© 2020 Arizent. All rights reserved.

Should I ... socialize with clients?

Register now

Karen Van Voorhis doesn’t usually mix her professional and social lives. But when the Sapers & Wallack vice president found herself with a pair of Red Sox tickets, she decided to try something new: invite a client to join her.

It wasn’t easy to pick a guest, says Van Voorhis, who is based in Newton, Massachusetts. Should it be a long-standing client? A new client? A prospect?

“I ultimately chose an established client, a woman I know is interested in baseball and I thought would appreciate being asked,” Van Voorhis says.

Van Voorhis likes the client personally — an important consideration given that a baseball game could last four hours — and she knew that there might be an opportunity for her firm to expand their business with the client and her family.

Choosing whether or not to socialize with clients isn’t a simple decision. Some planners find it easy to turn friends into clients and clients into friends, whereas others prefer to keep the two groups separate.

Scott Bishop, a partner at STA Wealth Management in Houston, Texas, is in the first camp, and he’s vocal about the advantages.

“Socializing with clients is a great way to solidify your relationship, to get them to feel comfortable sharing more with you, and to meet other members of their families, to help where needed in multigenerational planning,” he says.

If some of those family members or other friends need a financial planner, so much the better, as long as the planner isn’t visibly working the crowd for prospects.

“You’re not going to go to someone’s 50th birthday party and hand out business cards,” Bishop says.

During market downturns or tough times in a client’s personal life, he adds, a social relationship is a good way to keep a client. The friendship makes the connection stickier. “It’s harder to fire someone you’re friends with,” he says.

The relationship is even more solid if it involves two couples, rather than two individuals.

“If I just have a relationship with the husband and none with the wife, what are the odds of keeping that relationship if the husband dies?” Bishop asks. “But if my wife and his wife are good friends, I’m the first person she’s going to call.”

As with most client interactions, socializing with clients is best done with genuine friendly feeling, as well as with boundaries in mind. Bishop says that he tells clients with whom he spends time outside the office that he will be keeping the business and friendships aspects of their relationship separate, and that he expects them to do likewise.

“When we meet socially, we can’t talk about business,” he says. “I also tell them that, if the business relationship isn’t working out for whatever reason, we either fix it or move on, with no hard feelings. My friends are more important to me than any business income.”

Ryan Cole, an advisor at Citrine Capital in San Francisco, California, has had to tell client friends that the business relationship isn’t working out.

“Clients whom I socialize with tend not to take the business relationship very seriously,” Cole says. “They don’t seem to be quite as responsive to emails or as motivated to get things done.”

When he has fired friends from his professional life, Cole has crafted a message saying that he is no longer able to offer full financial planning services, though asset management is still an option. Rather than have that conversation, he says,

“I now have a policy of not working with friends. I try to keep my professional life and my personal life separate,” he says.

That puts friends off limits as potential clients, but Cole says that’s fine with him. By finding clients online and through word of mouth, he frees himself to hang out with his friends without feeling as though he’s constantly on the job.

Though he enjoys spending time in social settings with his clients, Bishop agrees that it does involve limits that might not exist with other friends. “You have to be careful about alcohol,” he says. “Know your limits and stay moderate. No one likes to see the person who manages his or her money out of control. You could say something inappropriate or lose a client.”

Daniel Andrews, the planner behind Well-Rounded Success in Fort Collins, Colorado, has helped a client fill out paperwork between rounds of table tennis. Personal relationships with clients are fun and add a pleasant dimension to their interactions, he says.

In his conversations with his diverse clientele, Andrews talks about subjects that other planners might consider off limits.

“A lot of political questions came up during the election,” he says. “I talked about the Ferguson riots with an African-American client.” Those discussions were productive and interesting, in part because Andrews can disagree without being disagreeable. A planner who lacks that knack should probably skip more controversial topics.

Before he invites clients to spend time with him socially, Bishop considers how much time and money he wants to spend.

“I always treat, and I might do something a little nicer than I do with friends who aren’t clients,” he says. “I think about how much time we should spend together. A baseball game is a bigger commitment than lunch. You might like someone, but not have enough in common to sustain three hours of conversation.”

Van Voorhis got lucky: she and her client chatted happily for the duration of the game. “Initially it was a little hard to get comfortable, but it got better. I knew that we liked each other personally and had things in common: political leanings, kids, travel,” she says. “It was fine and I would do it again.”

Better yet, Van Voorhis thinks the outing strengthened her connection with her client. “Now we’re talking about managing more of the family’s assets. I don’t know that this is the result of one baseball game, but it certainly didn’t hurt.

Do you have an idea for a “Should I … ” story? Please send it to fpeditor@sourcemedia.com. We might answer your question in Financial Planning.

For reprint and licensing requests for this article, click here.