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Three Must-Have Conversations with People You Know

By Bryce Sanders
InsuranceNewsNet Magazine, April 2012

After four difficult years in the stock market, most people working with a financial advisor have a pretty good idea if their advisors are any good. Lots aren’t making the grade. There’s opportunity there.

Wait a second! I’m insurance, not stocks. That’s someone else’s problem. Maybe, but it’s your opportunity. Let’s assume your prospect has assets. It’s highly likely their investments include stock and related investments in addition to insurance. In their mind, it’s the stock market causing the anxiety. What other investment gets priced every day? Have you noticed the stock market doesn’t do up or down? No, it soars and plunges. No wonder they are worried.

Here are three conversations to have with friends in specific scenarios.

The Close Friend and the Risk to Friendship

You’ve known someone forever. They invest in the stock market and have the potential to be a great client. Why haven’t either of you approached the other? Often it’s the perceived risk to friendship. If something goes wrong, you lost a friend in addition to money. If you’re unsure about asking, remember—“Everyone should have the opportunity to say no.” Don’t make the decision for them.

It’s a three-part approach:

1) “You know where I work and what I do. I’ve never approached you about business because our friendship is very important to me. I’ve never wanted to put it at risk.” Stop talking. You’ve made the risk to friendship the reason for the conversation. If they are uncomfortable you’ve given them a way out. At any time they can say, “I don’t want to do business with friends either.” Because they have an out they will probably let you move to the second part.

2) “Besides, I’ve always assumed you work with someone else already. They probably give you great service and take good care of you. Most successful people have that kind of relationship with their advisor.” You’ve stated the obvious. They work with someone already. You’ve also said “successful people are an important client to their advisor.” Most people identify with the word successful. They might start to question “Am I an important client?” It’s possible they will say: “I’ve never met my advisor, what can you do for me?” That would be great. It’s more likely they will just let you continue.

3) “It’s been a difficult four and a quarter years in the stock market (go back to October 2007 and count forward). You may know some people who haven’t been as lucky as you. I thought we might spend a few minutes talking about ‘What it is that I do.’ So when you come across some of those folks you will know how I may be able to help them.” You have asked for permission in a non-threatening third party way to explain “what you do.” You can align your response to their situation. They will learn how you can help them or someone in a similar situation.

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The Friend Who is Well Connected

Your friend isn’t wealthy but they travel in the right circles. This could mean in-laws, the club circle or volunteer activities. They are a “go to” person. Let’s assume you have the ability to offer separately managed accounts or managed money as one of your investment alternatives. Let’s make two other assumptions: referrals often involve fresh money and it’s human nature to complain about your problems.

Approach your well connected friend and ask either of two questions:

“Who do you know that uses professional money management and is dissatisfied with the relationship? I would be interested in talking with them.” Or...

“Who do you know that uses professional money management and is dissatisfied with performance relative to the market? I would be interested in talking with them.”

In each statement you’ve done three things: In the beginning you prequalified with professional money management. If they use it they know what it is. If not, they will ask.

In the middle of the first statement you asked about “the relationship.” This is vague. They might interpret it as high fees, level of contact, service, etc. In the second you asked about “performance relative to the market”. The last four words are important. If the market is doing badly it’s unrealistic to assume you will be unharmed. Here you brought up performance.

The closing statement is the most important. You didn’t say you could do any better. It’s very low key. They might say: “I’m unhappy. What can you do for me?” It’s more likely they will say “food for thought.”

Now you have changed the referral dynamic. They aren’t looking for elusive “fresh money.” They are looking for someone with a problem, who complains their broker never calls or performance stinks. It’s easy for your friend to say: “You should really call my friend Steve. He’s with (firm). I bet he would return your call.” It’s human nature to want to help someone with a problem. They don’t feel they are going out on a limb either.

The Friend Doing Business with a Competitor

You have brought up business before. They’ve told you they have a financial advisor at a major wirehouse firm. They also explained they are “in this program” where one or more money managers make the day-to-day decisions and they get the trade slips in the mail.

When a financial advisor approaches a professional investor, the person choosing money managers for a college endowment for example, they ask several professional questions such as these: “When do you review the performance of the money managers you use within the endowment?” And “are you open to presentations about other money managers at that time?” Use the same questions with your friend. The conversation might sound something like this:

BRAMCO & Prudential: An Alliance For Life

“Steve, I know you use professional money management at (firm.) You’ve told me. We offer professional money management at my firm. We are competitively priced. We have good performance figures.”

Now ask the two “professional questions”:

“When do you review the performance of the money managers you’re using at (firm)? Are you open to presentations about outside money managers at that time?” In plain English you’ve asked: “When do you get your next quarterly review? Can I see you a day or two beforehand?” You do.

You are “top of mind” when your friend gets their review. The review often includes rebalancing and reallocating. Money is in motion. If they aren’t happy with past results they can use the sell recommendations as a way to raise money to send to you. You have your foot in the door.

Why should this work with your friends? It’s likely they are business owners, professionals or middle managers. They frequently review contracts with service providers to determine if they will stay with the same overnight mail company or switch to another. You are speaking the same language when you say: “review performance” or “review the relationship.”

These conversations are low-key and non-confrontational. Everyone should have the opportunity to say no. Give them that opportunity.

Bryce Sanders is president of Perceptive Business Solutions Inc. His book, Captivating the Wealthy Investor, can be found on You can email him at [email protected].

© Entire contents copyright 2012 by, Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from


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