My previous article, Clients Driving You Crazy? 10 Ways to Respond, clearly resonated with advisors.
Within 24 hours, I got three responses on dealing with challenging clients. Here’s what these advisors had to say:
In his first-quarter letter to investors of Greenlight Capital, David Einhorn lashed out at regulators. He claimed that the market is "fractured and possibly in the process of breaking completely." Q1 2021 hedge fund letters, conferences and more Einhorn claimed that many market participants and policymakers have effectively succeeded in "defunding the regulators." He pointed Read More
I am trying to part company with a new client who came as a referral, and he’s SUPER negative and ‘hates’ people (everyone including me and even himself). In 39 years I’ve never run across someone as cynical as him, so I view him as a potential liability risk – today anyone can sue anyone for anything. Any tips for gently moving him on?
One of my largest clients is extremely volatile. There are some meetings when he’s a pleasure to deal with, others where he ends up yelling at me for the performance of his portfolio. I’d hate to lose this client (among other things he’s referred a couple of friends who are also large accounts) but the stress of dealing with someone who is so up and down is taking a big toll on me and my assistant.
And the third response was on APViewpoint:
We are a boutique money manager and, in our practice, I would say I personally have the least tolerance for clients with annoying habits, largely because I am too busy. Aside from decreasing my workload to deal with being overcommitted, I've also found it useful to assign annoying clients to another portfolio manager. Different personalities may work better together, or just a fresh perspective can help.
In every case but one, reassignment has solved the problem; in the case of the one client where reassignment only frustrated the new manager as well, we are resigning entirely from the business. While client retention is important, so is peace of mind, AND the opportunity to free up time to generate new business to replace the clients you let go.
When is a client a liability risk?
There are two cases where you have no choice except to part company (and do it right away): when clients are a liability risk or when they are emotionally or verbally abusive to you or your team.
There are a number of factors that can make a client a liability risk. On the specific issue of potential lawsuits raised in the first email, the best indicator of the risk that a client will sue you is whether he has sued or threatened to sue other providers in the past – not just advisors, but tradespeople, vendors and other professionals. People operate in patterns. If there is no evidence of suing or threatening to sue other suppliers, even if a client has a negative outlook, the risk of a lawsuit may not be higher than for your typical client.
Read the full article here by Dan Richards, Advisor Perspectives