man with headphones sitting at work computer smiling (Photo: Shutterstock)

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Many people separate business from pleasure.  It'ssound advice for avoiding workplace romances, yet not a good reasonfor eliminating friends as potential clients.

3 reasons for doing business with friends

Some people draw a line between their work and personal lives.Not necessarily a good idea.

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1. Growth.  It's difficult to growyour practice if you focus on who you won't accept as aclient.  Imagine if someone said: "I'm not doing businesswith women."  According to the US Census, they represent50.6% of the US population, so your prospect pool would behalved.  Suppose you won't do business with left-handedpeople?  They represent about 10% of thepopulation.  The average American is said to know about600 people.  Why take people who already know and like youoff the table?

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2. They will buy anyway.  Imagine yousold copper cookware. You didn't approach friends about buyingcookware.  Fine, they wouldn't starve.  Butinvestments are different.  Yourfriends  have retirement assets.  Theyneed to plan for retirement.  If you don't approach them,it's not as if they won't invest at all.  Off course theywill invest!

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3. The train wreck.  Point two leadsinto this one.  Suppose they get bad advice. They lose half their money!  What will they do? They will come to you, of course!  You are theirfriend.  They trust you.  You work in theindustry.  They will say: "Take over theaccount."  They will say "Can you make me wholeagain?"  A 50% loss means you need 100% appreciation toget back to their starting point. The moral of the story is simple:If you are going to be called in when things have gone bad, why notget in on the front end and try to keep things from going bad inthe first place?

6 reasons friends want to do business with you

We often focus on why friends don't do business with agents theyknow.  There's another side to that story: They often wantto do business with you.

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1. Trust.  You've earned it.  Thattakes a long time.

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2. Understanding.  Financial planningquestionnaires ask lots of questions.  Only close friendsknow if they are proud or disappointed with theirchildren.  Friends know about the strength of theirmarriage.  A person I interviewed said: "You understandthe tapestry of their lives."

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3. Personal attention.  They won't beyour biggest client, but they think they will get that level ofservice.  Why?  Because you arefriends.  You will end up giving it to them too.

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4. Known quantity.  Ever hearWYSIWYG?  What You See Is What You Get.  Theyknow you and are comfortable with you.  It's not like aprospect meeting an agent for the first time.

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5. Objective advice.  Friends tellfriends what they need to hear.  You've had friends whoare making poor relationship choices.  They tellyou.  You share your advice.  You don't pullpunches.  "What were you thinking!"  Friends knowother friends will give it to them straight.

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6. They like you.  People do businesswith people they like.  Simple as that.

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There's a compelling case for doing business withfriends.  You will be tactful, but don't take them out ofconsideration.  Everyone should have the opportunity tosay no.

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Bryce Sanders ispresident of Perceptive Business Solutions Inc. He provides HNWclient acquisition training for the financial services industry.His book, "Captivating the Wealthy Investor" can be foundon Amazon.

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Bryce Sanders

Bryce Sanders, president of Perceptive Business Solutions Inc., has provided training for the financial services industry on high-net-worth client acquisition since 2001. He trains financial professionals on how to identify prospects within the wealthiest 2%-5% of their market, where to meet and socialize with them, how to talk with wealthy people and develop personal relationships, and how to transform wealthy friends into clients. Bryce spent 14 years with a major financial services firm as a successful financial advisor, two years as a district sales manager and four years as a home office manager. He developed personal relationships within the HNW community through his past involvement as a Trustee of the James A. Michener Art Museum, Board of Associates for the Bucks County Chapter of the Fox Chase Cancer Center, Board of Trustees for Stevens Institute of Technology and as a church lector. Bryce has been published in American City Business Journals, Barrons, InsuranceNewsNet, BenefitsPro, The Register, MDRT Round the Table, MDRT Blog, accountingweb.com, Advisorpedia and Horsesmouth.com. In Canada, his articles have appeared in Wealth Professional. He is the author of the book “Captivating the Wealthy Investor.”