Every advisor has a few favorite clients — those who share your outlook on finances, require a reasonable amount of contact, get along well with your staff and are on the same wavelength when it comes to communication. But not all clients are ideal.
In fact, some can have traits that are downright annoying. “Everyone has experience with them,” says Shannon Waller, coach and program designer with Strategic Coach Inc. in Toronto. It’s not that these clients are malicious. It’s just that their personalities may not lend themselves to a productive advisor/client relationship.
So, here are some of the most common counter-productive behaviours of clients — and what you can do to prevent them, or minimize their damage:
1. Needing high maintenance
“Hand-holders,” according to Waller, seem to need constant contact, expecting market updates even when they don’t really play the market, for example. Because they take up so much of your time and that of your staff, Waller suggest doing a cost-benefit analysis to determine whether it makes sense to put up with their neediness.
“If you charge enough to make it worth your while, great,” she says, “but you’d better be prepared to reward your staff with danger pay.”
2. Going DIY
Clients who go DIY take up your time seeking out informed advice only to turn around and do it on their own, says George Hartman, CEO of Market Logics Inc. in Toronto. He knows at least one individual with a significant amount of money who “interviewed” a number of advisors and essentially took the free advice and ran.
Be aware of the existence of such clients when interviewing prospects, and remember that most clients are ethical. Try not to give too much detailed advice before a prospect has joined you. If you do get dinged by a DIY, consider it part of the cost of doing business.
3. Keeping secrets
Almost as insidious as the DIY client are those clients who claim to be sharing everything with you while withholding pertinent information, such as debt or even investments with other professionals. This trait is especially galling to the advisor who creates a financial plan for the client, he adds, as these hidden gems, once discovered, can make a plan moot.
Tell clients up front that your advice is based on full disclosure.
4. Chronic complaining
We all know people who are forever dissatisfied with just about everything. Some may be harmless complainers you can handle, Waller says, but others can poison a practice. “They never appreciate what you do for them and they complain a lot,” she says. If their complaints could reach the ears of other clients — or potential clients — it might be best to let them go.
Issue a gracious “we’re not able to take care of you to the degree you expect” letter before their word wreaks havoc on your reputation.
5. Acting on impulse
A lot of damage can be done by an undisciplined client in the months between face-to-face meetings, Hartman says. They might reallocate assets in a way that doesn’t line up with their investment profile, or withdraw funds without informing the advisor. This, Hartman says, is where solid client profiling is key.
To prevent this type of client behaviour, find out as much as you can about your clients and determine how likely they are to follow your advice.
IE