Removing “C” and “D” clients from your book of business is critical to running an efficient, profitable practice. Low-value clients can cost you time and money while preventing you from providing your best service to your top clients. Further, a client who is low-value to you is a bad fit and could be receiving more appropriate service from another advisor.

Maintaining clients who do not fit your practice can also harm your professional image, says George Hartman, CEO of Market Logics Inc. in Toronto.

In many ways, ending a relationship with a “C” or “D” client, particularly one you have known for many years, is similar to letting go of an employee, says Hartman. It’s important to be understanding and firm without coming across as cruel.

Here are few tips for how to gracefully part ways with your ‘C’ and ‘D’ clients:

1. Explain it in writing
The best method to inform clients of your plans to let them go is through a written letter.

To make best use of your time and resources, send your “C” and “D” clients a letter by email or regular mail, says Hartman. The letter should explain changes to your practice and why the client would be better served by another relationship.

2. Give proper notice
Provide your clients plenty of time to adjust to the news, Hartman says.

Let them know of your plans at least three months in advance of the time you plan to remove them from your book of business, he says. That way they can get used to the news and make any necessary plans.

3. Be firm and proactive
Once you’ve made the decision to remove certain clients from your business, stick to it.

When informing clients about the change in your practice, be firm. Don’t open yourself up to long debates, says Hartman. Treat the decision as final.

Be careful, however, not to be seen as cold or insensitive, he adds.

Also, avoid the common mistake of ignoring clients, hoping they’ll decide to leave on their own. This passive approach can lead to two problems: one, it can make you look unprofessional; and two, the client might not leave.

4. Give recommendations
Be sure to offer the exiting clients a referral to another advisor.

Always offer an alternative, says Hartman. You can either recommend the clients to another advisor at your firm or simply let them know that you are willing to offer a recommendation if they require one.

IE