Stephen bishop used to lie awake at night, feeling sick about a high net-worth client — we’ll call him Bob — who treated him with contempt.

“You’d see the call display and you wouldn’t want to answer,” recalls Bishop, who was then a junior rep at ScotiaMcLeod Inc. in Kentville, N.S. “If I called his office and couldn’t get a hold of him, he’d complain that I didn’t contact him. It was awful. It obsessed me.”

That was 10 years ago, when Bishop was in his 20s. He didn’t know what to do about Bob. “He was ignorant,” says Bishop. “He made me feel as if I was his employee, his service provider — and nothing I did was good enough for him.”

Rude and abusive behaviour from a client is unacceptable, and no advisor should have to put up with it — no matter how lucrative the account, experts say. Further, no advisory practice can afford the financial and emotional drain imposed by an abusive client.

“There are different categories of problem clients, and there is the category that includes rude and abusive people. Frankly, I see little reason to be dealing with these individuals,” says Julie Littlechild, president of Toronto-based Advisor Impact Inc. Littlechild, whose firm conducts research in practice profitability, says the drain on morale will take its toll on a practice’s bottom line, albeit a toll that’s difficult to measure.

“The advisor shouldn’t want to deal with a client who is rude and abusive, even if it’s a very large client,” she says. “Ultimately, it’s not going to make people feel very good about their jobs if, no matter what they do, they’re getting negative feedback. That has to have a negative impact overall.”

And a demoralizing client can adversely affect the way the team deals with other clients. An unpleasant encounter with a problem client can spill over into your next conversation, says Joanne Ferguson, president of Advisor Pathways Inc. in Stratford, Ont. “The next person you speak to is going to hear that in your voice and wonder what’s wrong,” she says. “It’s a little bit of a snowball effect.”

Ferguson also warns that a client’s loudly expressed dissatisfaction could be a sign of compliance problems to come.

“If a client is always laying blame, is always being critical and negative — and you are going to keep him or her as a client — use your contact management system to record every conversation,” she recommends. “If the client has decided to go a different route from what you’re recommending, send a letter confirming that.”

Keeping accurate records will ensure that, should the client ever take you to court, you can verify all correspondence and contact, including all telephone conversations, to show that you were consistently tracking the relationship, she says.

In some cases, the client is rude only to the support staff, while the advisor, who may have less direct contact with the client, is profiting from the relationship. That’s not fair to the staff.

“I had an instance in which the associates felt that the advisor didn’t stick up for them, and was just saying, ‘He’s our client, a big client. You’re just going to have to take it’,” says Ferguson. That breeds resentment among the staff, who may feel as if the client and the advisor are ganging up on them.

“The advisor has to take the lead for him- or herself and for the team and say: ‘We don’t deal with people who treat us in this manner’,” Littlechild says.

The next step is a frank discussion with the client, which may resolve the problem. Ferguson has seen situations in which the relationship has turned around after such a discussion. “If a client is being a bit of a bully, he or she respects the fact that someone has actually brought it to his or her attention. The client now knows he or she can’t get away with it,” she says.

Such a discussion often reveals that the source of the rudeness and dissatisfaction is misdirected client expectations. This sheds light on what’s bothering the client and exactly what expectations — no matter how unrealistic — the advisor is failing to meet. Ferguson recommends laying out what’s expected of the advisor and the client in a written service agreement. It is preferable to prepare documentation — such as a service agreement, a letter of engagement and an investment policy statement — at the beginning of the relationship. If that has been done, now is a good time bring forward those documents. If not, now is the time to to do it — thereby keeping expectations in line.

@page_break@In some situations, both the advisor and the client are angry, Littlechild says: “The advisor thinks the client is demanding too much; the client thinks the advisor is not delivering. It really comes down to not understanding what the ‘deliverable’ is. And had they had that conversation earlier, it could well have prevented the problem.”

If the meeting with the client doesn’t solve anything, perhaps the problem is simply a personality conflict. Find out if there’s another advisor in the office who gets along with the client, and consider handing the client over to him or her.

Bishop says his problem with Bob was partly a personality mismatch. He confronted Bob and told him they could no longer work together, but passed Bob on to another advisor in the office. That advisor was able to put up with Bob’s abrasive attitude — for a time, anyway. Now Bob is on his third advisor, with whom he gets along quite well.

If you do decide to cut the client loose, don’t fire him or her in writing — you owe the client at least a phone call, Ferguson says. Be honest and tell the client why you choose not to deal with him or her. But you don’t have to be rude. You could even soften the blow by telling the client your personalities don’t match, and perhaps he or she would get along better with someone else.

“The best way to get rid of difficult clients is not to have them in the first place,” says Bishop, now an associate director and investment executive at ScotiaMcLeod. “You have to know what type of client you want and what type of personality you can deal with. Try to match clients to the people in your group.”

Bishop has no problem clients now, and he sleeps well at night, partly because he has a new strategy: “When I meet new clients, I interview them as much as they interview me.” IE