Best Practices for Letting Go of a Client
Saying goodbye to clients often seems counter-intuitive to new advisors, whose primary concern is to grow a customer base. But failing to ‘weed out’ unprofitable clients is a bad idea for any advisor’s business. To succeed in this industry, you need to spend your time servicing your most profitable relationships and this necessitates dropping unprofitable accounts from time to time.
There can be many reasons why certain clients are no longer a good fit for you. Perhaps you’ve identified a need to downsize your business because it’s become impossible to serve a multitude. Or maybe you’re working with clients who ignore your advice, are too needy or blame you for poor market performance.
Whatever the reasons your focus should be on providing great service to your most valuable clients – which means you need to let the others go. Preferably this should be enacted without hurting their feelings or leaving them so disgruntled they bad-mouth your practice to existing or future clients.
How to tell a client you can no longer work with them
It can be awkward having this discussion especially if it’s someone you’ve had a close connection with. So, keep things business-like. Aim to have a face to face discussion – or the phone if that seems applicable – but don’t use email because this could be seen as disrespectful.
One approach could be to tell your client that you’ve decided to take your business in a different direction and you feel your new business model won’t fit their needs. Perhaps you will be phasing out some services they require – or you intend to supply new services that they don’t require? However you choose to get the message across, your aim is to make your clients feel as if you’re doing something positive for them.
Make sure the client understands ‘it’s not you, it’s me’
Be positive and affirming. Make it clear that your decision has nothing to do with them. They are not undeserving. It’s simply your opinion that they should be with an advisor that makes a better fit for them. By switching advisors, they are ensuring that in the long run they’ll be happier.
Reiterate that you’re not abandoning them – in fact you’ve taken great pains to ensure you found them the best soft landing you can.
Don’t leave clients in the lurch
If it’s viable for you, offer to refer a client to another advisor and reassure them that the transition won’t be painful. Make sure the client knows what happens next and when so both you and the client can quickly move on. Naturally you’ll need to fulfill your obligations to them as well as assure them of your strict client confidentiality.
Breaking up is hard to do – but essential for your business
Breaking up can be hard to do and many advisors hang onto badly fitting clients for far too long. When it comes to letting go of clients try not to let emotions get in the way. Your business will only survive and prosper if you focus on retaining valuable clients.
And while it may be hard to fire a client, once you’ve had the conversation, you will sleep better at night. If you handle the end of the relationship tactfully then when you see them around – which you inevitably will – there won’t be undue awkwardness. And you may find the process empowering – leaving you with a good feeling about working with your best clients.
Good clients are a pleasure to work with and these are the clients most likely to give you referrals. Cutting out clients who cause you unnecessary stress, or who aren’t listening to your advice will leave you time to focus on clients who make work feel rewarding.
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