How to Work With Prospects Who Have Little to Invest

Last week I spoke about working with people who have no assets and bringing them on as a client. To catch up with that, click on the link below, and you’ll hear what I said then.

Today we’re talking about working with these people, but setting boundaries. We had several of these people whom we worked with in our RIA, and here’s how we did it.

We set a number of people whom we were going to bring on and work with on a pro bono basis. So our number was eight clients, and that was it. That’s all we worked with. If we were up to six, we had space for two more. If we had eight, we had no more room to bring these people on. We set a number because when we saw a person who genuinely needed our help and would benefit from our help, we wanted to feel OK about saying no to them.

That’s hard to do. I work and speak with advisors all the time who have great hearts, who have wonderful natures, and who genuinely want to help, but just don’t have the capacity to keep giving away pro bono work. So we set our number at eight. When a person transitioned out of those eight, be it for poor behavior, or maybe something happened — they had a liquidity event, they inherited money — and they became a regular fee-based client for us, then we would have space for one more. So when the next person came along who we could help like this, we brought them on board with us.

But there were set guidelines and boundaries that they had to follow. If there was a debt situation, and they showed no signs of wanting to get their credit card purchases under control, they either gave us their credit cards, destroyed them themselves in front of us, or they weren’t going to come on board with us. If it was a situation where they were lending money continually to children who had an issue going on in the background and they had no way of controlling themselves in doing that, they either followed our guidelines and our instructions, or, if they were continually still giving money away, we wouldn’t bring them on, or if we had bought them on, we would let them go as somebody whom we were working with. So the guidelines were very clear. We also made it clear whom they were going to work with and set out the parameters around how much time they were going to be involved directly with us.

Often with these cases, you’re dealing with basic budgeting stuff to begin with. This is a great opportunity if you have a new advisor or a younger advisor who is gaining experience with your firm to have them work with these people on some basics around budgeting and some basics around general fiscal management. It also shows that new employee or that younger advisor that people are important; regardless of the AUM balance they have, they count. Relative to their finances, if they’re prepared to be disciplined, and try and get themselves out of a hole, and take your advice seriously, they’re somebody that you’re prepared to work with.

So when you’re considering bringing on several new people from a pro bono perspective,

  1. Have a very clear number you’re going to work with. That means once you hit that number, that’s it. If you have another person ask you, you can turn them down but not feel bad for doing that.
  2. They have to follow your instructions. They have to follow and adhere to exactly what it is you tell him to do to the letter, and the moment they don’t, you move them on.
  3. Once you’ve moved them on, then talk with your team and reevaluate what you’re providing these people. See if [your team is] ready to bring on another hardship case that you can then educate, that you can then help and provide them with knowledge and insights into how it is they really should be looking after themselves from a fiscal perspective.

It’s a great way to help people. It has you providing pro bono work and making a true impact in people’s lives.

Related: What to Do With an Ideal Prospect With Little to Invest?