Though the idea may sound blasphemous at a time when it is
difficult to get clients, the art of building an advisory business requires you
to identify not just the clients that you must acquire, but also the clients
who you must let go.
See why it is detrimental to your
business to have these clients…
client has unrealistic expectations
You are a financial planner, not a
wizard. Your customers should not have unrealistic expectations over what you
can actually deliver.
Returns can be made only over a time
horizon. Though you might strike it big with that occasional investment
decision, there is no way you can generate abnormally high returns.Many people
do not understand that if you have to reap the benefits of investment, you have
to be in it for the long haul. If it’s quick and easy money that a client
wants, see if you can educate him so that his/her expectations are more
realistic. You could show him a few case studies detailing how people have made
money have done so over a period by sticking to their investments. Normally,
people come around, appreciate the advisor’s viewpoint and stay invested.
You have to ensure that your clients
understand that your financial plan will take contingencies into account, but
it cannot be foolproof. There would be instances when an unexpected market development
might throw your plans off gear.
But a few clients might continue to have
unrealistic expectations over what you can deliver. If repeated convincing does
not change their viewpoint, it would be a better idea to part ways.
client does not value you, your time, and your efforts
You always make it a point to start your
meetings on time. But your client keeps you waiting—and this seems to keep
happening for almost every meeting. Or else, they are ‘high maintenance’
clients who take up too much time and energy without commensurate business.
These clients could for instance, call you up a number of times on the same
trivial issue, even after you have attended to the issue. At other times, they
treat you as an errand boy.
Not only is this behavior unprofessional,
your daily operations will also be affected.
With such clients, you must first
demonstrate the value that you add to their lives through your skills and time.
For instance, talk about your contribution to them and offer evidence. In spite
of this, if you feel that the message has not gone through, it may be better
for you to relook at your relationship.
client does not trust you
The advisor-client relationship is based
on trust. When you recommend a particular investment strategy, it is done
keeping the client’s best interests in mind. But if your client keeps raising
objections all the time about all your decisions, it will be impossible to do
business with him.
First, you must start with some
introspection about your style – are you too pushy, are you patiently
explaining the rationale behind each plan and investment recommendation, etc.
If required, make changes to your style so that the client has more faith in
However, if you feel that the trust
deficit continues despite your best efforts, it could be better for you to part
you have to part, make the process amicable
Nobody looks forward to a break-up. But
if you have to part, ensure that it is done in a professional manner. If
possible, discuss the issue politely but honestly.
If you would rather take a more
diplomatic approach, please inform your clients that after reviewing your book
of business, you have decided to focus on a smaller client base. Wherever
possible, offer to connect them with a few other advisors – while you might
have not been able to work out a successful relationship with a particular
client, but you may know a few advisors who would be able to do so.
In all cases, ensure that there is a
smooth transition period. So, even if you have to let go of a client, your
reputation should not suffer.
you ever given up on a client? Do let us know).