No seriously, it’s not you–it’s me!

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Welcome to the latest CPD article from Ray Griffin in which he explores what for some is the most difficult thing to do in professional practice – to ‘let a client go’. Ray helps you realise when it’s not working between you and a client and then guides you through the letting go, with a smile.

Let’s face it – at some point in your career you are going to be sitting down with a client and you will be struck with the realisation that things just aren’t working out between you two (or three if it’s a couple). For some advisers it will be a clarity that has been coming for a while; perhaps over several meetings whereas for others it will have hit them quite starkly: “This just isn’t working!”

While retail business coaches often argue that “the customer is always right” in the world of professional advice the reality is that there are times when clients are definitely not right. They’re not right with what they say or believe; they’re not right for the advice they need; not right for the type of services you offer and/or not right for you.

Early on you’ll take on pretty much anyone as a client just in order to survive both commercially and personally – after all, you can’t live on bread and water alone.  You’ll probably take on clients even when you know that the ‘chemistry’ between you and the client is not right.

It might be the way they ask questions or the way they criticise something you have done, or not done; it could be that in discussions they always find a way to slip in comments about your fees, disguised as humour or it could be that over time you decide you just don’t like the way they ‘operate’ – you just don’t like them.  Regardless, at some point, you will be wishing you hadn’t taken someone on as a client.

So the challenge is: how do you get them to go and can you do it in such a way that they won’t speak ill of you in your community for the rest of their days?

Broadly speaking there are two ways to ‘let a client go’; have the conversation with them or, write to them. That said it is by far the better approach to have a conversation with the client as this allows you to explain your reasons why the relationship should end. As you will see a little later, it also allows you the opportunity to manage the client’s initial reactions to such a suggestion, which is not possible via a letter for example.

Have you delivered?
Before having such a conversation you need to assess whether or not you have delivered on the services you agreed to when the client engaged you.  Take care here – what did you contract to deliver? What did your SoA and subsequent documents promise you would do?

Let’s just pause on the ‘have to let you go’ topic for a minute or so. What do your advice documents say? Have you, for example, in effect, promised to deliver on rates of return, certain tax outcomes, certain levels of capital by specified timeframes, specific levels of income? Does the language of your advice documents – in any way – suggest (reading from the client’s perspective) that you would deliver definite financial outcomes?

If they do, you need to be especially careful that you are able to ‘shake hands’ with the client when you say goodbye. If the advice documents do suggest definite outcomes in the future, you need to be cognisant that those advice documents – your written word – will live forever and that an aggrieved client might just use them against you in litigation.

This is about setting every client’s expectations properly. That is to say, don’t promise anything you cannot be certain to deliver. Don’t play ‘Russian Roulette’ with your advice documents – write them such that they can act to protect you in litigation, not attack you.

Back to our client with whom things just aren’t working out. So, assuming you have reviewed your advice and are comfortable with it, it really is preferable to have a one to one conversation with the client.  There is no simple solution here – every situation is different so you need to carefully consider how to raise the issue and how to deliver the message.

It could be that during a review meeting with the client you call a pause to the discussion and some words such as those following might be appropriate;

You: “John – from what I’m hearing from you today and in some previous meetings – you seem unhappy with us and I’m wondering if we perhaps need to speak about where we go from here? I guess where I’m coming from is that it might best if we ceased being your advisers so you can look to find another firm which might better suit what you’re looking for?  What do you think?”

Of course by asking the client that last question you run the risk of the client saying the want to stay – which is, presumably, not what you want. So let’s follow the conversation some more.

Client: “No, Susie, I’m OK – I’m happy to stay. I know I whine about things a bit but I want you to be my adviser.”

You: “Well thanks for that but I’m concerned that the ‘chemistry’ between us in not right. I mean – it seems from our conversations that deep down you might be expecting something we can’t deliver for you and if that’s the case, then – really – we should just finish up.  Please don’t misunderstand me – what I really want is for you to be truly happy with us and I just don’t sense that’s the case. I wonder if we should just think on it for a couple of weeks and let’s speak again?”

