Clients can become dissatisfied for many reasons. They might be falling short of their return expectations, unhappy with the level of service you are providing or believe they are paying too much in fees.
While some clients have legitimate reasons for complaint, others are simply “difficult,” says David Andrews, portfolio consultant with Franklin Templeton Investments in Toronto.
Some clients, for example, might be going through a life-changing event, such as suddenly realizing they are nearing retirement and are unprepared. Difficult clients, on the other hand, are your typical complainers.
Whatever the reason for dissatisfaction, your role is to get to the cause of the discontent, because clients expect you to take care of them.
Here are four tips for dealing with dissatisfied clients:
1. Listen carefully
The best way to find the cause of your client’s dissatisfaction is through a face-to-face meeting. You should not make assumptions about why they might be unhappy.
“Give your client the opportunity to vent and express their concerns,” Andrews says.
Nadia David, communications consultant with Premier Communications in Mississauga, Ont., recommends that you show empathy and acknowledge your client’s feelings.
“Do not interrupt clients while they are blowing off steam,” David advises.
If you allow clients to “speak their mind” they will become easier to deal with and their dissatisfaction will become more manageable.
2. Revisit expectations
Performance is usually one of the main causes of client dissatisfaction.
Typically, says Andrews, your initial documentation such as the “know your client” questionnaire and investment policy statement, as well as other ongoing documentation, should have defined your client’s objectives and your role in meeting them.
The root cause of dissatisfaction, Andrews says, is not always about performance. “It could be that clients are not meeting their goals in life or that their goals are changing.”
In some instances, your client’s expectations of what you do — and do not do — as his or her financial advisor are unclear, David says. Either way, your role is to get to the bottom of their unhappiness through frank and open discussion.
3. Address causes of dissatisfaction
If performance is the cause of dissatisfaction, determine why the client’s portfolio underperformed.
“If it’s due to market conditions,” David says, “revisit your earlier conversations about market behaviour and how it affects performance. If you made poor recommendations, you should accept responsibility.”
You might have misunderstood your client’s risk tolerance or return expectations, says Andrews: “At all times, be honest and upfront to regain clients’ confidence.”
4. Get buy-in
“Set clear expectations to avoid future dissatisfaction,” David says.
Make sure clients buy in to any new arrangements you have come up with and that their expectations are clearly defined. Document any decisions you make, Andrews says. Train staff to spot early indications of client discontent, he adds.
If clients remain dissatisfied, David suggests, recommend that they find a new advisor.