Take action when it’s time to fire a client

It’s hard enough to get clients in the first place, I hear you say… But sometimes relationships just don’t work out and it’s time to part ways. This arises relatively infrequently in personal relationships, and it also arises fairly rarely in adviser / client relationships. But just as it doesn’t make sense to stay in a bad marriage, it also doesn’t make sense to stay in a toxic or doomed adviser / client relationship…

 

Relationships can turn sour with clients

We’re not talking here about the odd grumble that a client may have. When markets take a bit of a dive, the natural reaction of a client is to get nervous. Some will have an open conversation with you about their concerns, others will stew silently, some might lash out a bit at you. There’s nothing wrong with any of these reactions – your skills as an adviser need to stretch to noticing client reactions, dealing with them accordingly and bringing your client’s attention back to what matters – their financial plan.

Instead we’re talking here about the client who is simply never happy – your service is too slow when it’s not, your charges are too high when they are in fact fair, their fund performance is not good enough when it’s not your fault and the client also doesn’t want to take any risk. If the client can find an opportunity to moan, they immediately take it. When your phone rings and your heart sinks when their number comes up – everyone knows the feeling.

Let the client go – fire him or her. A client who doesn’t recognise your value is no good for you or your business.

 

The time comes to break free

I was chatting today to an adviser that I really respect about a specific client of his. It’s about the tenth conversation we’ve had about the client, who is simply never happy. My adviser friend has jumped through hoops for him over the last few years – regular draining meetings and phone conversations, numerous excellent and time consuming reports, meetings arranged with providers, exceptional service at every turn. All the time having developed an innovative financial plan for the client, that is on course for delivery via a solid investment strategy. And all of this has been delivered for a very reasonable fee.  There has never been a word of thanks or even grudging positivity from the client.

The adviser has ploughed on as the annual fee, even though extremely reasonable is not insignificant. The adviser didn’t want to lose the fee… until recently, when the client started arguing over the fee level (again). The adviser told me today that, about 4 weeks ago he fired the client. He told the client he would not deal with him any more and would facilitate fully his move to another adviser or organisation of his choice.

The client took it badly, told the adviser he was going anyway and went off to talk to other advisers. The faraway hills were not greener – the client soon arrived back a bit sheepishly saying that he(!) had reconsidered and would stay on the existing fee. The adviser said he was no longer a client and wouldn’t be taken back.

 

Don’t look back

Yes the adviser misses the fee a bit. But the cost of that is far outweighed by the liberating impact that getting rid of the client has had, both for him personally and for his business. He knows his proposition is excellent, his fees are fair, his communication is excellent and his results for clients are as good as can be achieved. However this experience caused him to re-evaluate what he does and question that maybe the fault lay with him as the adviser and not the client.  Having done this exercise though, it re-confirmed to himself that his offering is excellent. He has more time for other clients, renewed confidence in what he offers and a certain pride that he stood up for his own principles. He doesn’t dread phone calls, and the slog associated with that particular client is gone. All of this is worth a lot more than a fee.

I’m not suggesting that the decision to fire a client is easy and should never be taken lightly. But do you have a client who is dragging you down, takes up too much time, keeps you awake at night, moans about you to others and makes you question yourself and what you do? Because if you do, you should consider whether they deserve a seat on your bus.

 

Every day you help your clients to live the life they want. Do yourself a favour and live the life you want – don’t suffer clients who don’t deserve you.

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  1. […] article in last month’s newsletter about when it’s time to fire a client drew a lot of attention! It proved to be a situation that many financial advisers have experienced. […]

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