Are You Good at Dealing with Difficult Clients?

Difficult clients are not unique. Every Advisor has encountered or will encounter obstreperous personalities. There are many reasons why clients become difficult. Let’s make this easy and say we are dealing with a personality clash. A decision has to be made: keep him or fire him. Let’s explore both choices.

Listen to the audio or read the transcript below to see how Don explores both options.

Firing a client is difficult if you don’t like confrontation or hurting someone’s feelings.

It’s not an easy thing to do, no matter how tumultuous the relationship. This is not an article on suggested procedure. Proper procedure is firm-by-firm.

The first step, of course, is to find out your firm’s policies and procedures for terminating a relationship with a client. Your firm will most likely be good with the idea as long as you follow protocol and fire a client for cause. I think everyone’s goal will be and should be to provide a soft landing for the client. What we all want is for the fired client to go calmly and quietly into the night.

Let’s talk about breaking the news to Mr. Grumpy. You have decided that the relationship cannot go on. It is affecting you psychically and mentally. Every phone call and every meeting fills you with dread. Your decision is final.

I have learned from experience that when you fire someone, you must let that person know right up front that you have made a decision and that decision is final.

You will be glad to discuss your decision, but you are not going to change your mind. No matter how rocky the relationship may be, or in how little esteem he seems to hold you, he will try to talk you out of it. Nobody likes to be kicked out of the club.

I prefer to keep things as simple as possible. What worked for me without fail was simply saying to the client, “You need a level of service I can’t provide.” Be prepared to back that statement up. You can offer to find him or her someone else who will be a better fit. That’s up to you.

Let’s say this tough-to-deal-with guy is your uncle and you can’t fire him.

He might be verbally abusive to you or your staff. He might expect an unreasonable amount of time and attention. He might be an arguer. No matter the cause of consternation, he’s blood. Now what?

You are the business owner and you set the rules.

Rule number one is that you are running a for-profit business.

Rule number two is that you must tend to all your clients and your time is precious.

Rule number three is that you must have a client’s full cooperation in order for your recommendations to be realized. Clients must be all in and enthusiastic.

When you rid yourself of a bad client, you are losing nothing and you are gaining a lot.

Growing a business is like growing a rose brush. Pruning a rose bush is essential for the good health and continued growth of the bush. You need to shape the rose bush, trim the dead buds and encourage new growth. It is, in other words, counter-intuitive.

Keep your ideal clients, trim away the dead wood and make a calculated guess about the clients in the middle. Do it well enough and long enough and you will end up with a perfectly healthy book full of clients.

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  • Don is right on target with his comments! While I never like to fire a client, it is absolutely necessary from time to time.

    • Thanks for sharing your thoughts with us, David – nobody likes to fire a client (i think), but it’s inevitable…

      Finding the right clients and getting rid of the unsuitable ones is similar to hiring the right team members and firing the not-so-good fits, don’t you think?

      Looking forward to your next guest post here 😀

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