“Coach’s Forum” is a place in which you can ask your questions, tell your stories or give your opinions on any aspect of practice management. For each column, George selects the most interesting and relevant comments from readers and offers his advice. Our objective is to build a community of people with a common interest in making their financial advisory practices as effective as possible.



> Handling An Irate Client

Advisor: We had an experience in our office one day last week that rattled me so much I couldn’t sleep. I’d welcome your input on how I could have handled it better.

It began with one of my best clients walking in, unannounced. He immediately erupted into an angry tirade about how incompetent we were, how we couldn’t get a simple request right; that it was his money, not ours; and so on.

I guessed that it had something to do with our meeting a week earlier, when he had requested a withdrawal of $100,000 from his account to help fund a commercial real estate purchase he was making. Something must have gone terribly wrong with his request to upset him.

I kept asking him to calm down and tell me what the problem was. Finally, he slammed the cheque he had received down on my desk. It was made out for $1,000 — not $100,000. Someone had made a big mistake. I didn’t know if it was me, my assistant or my firm’s head office. All I could say was: “Obviously, this is an error. I am very sorry it happened, and I’ll get to the bottom of it right away.”

That didn’t seem to satisfy him at all. In an increasingly threatening voice, he said that the deal was to close the next day and “getting to the bottom of it” wasn’t enough. He needed the money or else he would lose his deposit and he was going to hold me personally responsible for it. “Have you got an extra $50,000 lying around?” he practically shouted, “Because that’s what this is going to cost you!”

He said he was moving all his business somewhere else as soon as he could. Then he stormed out.

My assistant and I immediately reviewed everything we had done in making the withdrawal request and determined that it must have been a head-office error. Fortunately, the people at head office acknowledged their mistake without question and promised to courier a new cheque to us overnight.

I called my client right away but only got his voice mail, so I left a message saying the matter had been resolved and that I would personally deliver his cheque the next day at 9 a.m. Shortly afterward, I received a call from his assistant, saying she would come to our office to pick the cheque up; there was no need for me to see him.

I am not sure yet whether I am going to lose this client. I can rationalize that we handled the situation as well as possible, but I am not sure he sees it the same way. What could I have done differently?



Coach says: What an unpleasant experience for everyone involved! I am glad to hear, at the very least, that you were able to resolve the crisis so your client could proceed with his purchase. Clearly, however, damage has been done to your relationship. Hopefully, you can regain your client’s confidence before he actually moves his accounts elsewhere.

Service is a key part of our value proposition in the financial advisory business, and it is an unfortunate fact that despite our very best efforts, mistakes do happen and we will occasionally be called upon to deal with unhappy clients.

Knowing that doesn’t make it any easier, but knowing what to say and how to say it can often help us save the situation and, if done well, can actually allow us to end up with an even better client relationship than we had before.

Here are some steps to help your clients feel better in situations like this:

> Start With The Attitude That The Client Is Right. I don’t agree with the familiar statement that the “client is always right,” but I do think we have to start with that assumption. Until you are able to assess all the facts, you have to set aside any feelings you might have that the situation isn’t your fault, that your client is poorly informed or that he or she is being unreasonable.@page_break@All that matters is that your client is upset, and it’s up to you to solve the problem.

> Listen To What Your Client Is Saying — and to what he or she is really trying to tell you. Sometimes the thing being complained about isn’t the real issue. It is the consequences that matter. In the situation described above, for example, it is quite likely the client would have accepted the mistake under different circumstances, assuming it could be corrected in a reasonable time. The real concern was the risk to his real estate deal, not that someone had made a data-entry error.

Clients with serious complaints need to feel they are being heard. So, allow them to sound off a bit before you react. Your role is to listen “actively” — by giving your full attention and seeking clarification of facts. Avoid jumping to conclusions and trying to solve the situation right away.

Start with a non-judgmental suggestion — such as: “Let’s go over what happened” — to put yourself and your client on the same side of the problem rather than being adversaries. This step will dampen the emotions aroused by the incident and give your client more confidence that the complaint will be resolved.

> Confirm Your Understanding Of The Problem. Once your client has been able to tell his or her story, repeat those concerns back to your client to show that you understood what has been said and that you can appreciate your client’s position.

Be calm and objective. You might say something like: “As I understand it, you are, quite rightly, upset because we made a serious mistake with your cheque. You require the funds to finalize your real estate deal tomorrow. And if you do not close on time, you will forfeit your $50,000 deposit — not to mention the risk of losing out on a property you wanted.”

Repeating the problem shows that you were listening, and it will help lower your client’s stress. More important, it ensures that you and your client agree on the problem that must be solved.

> Show Your Empathy For Your Client And Apologize. Once you’ve shown that you understand the facts, show your client that you understand his or her feelings as well. For example, you could say: “If I were in your shoes, I would be extremely annoyed as well. I’m very sorry that we made a mistake with your cheque, especially since having the full $100,000 on hand tomorrow is critical to you closing an important real estate deal.”

> Present A Solution. If you know how to solve the problem, describe the immediate action you will take. For example: “I am going to call our head office right now and arrange for them to courier a new cheque to us overnight. You will have it by 9 a.m. tomorrow. Will that allow you to close your deal on time?”

If you’re not sure of the solution, describe what you will do in your efforts to find a resolution. You might say: “I need to make a few telephone calls right away, and I will report back to you within an hour. Would that be all right?”

If your client doesn’t agree with your proposal, ask what alternatives he or she might have. For instance, you could say: “If my solution doesn’t work for you, tell me what will make you happy. If it’s in my power I’ll get it done; if it’s not possible, we can work on another solution together.”

> Take Action And Follow Up. Once you’ve agreed on a solution, act immediately. Keep your client informed of your progress. Follow up a day or so later to make sure your client is satisfied with the resolution and, if appropriate, offer a small token of appreciation for his or her patience and understanding, such as a gift certificate, flowers or a bottle of wine.

> Learn From The Experience. Reduce the risk of the situation happening again by identifying how the problem arose in the first place and what can be done to prevent a recurrence. IE



George Hartman is president and CEO of Market Logics Inc. and a senior coach and facilitator with the Covenant Group. Send questions, comments and opinions on any aspect of practice management to george@marketlogics.ca.