Advisors might not like to admit it, but nightmare clients are an unfortunate reality.
Some clients just won't click with your style. And nothing you do seems to help the situation.
When is it time to go your separate ways? And how can you "fire" a difficult client without jeopardizing your professional standing?
"A difficult client can come in many different degrees," said Joe Heider, president of Cirrus Wealth Management, in Cleveland, Ohio. "Assuming that the advisor has properly created expectations, when that client begins to break those expectations or creates new ones, that’s generally the first warning sign."
When that happens, he continued, it's prudent to "revisit the expectations on both parts." The client may be expecting something from you that you're not prepared to deliver. Or it could be something else. Talking about misunderstandings can help clear the air. "Address very honestly the issues with the relationship," he said. "Find out what the cause [of the discord] is." If necessary, Heider added, it may be best to "suggest to that client that he or she would be better served with another advisor -- and that you can assist in that move."
Of course, that news might not go over so well. In the worst cases, you might not even be able to get far enough to make that suggestion. "The last straw is when the client becomes verbally abusive to staff," said Heider.
If that happens, you need to address the client promptly. "The worst thing to do is avoid the problem and hope it goes away," he said.
However difficult, a conversation about expectations (and disappointments) could reveal that the client was simply having a bad day. It could be just a fluke, or something else you can live with. Or it could be a sign of a more serious issue.
In the end, deciding the nature of the unhappiness and how best to handle it comes down to a judgment call. Heider noted that sometimes it's just a matter of a bad fit. He recalled one client who phoned several times a week to make changes to his portfolio, especially during market volatility.
"I had to explain to him that that's just not the way we work," said Heider, "and that's not the best way to get results in the financial market."