recommending.”

Outcome: They understand you are discreet. They have numbers to examine.

Read: Friends without money can add to your book

Bryce Sanders

Bryce Sanders is President of Perceptive Business Solutions Inc. in New Hope, PA. His book “Captivating the Wealthy Investor” is available on