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Even if it's personal, I'd keep it professional in tone. Something along the lines of "I understand your goals and appreciate your thinking of me, but I worry that I'm not the best fit for you and you won't be happy in the long run. Since we are [family/friends/whatever your connection is], that's more important to me than managing your money." If you have a recommendation on who they should see, that might also cushion the blow but it's definitely not required, nor should you feel obligated to that.
Depending on the personal reason feel free to use that (I'm not working with you because our romantic relationship ended poorly seems legit to me). However, it is probably always best to use a professional reason.
My standby is that I don't think my business model fits into what they are looking for and I don't want them to resent me as I cannot provide services the way they want and deserve.
I had an ex reach out to me recently wanting to become a client...she’s kind of the “one that got away” but I told her I would take her on. We are both married now so I’m going to keep it professional. Had I said no I would have said I didn’t feel confident that what I do for my clients aligned with what she was looking for...
Can you overcome the personal reasons to further your practice? Evaluate if you should be turning business down. If you genuinely cannot move past whatever your personal conflict is you just have to be honest with the prospect.
Agree with upstream. I’m just starting out and not in a position to turn any business down so I took that into account even though I was really apprehensive at first. Everyone’s situation is different!