It may seem counter-intuitive but sometimes, to build a business, it’s best to let a client go.
“One unhappy client can make an entire career miserable,” says Keith Weber, certified financial planner and president of Weber Consulting Group LLC in Fort Collins, Colo. “It can ruin your credibility [and] your attitude. Even one bad client experience can literally affect you for years.”
Here are some of the red flags that indicate it might be time to suggest a client find another advisor:
> Unrealistic expectations
A client who places unrealistic demands on you for financial results is displaying a warning sign that he or she is too much for your business.
Some clients may become angry with you because you haven’t brought them the same earnings their friends claim to have gained, or because of things they’ve seen in the media, Weber says. Regardless of the size of the account those kinds of expectations are “just trouble waiting to happen.”
> Emotional attachment to money
Watch out for clients who place an unreasonable sentimental attachment to their money.
Sometimes when a client inherits funds from a loved one, the client may see that money as representing the relationship with that person, Weber says. Such a fixation can make the client difficult to work with and raise serious problems if some of the money is lost.
> Blaming you personally
You have no doubt explained to your clients that some things, such as market movements, are simply out of your control. Clients who don’t accept that fact may become troublesome.
Some clients will blame you personally for the results of the market, says Roger Tuttle, president of Tuttle Financial Advisors Inc. in Annapolis, Md. “That creates an adversarial relationship as opposed to an advisory relationship,” he says. “You can’t let your client put you in a position where you’re constantly playing defense.”
> Abusing your team
A client who bothers and harasses your team members is a problem not worth enduring.
“Your team — your staff, your organization — is the underpinning of your whole operation,” Tuttle says. ” You cannot let clients be abusive to your team members.”
That can lower morale, which can be reflected in your team’s dealings with all other clients.
> Demanding too much time
Watch out for clients who seem to drop by the office too frequently. They are probably taking up more of your time than they should, says Tuttle.
Whether that person’s demand on your time is hurting profitability depends on your business style and the size of his or her account.
But if it is a serious problem, you will sense that something is off, says Tuttle. “You know when a client is being a nuisance,” he says, “and it’s OK to get rid of clients who are.”
Tomorrow: How to lose a client you don’t want
IE