How to Approach Family & Friends as a Financial Advisor

People say it’s not a good idea to mix professional and personal relationships.

However, when it comes to expanding your financial advisory practice, family and friends can be valuable sources of new clients. By starting with your closest network, you’ll be able to expand your business much faster. These are the people who already know, like, and trust you.

We get that initiating this conversation might feel uncomfortable. In this article, we’ll discuss some key points to consider when talking to your loved ones about their finances.

Approaching friends and family as potential clients

Approaching people in your circle, such as close friends and family members, will feel harder than when you’re talking to a stranger on the street. However, the conversation doesn’t have to be as awkward as it may seem.

Establish trust

While you might already have some rapport with your existing circle, money and wealth management will likely be sensitive issues.

Instead of approaching family members in person and giving a sales pitch, you can let them know that you’re open for business and showcase your financial planning process through a more subtle approach, like social media.

Start by sharing insightful content that highlights your knowledge of the financial industry and shows your skills as a financial professional. This can include blog posts, articles, videos, or even podcasts that discuss relevant financial topics. Be sure to engage with your audience by responding to comments and questions to continue proving your expertise.

Share client success stories (with their permission, of course) and post updates about your accomplishments, both personal and professional.

Build credibility with your family and friends through social media to make them more likely to trust your financial advice. You’ll also be top of mind when they’re ready to consult a professional about their financial problems.

Offer a service for free 

When you broach the topic of doing business with loved ones, make it clear that your primary goal is to support their financial well-being – not to make a quick buck.

There are a lot of hesitations that might come up when you start the conversation. For example, even if they know that you have the relevant certifications, such as CFP or CFA, they might still doubt your skills and expertise as a financial advisor just because they haven’t seen that side of you yet. Alternatively, they might think that it will make your relationship awkward if the experience isn’t up to their standards.

One way to overcome this resistance is by offering your financial services for free, at least initially.

This allows them to experience the benefits of working with you without feeling pressured to make any financial commitments. By providing a no-cost consultation, a free analysis of their current financial situation, or providing tax advice, you can build rapport and establish trust. 

Once that initial service is done and the confidence in your capabilities is built, you can also ask them to keep you in mind and give a referral to others should the topic come up later on. 

Let them take the lead

If your close friends or family members express interest in your financial services, don't rush the process. Money can be a sensitive subject, so let them set the pace and decide when they're ready to discuss their financial situation in more detail.

At first, it might be difficult for them to transition into an advisor-client relationship. So be mindful to match their level of comfort and be considerate when touching on the subject.

Just like with your existing clients, keep in mind that they may not be eager to dive into the details immediately. Be prepared to take baby steps and let them share as much – or as little – as they want.

Start with an open and relaxed conversation about their financial goals, concerns, or questions. This approach will help establish trust and allow them to open up gradually.

Try to encourage an environment where you can discuss the next steps they need to make instead of giving them directions and hoping they’ll follow your input. Make sure to listen carefully, empathize with their concerns, and provide appropriate guidance without overwhelming them with information or pushing for quick decisions.

As you move forward, be prepared to adapt your approach to their needs and preferences. If they prefer to have multiple smaller conversations, respect their wishes and plan accordingly.

Remember, your role as their financial advisor is to provide support, guidance, and expertise while respecting their boundaries (we’ll get into this next) and comfort levels.

Respect their boundaries

It’s easy to be skeptical of someone talking about their business, especially when they’re trying to sell you on something.

The financial services industry is no exception. It has its fair share of scammers and unethical salespeople, which has led to a natural skepticism among potential clients. Combining this with the seemingly unpredictable volatility that some financial products can have, people are bound to be cautious, even if that offer comes from a close friend.

To counter this, you should be honest about your intentions, your expertise, and your goals for helping them achieve their financial goals.

When discussing their finances, be sensitive to their concerns and tailor your advice to their unique needs and preferences.

Avoid using high-pressure tactics or making promises that you can’t keep. Instead, provide clear, objective, and evidence-based solutions that demonstrate your commitment to helping them achieve their financial goals.

Besides making sure that you’ll respect their limits, you’ll also need to guard your own boundaries. Treat your friends as you would with any other clients and make sure that you’re guarding your personal relationships along the way.

Think about your personal relationship with them

Entering into a business relationship with your friends and family can be a delicate balance to manage.

Your duty as a financial advisor is to make sure they’re on track with their financial goals. And, as a friend, you also have a responsibility to keep your personal relationship intact. While these aren’t opposing goals, fulfilling both can be a lot harder to do in practice.

To navigate this balance, it's essential to approach family and friends with sensitivity and empathy. Acknowledge their individual financial goals, concerns, and situations while maintaining a professional demeanor. 

Be mindful of the potential impact your advice may have on your personal relationship and strive to preserve the bond that exists outside of your professional capacity.

Be patient if they are hesitant to disclose certain information or if they choose not to follow your recommendations. Remember that your role is to support and guide them, not to dictate all of their financial decisions.

Share your passion

Your passion for your work can be infectious and inspire confidence in your abilities as a financial advisor. Showing your enthusiasm for helping your clients reach their financial goals can be reassuring. Stacked with your credentials and knowledge, your enthusiasm can help them be more confident that you’ll be as dedicated when working to improve their financial situation.

One way to do this is by recounting a specific instance where you helped a client overcome a financial obstacle or achieve a long-held dream. Describe the challenges they faced, the strategies you employed, and the ultimate outcome. By sharing these real-life examples, you can demonstrate both your dedication and how you can make a positive impact on their lives.

Personal anecdotes can also illustrate your commitment to ongoing education and staying current with industry trends. Share instances where you've gone above and beyond to expand your knowledge or refine your skills, emphasizing how this dedication benefits your clients.

Don’t be afraid to ask!

Rather than waiting for someone to approach you, consider taking the proactive approach. Ask your friends if they, or someone they know, could benefit from a financial planner.

Instead of approaching them with thoughts to convert them into a client, do it in a low-pressure manner. Be honest and genuine, as sincerity often opens doors more effectively than aggressive sales tactics.

When initiating this conversation, emphasize your desire to help them reach their financial goals and explain how your services have helped others in similar situations.

In addition, demonstrate your commitment to their well-being. Show respect for their time and boundaries by making yourself available to discuss their financial situation at a time that's convenient for them.

Asset-Map can help you grow your business

Your close network of family and friends can be a valuable source of new clients for your financial advisory business – especially if you’re new to the industry.

The relationship, however, can be a bit tricky for a lot of reasons. The boundaries might get blurred as you continue working together and might impact your personal relationships. In addition, convincing them to trust you with their finances in the first place might be even harder.

In most cases, you’ll need a lot more subtlety to approach friends and family about working with you. For instance, you can use social media to demonstrate your expertise so you’ll be top of mind when they need a financial advisor.

You can use Asset-Map to demonstrate your expertise intuitively through visual maps. Using intuitive graphics can make your posts more noticeable, especially if you’re using social media as one of your channels. This can also showcase how you work – and the tools you use – to make your client’s life easier.

Start attracting your client’s attention with user-friendly visual maps – get your demo today.