The client could respond in a number of ways. For example:

Response 1
Client: “Well – now that I think about it, you’re probably right. I’ve been thinking about it a bit for a few months and it probably is best to finish up, as you say. What would we need to do to make that happen?

Response 2
Client: “No – really, I am happy – I don’t want to change to another adviser. Besides it would cost to change.”

Response 3
Client: “You know – I think you’re right. I really do want to finish up here – I’m not happy and don’t think I’m getting good value for money. So let’s call it quits here and now!”

The first response is what you’re really looking for here. The client seems in a good frame of mind about it and you would move on to discuss what’s required to sever the relationship which of course would need to reference the relevant section of the original agreement the client and your firm executed.

In the other two responses you’ve got some problems ahead. In the second, the client doesn’t want to go but you want him to go.

You: “Well thanks for those comments, John, but I really do think we both need to consider finishing up. You know, I suspect if we keep going, at some point in time we’ll be back having the same discussion.  The things that you’ve been concerned about – we just can’t provide you with – it’s just not the way we operate as a business. And to be perfectly honest about this, John, we would prefer not to receive payment for services if a client is fundamentally unhappy with us. It’s just not the right thing to do. So here’s what I want to propose we do.  At the end of this month – or sooner if you prefer – we will formally resign as your advisers …”

Damage control
The third response is a bellwether to potential future problems. A suggested way to deal with that is:

You: “OK – that seems best, John. I really am very sorry we haven’t been able to meet your expectations. We do try our best however I also know that the type of services we provide do not suit everyone.  So what we’ll do now is write to all your investment providers and notify them that we’re no longer acting as your adviser – that will ensure that we have no access to your information from that point on. We’ll also cancel the fee debiting arrangement with XYZ account from X date (with reference to client agreement terms).  John, we’ll also write to you confirming what’s happening in regard those matters. How does that sound to you? Is there anything else you need information on?”

So what are we trying to do in such a scenario?

Firstly, we’re trying to let the client know we’re not going to try and hang on to them as clients.  “Ok – that seems best, John.” We’re trying to diffuse a potentially aggressive discussion – we know from what the client said (Response 3) that his mind is made up; that it’s beyond retrieval and in any case, you want to sever the relationship too.

However, we’re also trying to let the client ‘control’ the decision to leave. If the client, with a list of grievances, felt like he was being ‘sacked’, he might take umbrage and seek some form of recompense or retribution via, for example, a formal complaint to a complaints resolution service. Such an outcome would be time consuming and a cost to your business in more than just commercial terms. It’s a situation you need to carefully manage to avoid an escalation of the client’s dissatisfaction.

In such a response from you, there is also an apology: “I really am very sorry…” For many people, all they want to hear is that you are sorry.  The response also outlines a process, a way forward, for the client to finish up that doesn’t result in a lot of paperwork for the client.  In this situation, the result you should be seeking is a smooth separation while minimizing the risk of a complaint being made by the client, as retribution. Handling all the paperwork for the severance will go a long way to achieving that goal.

Give them an out
Looking more broadly, some people will have great difficulty in letting you know they are unhappy. It might not make sense to you (“If they’re unhappy too why didn’t they say so before?”), but for some people, by you raising the possibility of them ‘leaving you’, you will have lanced the proverbial boil that’s been festering in their mind for some time. You will have given them an out – a way to leave without the great anxiety such a conversation would have caused them if they had to initiate it.

Win-win
When this is all said and done, your overall objective must be to achieve a win-win outcome. The client needs to be able to leave without angst and without anger.  You need to be able to let the client go in such a way that you head-off potentially expensive complaints handling. 

You can’t please everyone
In such situations it could be said that ‘knowledge’ is realising, as soon as possible, that the relationship has no future but that ‘wisdom’ is being able to end it casualty free.  Greater wisdom would also be evident if the advice documents are written in such a way that they set clients’ expectations carefully in terms of what an adviser can – and cannot – deliver.

 

Note: The accreditation for this CPD article is no longer current. Please visit our CPD section for current CPD quizzes

 

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