Nobody likes the idea of firing a client. It’s often counterintuitive. As an advisor, you spend a lot of your time prospecting for new clients, growing your business, and honing your niche. So, firing a client seems - well, just wrong.
Sometimes, though, this is a necessary part of doing business. There are many situations where it becomes necessary to part ways with a client. On the flip side, there are times when you may need to take a different approach to improve communication, or set better boundaries.
Knowing When it’s Time
There is no real way to know when it’s time to let a client go. There are, however, a few key indicators that something’s not right:
- When you cringe every time a meeting with them shows up on your calendar.
- If you feel uninterested (or uninvested) in the work you do for them.
- Any time a client is rude to your employees - that’s not okay.
- Some clients don’t do the homework you give them.
- Other clients outright challenge your advice - with regularity.
- If you’re constantly trying to justify your value to them.
These are all warning signs that you’re working with a client who isn’t a great fit for you. Unfortunately, no situation is the same. You need to unpack the emotions you’re feeling and the unpleasantness you experience with this client before deciding whether it’s a relationship worth saving.
Go With Your Gut
Sometimes, your instincts about a problem-client are spot on. That not-so-good feeling you get before you hop on the phone with them? It’s there for a reason. But, we also need to take a step back and be logical. Why are you feeling unfulfilled when working with this particular client?
Once you have your “why” - things will become more clear. If you don’t enjoy working with them because they constantly challenge you, you may be having a communication problem. Setting up clear boundaries and expectations for one another can often help to resolve this. However, if a client is regularly tearing you down or refusing to communicate concerns before they snowball into accusations, that’s a problem.
The one positive of this? You’re the boss of this situation. You don’t have to give clients permission to treat you poorly, because this is your business and your journey. If you don’t feel like the relationship is salvageable, it’s okay to part ways.
Working With “The Yeller”
Finances are a highly sensitive subject for a lot of people. You will find that some clients react more emotionally than others - that’s kind of par for the course in this industry. But if you have one client in particular who regularly raises their voice, acts out, uses derogatory terms, or is blatantly rude - that’s unacceptable.
It’s time to sit down with them and walk through why you’re not comfortable with their actions. If you feel like the two of you could still be a good fit if they shaped up, feel free to set a timeline in your own mind. If they haven’t fixed their negative behavior by then, you get to walk away. If they have changed their approach, it’s okay to continue working together. Just remember: you aren’t anybody’s doormat. If they can’t act like a professional adult, that’s not your fault.
Of course, how clients treat you is your decision. How they treat your employees or subordinates is another deciding factor altogether. As a team leader, you can’t tolerate a client who is rude to your employees. You need to stick up for your team and lay down some ground rules with a rude client who takes it out on your teammates.
When Value is a Question
To put it simply - you have value. That shouldn’t ever be a question, and if a client can’t see it, something is wrong. The problem may lie with them. Maybe they’re cheap, maybe they don’t understand what it is you’re doing for them, or maybe they just don’t appreciate the work you do. They could also have an overblown sense of self - where they think they’re capable of doing the planning work you do for them. While this is rarely the case (because they’re not the trained professional, you are), it does happen.
On the other hand, the problem might be yours. Are you effectively communicating your value? Do you actively show clients what you do for them, and why it’s so important? More importantly, are you setting realistic expectations? If a client doesn’t know what to anticipate when they start working with you, they’re more likely to use unruly benchmarks to judge your effectiveness by. Set clear goals, and even more clear expectations about what working together will look like. Be honest about what you hope to help them achieve, and reiterate that value proposition regularly.
Of course, regularly arguing your value with a client can get exhausting. If you feel like you’ve had an open and honest conversation about what you bring to the table, and what they feel like they want out of your working relationship, and it’s still not working - it’s time to move on. Who know’s - they may be better served with a few DIY tips and tricks. Or maybe they’ve “graduated” from your service offering. Either way, it’s okay to outgrow each other. Just be respectful. They may need you again in the future!
If You Changed Your Niche
I hear this often - I’ve decided I only want to work with doctors from here on out. I’m ready to fire all of my non-doctor clients. We promote having a niche so aggressively, that we often forget that it’s okay to not always live within that boundary. Of course, if you truly want to only work with doctors from now on, that’s okay! It’s your practice, run it the way you want. But start slow. Take on only-doctors as clients moving forward. Slowly evaluate your existing client base to see if they hold similar values or financial barriers that your new niche is facing.
If you no longer offer services they need, that’s okay. You can always refer them to someone who might be a better fit. But if you still love working with them, and you’re still providing value to their financial life, it’s okay to keep working together! You don’t have to abandon them just because they’re not a part of your niche.
If You Changed Your Fees
I find that fee increases are often another reason that people use to “fire” clients. First of all, I don’t want you to feel ashamed of increasing your fees. Studies have shown that many advisors underprice their services when they first start out because they’re nervous, or they don’t believe that people will pay them what they’re worth. So, if you want to raise your fees, know that you’re worth it. And congrats! That’s a huge step in a positive direction.
A fee increase will often weed folks out organically. Some people will fail to see the cost to benefit ratio, others just won’t have it in the budget. That’s okay. But be warned. This is not always the case. Let’s get introspective for a second - what is your reason for raising your fees? If your intent wasn’t to weed clients out, and you still find that you’re frustrated that Sally and Joe decided to pay your fee increase rather than self-selecting out, that’s a problem.
If you raise your fees and your undesirable clients don’t end their contract with you, you may need to try a more direct approach. A simple, “I think my style isn’t a great fit for you, and I want you to have the best planning experience you can.” Will often do the trick. Of course, have referral options to either other advisors or to find-an-advisor site like XY Planning Network or NAPFA.
Let’s Avoid This
If we’re being totally honest, firing clients isn’t fun. For you or for them. Before taking this big step, you should always evaluate your role in the client relationship first. Do they push your buttons for an irrational reason? What’s a better way of communicating with them and setting boundaries so this doesn’t happen? If you’re willing to critique your own approach and make adjustments, you may save the working relationship and you’ll both be happy campers.
In some cases, that won’t be possible, and you will part ways. To avoid this in the future, you need to improve your vetting process on the front-end. There is often a desperation around getting clients. Before walking into those prospect meetings, have a few ideas in mind. First, create a client avatar. Who is your ideal client?
Second, build a rubric for phone calls so you learn pertinent facts about a person beyond their financial life. This can involve their personality, investing style, trust level, and more! Of course, this doesn’t give you a free pass to discriminate on any level. Your “client avatar” should not discriminate against race, religion, or sexuality. That should be obvious, but I want to be abundantly clear.
Have you fired a client before? What was your reasoning? I’d love to start a discussion about this in the XY Planning Network VIP Facebook Community - I know that a lot of people struggle with it! Let’s help each other out!
About Arlene Moss, Executive Coach
Arlene gets a kick out of helping financial advisors get over being overwhelmed and take on their frustrations so their businesses soar. Arlene works to ensure XYPN members are able to help their clients prosper while creating a sustainable business model. Through XYPN Academy and one-on-one coaching, members get the support they need to grow their businesses and overcome the challenges that come their way.