Client relationships that endure over time can be personally rewarding. But it may not always make sense to hold on to clients for the sake of preserving those bonds or keeping your book intact. Sometimes you and a client may find that your needs and priorities no longer align.
While it may not be the most pleasant discussion, clients deserve the courtesy of an in-person conversation about why you think it’s time to part ways, says Evan Thompson, business coach and founder of Evan Thompson and Associates in Toronto.
Thompson offers advice to help you decide when — and how — to let a client go:
> Shift in priorities
It’s natural for your business model to evolve and, as your business changes, so does the type of clients you focus on serving. Your firm or practice may have set a new minimum asset threshold, or you might have decided to refine your target market.
Regardless of what triggered the shift, Thompson says, you need to be honest with your clients about why the relationship is no longer a suitable fit. For example, you might have to ramp up efforts to attract new clients, and won’t be able to devote enough time to their account.
Make a point of assuring your clients that you can help with the transition. “The last thing you want to do,” Thompson says, “is to make the client feel like you’re abandoning them.”
If you sever the relationship on good terms, you can offer to connect the client to another advisor, says Thompson, or give them insight into what to look for in a new advisor.
> Red flags become frequent
There are only so many allowances you can make before a client becomes a nuisance to deal with. Someone who neglects to fulfill his or her responsibilities as a client — showing up late for meetings and failing to file paperwork —may not be worth your time.
“If you sense from the outset that they don’t value you and your team’s time, you’re in trouble,” Thompson says.
It’s also important to be mindful of how a client treats your staff. For example, consider it a red flag if they refuse to work with junior team members, because that would make it difficult for you to delegate responsibilities, Thompson says.
Before even signing a client on, Thompson suggests, meet the prospect over a meal to see how they relate with the wait staff: “I can tell what treatment I’m line for.”
> Complex needs
Many advisors overextend themselves playing the role of money manager and personal counsellor to please their clients, Thompson says.
If you find yourself caught in a “juggling act,” counselling clients on personal issues that are out of your area of expertise while managing their portfolio, you may need to address the situation by enforcing boundaries or letting the client go.
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