If you identified a need and saw a way youmight help, would you walk away because you didn't like the person?You need a strategy. (Photo: Shutterstock)

“I only do business with people I like.”  How advisorslove to say that!  But the reality is different. Newer advisors have numbers to hit.  Good advisors rarelyif ever leave money on the table.  Put another way, if youidentified a need and saw a way you might help, would you walk awaybecause you didn't like the person?  To help you helpthem, you need a strategy.

Who are these frenemies, anyway?

According to the Merriam Webster dictionary, a frenemy is “One who pretends to be a friend but isactually an enemy.” In a Psychology Today article “What is a Frenemy?” thesubtext explained “An evolutionary perspective on staying friendswith those we can't stand.”

Let's think in practical terms about who in your life is apossible frenemy.  Maybe you married theirsister and got the in-laws as part of the package. Theydon't know why their sister married you.  They suspect youare cheating.  They think you steal money from clientaccounts to support your lavish lifestyle.

This does not look like a good prospect.  There's someupside, but unlimited downside.

Yet you are becoming the family advisor.  If you spot aneed or they approach you with the attitude of “I guess I should dobusiness with you.  Everyone else does,” you need astrategy to address the situation.

7 strategies for working with frenemies

Let's assume you already know the downside.  Here areseveral ways to proceed:

1.  Let sleeping dogslie.  If they haven't mentioned doingbusiness with you, you could take the “do nothing”approach. You haven't identified any glaring need. They just glareat family holiday dinners.

Rationale:  You might be walking awayfrom business, but you are avoiding headaches.

2.  Introduce the team.  Youmight work alongside other advisors with a shared productionnumber.  You have a marketing brochure and a team webpage. Your frenemy asks about investing, so you invitethem to your office to meet the team.  Maybe you bring theteam along to their house.  Sell the firm.  Theyare a team client.

Rationale:   The in-law mightfeel an obligation to do business, as a sign they aresupportive.  They don't like you, but they can rationalizebeing a client of the firm you work with.  In meeting theteam, they might bond with one of your partners. Then they areworking “with you” but not directly with you.

3. Few moving parts.  There's no team,it's just you, and you decide to approach the frenemy forbusiness.  Stick to plain vanilla products with few movingparts that perform as advertised.  What could be simplerthan a certificate of deposit or Treasury bills they will hold tomaturity?  Or they might need life insurance. You can finda straightforward product.

Rationale:  Complicated products areoften difficult to explain or misunderstood.  This canlead to problems and complaints down the road.

4.  Enter the manager. Treat yourin-law as a VIP.  Bring them into the office, introduceyour manager, who welcomes them, says good things about you andinvites them to call in the future.  Obviously, you haveapproached your manager a few days ahead of time, explained thesituation and the recommendations you intend to make, consistentwith their situation.

Rationale:  Your manager has seen thisscenario before.  They know you are acting in yourin-law's best interest.  They will suggest you documentevery conversation using the firm's client relationship management(CRM) software. If something goes wrong, you have an ally.

5. Spell everything out.  You mostlikely do this with every client.  Go through thefinancial planning process, explain why you need this information,and present the plan alongside your recommendations.  Linkeach need to the investment that helps address it. Explain in granular detail how you and the firm makemoney.  Discuss the “What if” scenarios.  Set upa schedule of periodic review meetings.  Documenteverything.

Rationale:  You've followed the firm'sprocedure.  You've documented everything. The frenemy feels you have treated them with respect, andis confident they're on the straight and narrow path.

6.  The pressure cookeranalogy.  They want to invest instocks.  You make some recommendations.  Theysecond guess you all the time, work in their ownpicks, things the firm doesn't follow and you've neverheard of before.  Keep in close touch, especially duringvolatile markets.  If you go through several months ofdeclining markets without calling, it's like opening the lid of aheated pressure cooker.  The lid flies off and hits theroof.

Rationale:  Like a car going downhillin wintery conditions, you are tapping the brakes frequently,instead of picking up speed and hoping the car doesn't skid out ofcontrol later.

7.  The road map.  As youbegin the relationship, you explain “If you follow my advice, youshould get a report card.  If you think I'm doing a badjob, you should be able to fire me.”  The portfolioreviews you schedule are the report cards.  It's similarto the pressure cooker analogy.

Rationale:  Even if they don't likeyou, they are probably wondering how they can pull out down theroad without creating a family rift.  However, you'veoutlined an exit strategy, and now they won't feel guilty using itif necessary, because it was your idea.

There are many reasons for not doing business withfrenemies.  But sometimes, you must.  A financialadvisor in New York shared a great observation:  “If youdon't have a good relationship with your brother-in-law, it'shighly unlikely it will improve when he becomes a client!”

Bryce Sanders is president of PerceptiveBusiness Solutions Inc. He provides HNW client acquisition trainingfor the financial services industry. His book, “Captivating the Wealthy Investor” can be foundon Amazon.

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