how do u ask your family for money?

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brothaK's picture
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Joined: 2006-04-18

im new to financial planning, and was wondering how you guys went about asking your family to invest their money with you??i mean obviously mom and pops isnt that hard to askbut like the "uncle" or that rich family friendisnt it really akward?? how do you all do it?

doberman's picture
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Joined: 2005-02-22

My services are strictly off-limits to relatives. I don't even recommend other brokers, if the relative needs help. If the recommended broker "loses" (notice the correct spelling of the word) them money, YOU are dead!
Money is thicker than blood. Lose money for a relative and you'll spend the holidays by yourself. Guaranteed your name will be mud to the rest of the family.
Do you really want to be soliciting business at family reunions? Guaranteed, you'll never be invited to another family gathering.
If a relative won't lend you money, they won't give you money to invest.
If you need family money to make it in this business, you ain't gonna make it in this business.
 

Greenbacks's picture
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Joined: 2004-12-21

Great advice.
Your branch manager will tell you different but remember when you fail he/she or some one else in your office inherits your assets. He could care less where they come from.    

D.H.K.'s picture
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Joined: 2005-02-27

No reason you can't sell them insurance.I agree to NOT manage their assets, but if they have an insurance need, they might as well do that through you.

babbling looney's picture
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Joined: 2004-12-02

You don't ask.  Eventually they "might" actually come to realize what it is that you do and give you some of their assets to manage.
I was  in the business for about 7 years before my family clued into the fact that I actually managed other people's money for a living. I never asked and never solicited or prospected at family gatherings.  If I was asked a question or a topic came up (not started by me) I would answer.   It is weird.  As if you are an auto mechanic and own your own shop but your family is surprised that you know how to tune an engine.

exEJIR's picture
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Joined: 2005-05-12

brothaK wrote:... how you guys went about asking your family to invest their money with you??
My suggestion is...  DON'T

Anonymous's picture
Anonymous

One of the biggest problems you can make for yourself is the issues created going after friends and family. Go after clients and get into the swing of actually doing your job. The friends and family will come. If you go after them straight away they balk at you and it screws with your head. Learn from my mistakes. It isn't about screwing up their money so much is that if they have a less than enthusiastic reception to your bid for their business it fcuks up your confidence.The month after I left the business my buddy was one of the guys who won the Powerball. Eight million in assets I could have gotten. He could have gone with someone else though, pissed me off and then ruined the friendship. Not worth it, especially given that he's taking a bunch of his friends, me included on a big trip. Use the time you would spend going after your friends business elephant hunting, at least in this pursuit you will have nothing to lose and everything to gain.Just the thoughts of a sh*tty ex newbie broker.

Indyone's picture
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Joined: 2005-05-31

I don't ask for family $$$, but I damn sure asked for them to move it when I left my last employer (which they all did)!  Over the years, I have opened several family accounts and I'm happy to have them.  They are loyal clients and we have no problem keeping business apart from personal family relationships.
It probably doesn't make sense to chase family business when you are brand new to it, anyway.  Take some time to learn the business and develop a track record and then let family members come to you.  In general, I trade at cost for parents, spouse and children...everyone else pays full price...It's all about a sense of worth, and I feel I am worth no less just because I am working for a family member...if anything, they should feel like I will treat their business with the utmost care since we are family, and be willing to pay more (even though I would not charge more).
...just another opinion from the peanut gallery...

Indyone's picture
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Joined: 2005-05-31

SonnyClips wrote:The month after I left the business my buddy was one of the guys who won the Powerball.
Just the thoughts of a sh*tty ex newbie broker.
WTF?!!  Did I miss something, Sonny?!!  You out of the biz already?  I'm curious...tell us what's happened since you got your seven...

rightway's picture
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Joined: 2004-12-02

babbling looney wrote:You don't ask.  Eventually they
"might" actually come to realize what it is that you do and give you
some of their assets to manage.
I was  in the business for about 7 years before my family clued
into the fact that I actually managed other people's money for a
living. I never asked and never solicited or prospected at family
gatherings.  If I was asked a question or a topic came up (not
started by me) I would answer.   It is weird.  As if you
are an auto mechanic and own your own shop but your family is surprised
that you know how to tune an engine.

Another good post. 

brothaK's picture
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Joined: 2006-04-18

very nice posts guysthank you all for your helpi'm so relieved now because I thought your first clients would be only your relatives. which would completley deter me from this profession since it's the most awkward thing in the world to do.i'm planning on getting involved with some organizations which would hopefully bring me a step forward to at least meeting some new hnw people

bankrep1's picture
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Joined: 2004-12-02

When your new stay away from your friends and family.   Take a look if they ask and make sure they don't have all their 401K 100% in company stock or 5 different large cap funds and point out their bloopers, but until you have been around 5 years I wouldn't bother.  Don't know what your doing yet.  After 5 years they will be coming to you.

munytalks's picture
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Joined: 2006-04-17

Friends, Family and Fools- those are usually the first places to look for money when you are new. BUT those that have been around a bit all agree ( and isn't THAT frightening)  DON'T DO IT. They all listed good reasons not to ask but here is one more- If you rely on 'sure' money when you are new, it will create a false sense of success and you will not truly develope your own abilities to make a living in this business. When the FFF's run out, your pipeline dies and you 're done.

