How do HNW Individuals Prefer Being Approached by Friends?

by Bryce Sanders, President, Perceptive Business Solutions Inc.

You are not alone. Your circle of friends includes several wealthy folks. They know what you do and hold you in high regard. You think you could do a great job for them if they became a client. You wonder: “Why not just ask them?” To you, it’s a one off conversation you’ve never had before. To them, it’s the latest of several pitches for business coming from people who consider themselves friends. Has anyone asked wealthy people how they prefer being approached for business by people they know?

In researching my book, “Captivating the Wealthy Investor” I came across several answers to that question in various interviews. Before we look at seven responses, let’s step back and consider the landscape from the rich friend’s point of view.

The one thing in common about all the approaches they get is the desire to separate them from some of their money. Obviously they are approached by people who would like to help them invest some of it. This includes financial advisors, insurance agents and financial planners.

They are approached by people seeking charitable contributions. This includes development officers from their university, local museums and many other worthy charitable causes. Often the approach is surprisingly simplistic: “You have money. We need money. Therefore, you should give some of your money to us.”

They are approached by friends seeking their own version of private equity. “Please help me get my new restaurant started.” A local developer might be looking for investors in their next commercial project. Finally, there are people who simply want a loan.

How Do They Want to be Approached?

Let’s start with the assumption they have a general idea of what you do. This is a help and a hindrance. As a New York advisor remarked: “People may want to do business with you for a long time. The thing they haven’t figured out is why they need you.” More on that later.

1. Patience is a virtue. They would like you to be gently persistent and patient. You’ve heard “Timing is everything.” This is a strict warning not to be pushy. Things happen on their timetable.

2. Willingness to be thoughtful. They want to see you care about them as a person. You are not merely cultivating them, prior to harvesting them and moving along to another relationship. They can sense that. You want to listen and learn what’s important to them. If they have aging parents who are in and out of hospital, you ask how they are doing. If they took a planned vacation, you take an interest in where they went and what they did. This is what friends do.

3. Reintroduced through a peer. You don’t need to always bring up business, hoping to get lucky. That gets annoying. Other people can do it for you. It’s a referral in the background. The wealthy friend has a problem they share with a peer. That person says: “You should really talk to (your name). She’s helped other people with that problem. I hear she does a great job and is very discrete.” They might say: “You know, I’ve never thought of (your name) in that context. I always assumed she was just a stock broker.” Although having a client bring up your name is ideal (“She helped me.”) a peer to peer referral is fine.

4. Trust is already in place. You must be a known quantity. They need to already trust you. This is built by being true to your word. If you said you would recommend some restaurants on the resort island they will soon visit, you get it done the next day. If you borrow their chainsaw, you return it with a full gas tank. You always show up on time. Little by little, you establish your word is your bond.

5. Solution to problem. You would be happy just managing a part of their money. They don’t need that. They have established relationships in place. Everyone is doing a fine job. What they have is a problem that needs a solution. Sometimes they don’t know they have a problem. You take the time to identify it, do some research and approach them privately to discuss the problem and explain how you are in a position to help. People need solutions to problems, not more advisors.

6. “I didn’t know you did that. You never told me!” Earlier a New York advisor remarked friends often don’t make the connection how you can help them. You need to increase their understanding. None of us wants to give our elevator pitch to friends. It feels like we are stepping out of the friend role and treating them as a stranger. Instead, start by acknowledging they probably already work with an advisor who does a fine job for them. Next, introduce they may know people who don’t have that kind of relationship with their advisor. You would like to spend a few minutes talking about “What it is you do.” Then, if they come across any of those people with problems, they will know how you might be able to help. Moving the conversation into helping an unidentified third person, takes the pressure off.

7. Don’t call us…Wealthy people would prefer you be reactive. You will spring into action when they say: “I need you.” Following their rules, the easiest way to comply is to say: “I’m pretty sure you are happy with your current advisor. If anything ever changes, please give me a call.” Ideally you want to be more proactive. They will likely ask: “How’s business?” from time to time. Hear this as “How have you helped someone lately?” and relate a short, anonymous story of how you helped someone solve a problem. This broadens their understanding of what you do. Hopefully, it eventually intersects with a problem they have that needs a solution.

HNW individuals are everyone’s favorite prospect. You can get into consideration while still following their guidelines.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor” can be found on Amazon. You can reach Bryce at BryceSanders@msn.com, if you have any questions for him.