Clients come in all types. Some come to you looking for portfolio management, others emphasize retirement planning, and many seek both. Still others simply want someone to hold their hand while they wend their way through life’s tribulations.

Advisors must learn to adapt to varying client needs and personalities. Sometimes it doesn’t work out, though the struggles are not always in vain.

A few veteran advisors spoke to Financial Advisor about these past struggles, weighing in on how their most difficult clients taught them important lessons and ultimately made them better at their work.

Lessons Learned
Eric Ludwig, the CEO of Stockbridge Private Wealth Management in Sun Prairie, Wis., and co-director of the American College of Financial Services’ Center for Retirement Income, recalled one client from the early days of his career who took him for a wild ride.

Ludwig had just set out to co-found his own RIA practice after seven years at a large bank. “I tried to protect myself by discreetly gauging whether my largest client might consider moving with me,” he explained.

Unfortunately, the client decided to stay with the bank, ostensibly to take advantage of its fee discount for loyal customers.

“I remember feeling totally heartbroken,” said Ludwig.

Despite the disappointment, though, he kept “the communication channels open” with this ex-client. Two months later, his new firm proved profitable. So, with renewed confidence, Ludwig managed to arrange a meeting with the former client.

That changed everything.

“It was a combination of my newfound self-assurance and my conviction in the better service we provided that ultimately swayed the client [to change their mind] and come over to us,” he said. “He recognized the value we brought.”

In the years since, that client became one of Ludwig’s closest friends. Ultimately, when the client was diagnosed with pancreatic cancer, he called Ludwig right away. “He entrusted me with his financial legacy, saying, ‘It’s in your hands now,’” he remembered. “Such moments underscore the deeper essence of our profession. It’s more than financial planning; it’s about forging enduring relationships.”

Looking back, he said, he realized the experience reshaped his perspective. This client, who was once his most challenging account, became something much more important and profound.

“This journey taught me the significance of viewing client relationships beyond immediate outcomes,” he said. “It taught me the power of patience and perseverance, and the unexpected ways professional relationships can evolve into personal bonds.”

Sometimes You Can’t Win
Unexpected outcomes from challenging clients don’t always work out so well. Tom Henske, a financial advisor in New York City, shared the tale of one client who was “beyond difficult,” he said.

At every annual review, the client insisted on looking at the best-performing asset in his portfolio as the benchmark by which all others were measured, leading him to ask Henske repeatedly why nothing else had performed as well.

“He had a diversified portfolio based on his risk tolerance and time horizon, but he kept comparing each asset to the top performer, as if that one were the standard,” Henske recalled. “No matter what, he was never happy. It became clear that we were never going to get a pat on the back from him.”

The entire staff was becoming annoyed with this impossible-to-please client.

“I quickly saw that if we didn’t end the relationship, I was going to have some seriously unhappy employees on my hands,” said Henske.

So he arranged a private meeting with the client, at which he planned to politely fire him. In preparation, Henske practiced with his staff, engaging in role-playing exercises. The team also put together a complete case history on the client and the performance of his portfolio, as backup evidence of fair treatment.

When the day finally arrived, Henske launched into the “go our separate ways” speech he had rehearsed: “The things you are looking for in a financial advisor are not the things that our particular firm is good at,” he said. “It’s in your best interests to go elsewhere.”

It went off perfectly! But, to Henske’s shocked amazement, the client didn’t get the message. In fact, he refused to listen. “No, I’m very happy with you guys, and I don’t want to go anywhere else,” Henske vividly remembered him saying.

When they found out, Henske’s team was more than disappointed. They were downright annoyed.

So, a year later, Henske tried again. This time, the client finally did agree to leave.

But that’s not the end of the story. “He continued to call me for another two years,” said Henske, “just to double-check the advice he was getting from his new advisor.”

With some clients, there is simply no way to win.

When It’s Better To Cut Your Losses
Another example of how it can be better to cut your losses comes from Harold Evensky of Evensky & Katz/Foldes in Miami and Lubbock, Texas.

“My most difficult client was a couple who came in not long after the tech crash,” he recounted. “They were retired and dressed like they had just come out of a GQ makeover.”

Their clothes were expensive—tailored suits that fit to a T, he said. The man was wearing an ascot. Yet they were “beside themselves and panicked about their financial situation,” Evensky said.

They and many of their country club friends had invested heavily in hot tech stocks, believing them to be the “pot of gold at the end of the rainbow.” But when the tech bubble burst, the couple had lost more than half of their savings.

Their dismay was certainly understandable.

“With tears in their eyes, they said they had cut their expenses to the bone,” said Evensky. Then he added, with a slight smirk, “The only things remaining were their club dues, golf fees and car leases.”

Still, they were his clients and they were in distress. So Evensky compiled a comprehensive financial plan that incorporated their new reality. They could afford a lifestyle that was “just over half of what they considered their minimum,” he determined.

Telling them this, however, was not easy.

“They did not accept my analysis,” he recalled. “They said, ‘But we need to earn more!’ I tried to explain as tactfully as I could that the market didn’t give a damn what they needed. They were in massive denial.”

Finally, in frustration, he offered to refer the couple to “a broker who would tell them what they wanted to hear.” And that was the end of the advisory relationship.

Evensky’s conclusion: “The moral is, sometimes you just need to walk away.”