They may bring in the money, but are strength-draining, demand-making clients worth the time and effort?
“You don’t want the energy vampires and we all know what those are – people who suck everything out of you all the time,” said Grant Gold, a partner at Toronto-based Ricketts Harris LLP, practising in the area of family law.
Gold told the Financial Planning Standards Council’s annual CFP professional symposium in November, that prospective clients should meet at least two of three criteria: they should be interesting and their issue should be challenging; you should enjoy working with them and they should make you money.
But there are times in every professional’s career when they reach a point with a client when nothing seems to work and it’s not worth the income they bring in to the firm, said Gold.
“Maybe you didn’t get them all the things they wanted; maybe they’re unrealistic; maybe you’re just tired of them as a client and you know you’re not giving them your best. So move them forward to somebody else.”
Do a cost analysis
He suggested to the financial planners that they do a little cost analysis by figuring out exactly how much they get from this client after paying staff, taxes and other costs. If it’s not worth the grief, it’s time to tell them the relationship is over.
“Give up Starbucks for a couple of weeks and you’re ahead,” he said. “I know we get sucked in – I get sucked in.”
Another signal that you may want to fire a client occurs if he or she asks you to compromise your ethics. A good reputation is paramount in both law and financial services, and anyone who asks you to do something that could potentially sully your good name should not be considered a client, he said.
Gold also suggested that clients who have no value for your work-life balance, constantly emailing or calling at all hours of the day and night and on weekends, may need to go on the chopping block. “If a client has no respect for your work-life balance … if they’re making you crazy because your email is dinging every three minutes, maybe you need to get rid of the client.”
Gold said non-responsive clients can be troublesome because they tend to take up a big part of your workload but aren’t available for any follow ups. Often, a professional works hard to find some information for the client, only for them not to return an email or phone call with a decision. If after the third time you have contacted them they have still not responded, it may be a warning sign that this client is not for you.
Clients who complain about their financial plan may have valid concerns, but Gold said sometimes they’re just symptoms of a difficult client and may be a sign that more trouble awaits you. There are many instances when clients are not happy with their previous family lawyer and they switch to new counsel – a situation that is understandable if it happens once or even twice. But if a prospective client tells Gold that they’ve already been through a few lawyers, he sees it as a warning sign that the problem probably has more to do with the client than the lawyers and should not even be taken on as a client.
Gold recommended financial planners ask potential clients about their expectations of what the advisor can do for them at the outset. It could be that those hopes aren’t realistic or the time frames aren’t reasonable, so before taking them on, financial planners need to sit down and have a serious discussion with the investor or it could lead to potential trouble down the road.
But if the inevitable happens and you have to fire a client, do it in writing, said Gold. Suggest to the client that he may benefit from a more objective view of the strategy, or require a second opinion. And then recommend three other CFPs they may want to contact.