It happens all too often.
Ah, the holiday season. A time for food and drink, holiday parties and family dinners attended by many -- including your mother's cousin Gary, who's making a name for himself in the Midwest as a pretty decent financial advisor. You only see Cousin Gary once a year, so why not hit him up over the hors d'oeuvres for a free stock tip, right? Think again.
Don't be that person.
In general, it's inappropriate to ask a financial advisor for specific recommendations during a social setting, says Lydia Ramsey, a business etiquette advisor based in Savannah, Georgia. Usually, she says, people blunder into a faux pas in an awkward attempt to ask about the advisor's career. To be on the safe side, Ramsey recommends neutral questions about the advisor's job or even to tee up an office appointment. "But do not go in and ask for free advice," she says.
Change the conversation.
Guests usually ask questions because they are curious about investments they've been reading or hearing about. That's why seasoned advisors have standard comebacks to frequently asked questions. Here's one from Cary Guffey, a PNC certified financial planner in Birmingham, Alabama: "'How much money are you willing to lose?' That changes the conversation from 'Is this an easy way to make money?' to 'Is this an easy way to lose money?'"
Keep it confidential.
Many advisors deflect by suggesting a formal, confidential office visit. Margaret Starner, senior vice president of financial planning at Raymond James in Coral Gables, Florida, says nagging financial worries often surface in a social setting. Asking for advice is less of an ambush, she says, than an indicator that someone is worried.
Don't be a mystery salad.
That's how Guffey responds when relatives look for free advice over Thanksgiving. Carey usually segues to his standard response -- "How does the investment fit into your plan?" -- by using a mystery salad as a metaphor. "I walk over to the pink stuff and say, 'Do you want to be first to try it?' You might luck out, and it could be Cool Whip and cherries. Or it could be beets and mayonnaise. The question is: What do you know about it?"
'Just give me your best tip.'
Advisors often find themselves on the receiving end of some real turkeys. "Just give me your best stock tip," is a demand Joe Heider, founder of Cirrus Wealth Management in Cleveland, hates to hear. "I say, 'If I knew that there was one best stock, we'd be holding this party on my 300-foot yacht in the Mediterranean.'"
Dinner is not a time to go fishing.
Heider's next least-favorite question: "How would you like to get your clients in on my great startup?" Well, that's a problem with "all kind of bad regulatory implications," Heider says. Not to mention that anyone trolling a holiday gathering for investors might not be the most sophisticated entrepreneur.
You may not get the answer you want.
David Peterson, managing director of the Denver office of United Capital, says that at a recent law school reunion, he was popular for his take on gold as an investment. Problem is, he's not a goldbug. "If you buy a stock, it's producing earnings. If you buy a bond, it's got interest. Gold just sits there. The value is what people put on it," he says.
Expect a noncommittal response, at best.
Starner says that if people are simply looking to discuss financial headlines, she often serves a noncommittal response, such as "I'll have to look into that." But if the guest is wrestling with a sticky problem, Starner says she offers to set up a time to discuss it. "It gives people hope that they can manage it," she says.
You can recover from your faux pas.
What if you realize you're getting the standard deflections from an advisor you're chatting up? Back off graciously by doing a little deflecting of your own. "Say, 'I'm sorry, you probably don't want to talk business. I apologize,'" Ramsey says. Then segue to a question about general economic trends. And if you know you'll be at a gathering with professionals whose brains you'd love to pick, bone up first on financial news so you can avoid interrogating and keep the conversation light.
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