It is not an easy decision to make, but there comes a time in practically every financial advisor’s career when he or she must fire a client. Perhaps a client is no longer the right fit or does not follow your advice. Maybe he or she takes up too much of your time and resources to be profitable. It could be that the client is always complaining without just cause, or is simply rude.

Whatever the reason, an antagonistic client relationship can be draining, both financially and emotionally. You just cannot just hope the problem will go away — you have to take action.

> “Difficult to deal with”
“The No. 1 reason I fire clients is because they are rude and difficult to deal with,” says Craig Skauge, executive vice president of Olympia Financial Group Calgary.

“These clients give off more negative energy than positive energy and take up more time and resources than can be justified by the revenue they generate,” Skauge says. They typically have unrealistic expectations and are difficult to please. (Skauge is not referring to clients who take up your time with legitimate complaints.)

In some cases, you can justify spending more time with certain clients. They might be profitable, or valuable in some other ways, such as providing referrals. You can justify firing clients, Skauge says, “when they become more of a hassle than they are worth.”

> Change in focus
Over time, the focus of your practice might change. You might decide to deal only with clients of a certain asset level demographic group, or you might change your fee structure. As a result of this change, some of your existing clients might no longer fit your practice.

In such cases, parting ways with clients is a gentler, but still challenging, process because you might have a good relationship with them. But you have to be honest and straightforward in telling these clients that that your focus has changed and that you believe their interests would be better served by another advisor, whom you will help them find.

However, Skauge says, it might still be advisable to keep a profitable client who does not fit your new focus if you enjoy working with him or her.

> Irreconcilable differences
Every now and then advisors and clients may develop conflicts that cannot be resolved. For example, a client may repeatedly ignore your advice, putting the plan you developed for them at risk. In such cases, rather than let your differences fester, you should simply part ways with the client to avoid jeopardizing your own reputation as their advisor.

> Make a clean break
Skauge says firing clients should not be done over the phone or by email. “It must be face to face,” he says.

Simply tell the client that they should find another advisor. Make a clean break, Skauge says. The new advisor must take all the client’s assets so that you no longer have any dealings with them.

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