Part of creating a model practice and attracting quality clients is identifying the work you put into small accounts and difficult clients. The lower end of your client list can take up your time not to mention the liability issues. Clients with considerable assets who are rude, difficult to deal with, and who don’t take your advice are not worth your time and effort.
I know it’s difficult to imagine getting rid of these two client types when you initially think about it, but it’s absolutely necessary to avoid problems in the future.
Let’s say you keep a small account or the account of a troubled client, but you don’t know where the client’s other assets are invested or located. One day the client asks for “quick advice” on a financial matter that they say can’t wait. So you bend to their request. Could this result in you advising them to do something that could come back to bite you in the future? You bet!
This reminds me of a story a client relayed to me the other day.
The client and his wife maintain separate investment accounts and questioned the fees for a $1500.00 financial plan for the wife’s separate accounts at another financial institution. The wife stated that her broker at NAME OF LARGE WIREHOUSE offered to create her financial plan for free. My client said “Well you get a free toy in a Cracker Jack box but it’s practically worthless. Don’t you think you should question why the plan is free? Isn’t the old adage ‘You get what you pay for’ applicable here?”
The client went on and on about the cost grousing and complaining. My client tried an education approach by explaining that any financial plan drawn up by his firm would include factors and details almost certainly not covered by the large institution. In the end the married couple agreed to the cost of the plan. But I had to ask: What potential problems can you see coming down the road from this client? Given that this client is difficult, what are the implications?
Difficult clients almost always continue to cause problems. Part of working with ideal clients is enjoying your work. If a client causes stress, excessive time commitment, and work for your staff, it might be time to cut them loose.
My advice is to always take the high road and attempt to educate. When all else fails, let them go. You will free up time and resources while reducing stress. You are the entrepreneur in your practice. You get to decide who you do business with.