When saying “no” to an incompatible prospect, the discussion requires as much care as if you were talking to a client.
It’s not simply a matter of avoiding hurt feelings. Brushing off a prospect without a respectful discussion has the potential to hurt your business, according to Rosemary Smyth, a business coach and founder of Rosemary Smyth and Associates in Victoria.
“You don’t know who that prospect’s connections are, who their neighbours are,” she explains. “If the prospect has a bad experience, it can tarnish your reputation.”
This is especially the case if a well-meaning client referred this person to you. You don’t want to offend a client who feels that he or she was helping you with a referral, as well as a friend.
Here are three steps to respectfully reject a prospect:
1. Begin by talking about goals, not money
Don’t initiate the first conversation with a prospect by asking how much is available to invest. Start instead by chatting about the prospect’s problems and aspirations.
This is a gentler way to begin a discussion about suitability. Once you have established that knowledge, you can enquire about the amount of money the prospect is looking to invest.
You might find that the prospect actually fits your minimum requirement for assets under management but is looking for services that are not your specialty. For example, the prospect might be a lawyer who has plenty of initial funds but is looking for a stock picker. However, you prefer to work with young families who want help with long-term financial planning.
2. Be candid as to why the relationship won’t work
If the reason for rejecting the prospect is that he or she does not meet your investing minimum, you may be inclined to waffle in order to avoid the topic.
However, you should do the exact opposite, according to Smyth. By being straightforward, you maintain your integrity and your reputation.
3. Provide realistic alternatives
Those awkward conversations about declining to take on a prospect are easier if you can provide a referral to another advisor.
This is also why it’s a good idea to ask prospects about goals in addition to the amount of money they are able to invest. This information will give you an indication as to whether you have a colleague who can help.
You may also want to offer referrals to other professional resources, such as an accountant or lawyer. Maybe the prospect is new to the city and is still looking for a permanent residence. You can share the name of a trusted and experienced real estate agent, which will prevent the prospect from choosing among a multitude of unknown possibilities.