Shrewd's picture
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Joined: 2006-04-27

Interesting to me that a group of people that are supposed to be knowledgeable financial professionals don't trust themselves enough to handle family money.

frumhere's picture
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Joined: 2005-02-22

I never went after family money.  They have turned it over to me and people that have left the biz who have also turned over the family assets to me. 
My arguement, as above, is that i work very hard to get my clients good returns and why sholdn't my family be included.
 

anonymous's picture
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Joined: 2005-09-29

Is the work that you do important?  Do you make a real positive difference in the lives of your clients?  If the answer is "yes", why would you be willing to help out strangers, but not family.
On the insurance side of the business, I couldn't imagine not calling on friends and family.  I could not live with myself if my cousin died and his family (my extended family) was in poverty because I never called on him because I was afraid of messing up a relationship.
The investment side doesn't matter that much.  There's no guarantee that I can do any better for Uncle Bob than his current broker.
To really be successful in this business, you must learn to prospect.  If friends and family don't think enough about you to give you referrals, why would strangers? 
My friends and family did not do business with me in the beginning.  However, they did refer me to others.  Without these referrals, I would not have survived.  My friends and family have subsequently all become clients.  Friends who become clients become better friends.

doberman's picture
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Joined: 2005-02-22

Money is thicker than blood.
I only do business with clients I can fire and never have to see again.
 

exEJIR's picture
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Joined: 2005-05-12

Shrewd wrote:Interesting to me that a group of people that are supposed to be knowledgeable financial professionals don't trust themselves enough to handle family money.
How long have you been in the biz?

anonymous's picture
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Joined: 2005-09-29

I'm willing to bet that the vast majority of people who stay away from family money are investment advisors and not financial advisors.
I am not talking about job title, but what you actually do for your clients.  I simply can't understand how if someone is helping people with their complete financial picture, how they cannot work with friends and family.  The work that we do is just way too important to not work with the ones who we care the most about.
I completely understand investment advisors not working with friends and family.

bankrep1's picture
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Joined: 2004-12-02

I said stay away until you have some experience.  Friends and family are fine but probably not where you should learn.  I don't think a rep should start on his own either (even though I did), they should be mentored or work as an asst for several years.

doberman's picture
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Joined: 2005-02-22

anonymous:
I'm willing to bet that the vast majority of people who stay away from family money are investment advisors and not financial advisors.
I am not talking about job title, but what you actually do for your clients.  I simply can't understand how if someone is helping people with their complete financial picture, how they cannot work with friends and family.  The work that we do is just way too important to not work with the ones who we care the most about.
I completely understand investment advisors not working with friends and family.
-------------------------------------
If, as a financial advisor, you don't recommend any investment products that offer a potential for loss, then help your relatives. Otherwise, resist the temptation of blood money and preserve the family peace. You'll thank me at Thanksgiving. 

anonymous's picture
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Joined: 2005-09-29

Doberman, I've lost money for family.  Just like it doesn't hurt my relationships with strangers,  it hasn't hurt my relationship with family.
Again, I believe that the work that I do is too important to not work with those who I care about the most.
I'm willing to take the chance of someone being mad at me because their account has lost value.  I'm not willing to take the chance that my extended family will have financial difficulties forever because I didn't talk to them about insurance.
I push family members for the insurance sale.   I don't push for the investment sale.
 

iconsult100's picture
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Joined: 2005-09-07

I love working with family members because then I know they aren't out getting screwed by some annuity geek or Ed. Jones rep. 
I NEVER actively prospect family, I send them my monthly newsletter, but I don't hound them about their money.  I let them come to me.

anonymous's picture
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Joined: 2005-09-29

.....and how will you feel if a family member doesn't come to you and dies of a heart attack and your nieces and nephews and sister-in-law are screwed financially because there wasn't enough life insurance?

remotecontrol's picture
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Joined: 2006-04-07

Family, may I have some money?

Shrewd's picture
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Joined: 2006-04-27

exEJIR wrote:
Shrewd wrote:Interesting to me that a group of people that are supposed to be knowledgeable financial professionals don't trust themselves enough to handle family money.
How long have you been in the biz?

My family members were my first clients (still are). I began managing/advising them 3 years ago. I can see the possible calamities, but my comment was aimed at those who appeared to lack confidence in their proficiency. If people don't trust themselves enough to handle family money, and would rather watch their familial assets poorly managed by someone possibly less qualified that's surely their choice. It's just difficult for me to rationalize it to myself. Maybe when I'm older and wiser my thoughts will change.

Shrewd's picture
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Joined: 2006-04-27

bankrep1 wrote:I said stay away until you have some experience.  Friends and family are fine but probably not where you should learn.  I don't think a rep should start on his own either (even though I did), they should be mentored or work as an asst for several years.
That makes perfect sense. If you were a surgeon you wouldn't want your first surgery to be on a family member.

D.H.K.'s picture
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Joined: 2005-02-27

I would add that it also depends on your age.  If you're under 40 years old, you're still a kid in your family.  You are still young, and won't be fully taken seriously.
If you're OVER 40, then you SHOULD be helping your family - and they should be more apt to help you.
Somebody will probably say that age shouldn't be an issue, but in families, it will be.  We can mess with these "shoulds & shouldn'ts" until the cows come home, but the fact of the matter is that AGE DOES MATTER.
FYI, I'm 28 and don't make any attempts to manage family assets (yet).

anonymous's picture
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Joined: 2005-09-29

I'm going to keep saying the same damn thing.  Take care of their insurance issues, don't wait!  Do whatever you want with the assets.
 

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