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Did you know that your financial advisor can “fire” you as a client? Here are 6 times they should

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Firing someone is never easy. Fortunately, I have never had to fire a client in my CFP® career, but my colleagues and the companies where I worked had to make this difficult decision.

Our goal as financial advisors is usually to grow our client base, not reduce it, so abandoning clients seems counterintuitive. But there are times when it’s the right thing to do, and sometimes it’s what’s best for the advisor and the client.

Below, I discuss six scenarios and circumstances under which I think a financial advisor should terminate a client.

Suppose a client is constantly doing their own research online and enjoying the benefits of their business that come with financial planning. But then the customer expects you to listen to what they find for confirmation – without rewarding you for your time and advice. Until then, the existing assets you manage don’t make up for the extra time the customer is looking for.

As a CFP, we operate in a highly regulated and constantly evolving industry. This includes how businesses make money. My current business, for example, takes commissions, fees for the assets we manage, or hourly bills for financial advice.

It is important that financial advisors remember that our advice is a key part of the job and that the interaction with the client must be taken into account. Disclosure of charges is also essential, so that the customer knows exactly what services are being charged.

Our mission should not be to offer free advice and confirmation to a client trying to act as their own advisor.

Availability is important with advisors and clients. If a client is regularly unavailable for meetings or is unable to provide you with the information necessary to be able to provide an appropriate analysis, it may be best to separate from that client.

Some advisors may disagree with this point, but if clients aren’t able to be respectful to employees, it’s a breakup for me.

That said, firing a client should be a last resort. I think the best solution to dealing with an unruly or disrespectful customer is to discuss it with your colleagues and the general manager. Approach the matter diplomatically, get feedback and feedback from your staff, and try to form an action plan to remedy the situation. Maybe it’s a conversation between the client and your general manager. Maybe moving the client to another advisor will help.

Of course, there is no one-size-fits-all solution. The aim is to create a great work culture and environment. If a particular client contributes to a toxic workplace, it may be best to go their separate ways. And that can end up being the best thing for all parties involved.

There may be situations where a client’s finances demonstrate immoral or unethical practices. At the end of the day, we all want to sleep well at night.

While I don’t have a personal example of a client firing for unscrupulous behavior, I did run into a client who had questionable line items in their budget, but the client then moved on to another advisor.

As financial advisors advance in their careers, they can be more selective about the clients they work with. Usually that amounts to dollars, but it’s not – and shouldn’t be – just about income and asset level. It’s important to work with clients with the right intentions and those who want to do things ethically.

We are going through new ownership and a rebranding in my current business. In order to best serve our clients, we have gone through the exercise of defining our ideal clientele. Unfortunately, some of the existing customers do not fit this description.

It is important to keep your ideal customer base in mind when researching potential customers or re-evaluating existing customers. It is a “win-win” for the advisor and the client because you can focus your services to best meet the needs of your clients.

In this scenario, you are not necessarily “firing” a customer in the traditional sense. The customer just might not be what your business is looking for and therefore it would be doing the customer a disservice to keep them.

One solution here may be to refer the client to another advisor or company that can better meet their needs. Usually when you approach it this way, customers are very understanding because they recognize that you have their best interests at heart.

This client generally does not appreciate the diversification of asset classes and the long-term financial perspective of investing to achieve their goals.

You can’t always outperform the market. Therefore, this client will never be satisfied and will not appreciate your holistic planning services.

Making the decision to fire a customer isn’t always easy, especially when you’re working on building your customer base.

But if you have a client who is rude or unethical, doesn’t need you or asks for free advice, or doesn’t fit your ideal client profile, letting them go might be the best judgment you can make. can do for your business and the customer.

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