Firing Clients
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Nov 1, 2008 5:21 am
Man, am I feeling good tonight. I just put the finishing touches on a letter firing a real pain in the butt client who was not pleased regardless of what I did for them. The last straw was the wife calling in today, bitching at my assistant and telling her that their accountant hated our statements. I have bent over backward for these people, creating direct IRAs to save on fees, and even manually consolidating their IRAs after the direct accounts created confusion about what they actually had (guess they can’t add). The following is an excerpt from the letter they’ll be receiving next week, telling them, in the nicest way possible, that I’m done with THEM…
"I understand from your call today that the statements are still not to your satisfaction and your accountant voiced similar disapproval. As a result, I’ve come to the conclusion that we will be unable to meet both goals of keeping your fees and charges to a minimum and presenting an account summary that meets your standards.<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
As you’ve indicated that you receive statements from other advisors that you find easier to understand, I have reached the conclusion that we would both be better off terminating this relationship at this point. Thus, I am asking you to transfer your accounts with me to another advisor either with or outside of LPL. I’ll be happy to assist you in any way to effect this transition. If no transfer instructions are received prior to the end of the year, I will instruct LPL to remove me as advisor of record and designate your accounts as house accounts. I’m sincerely sorry that we were unable to deliver the level of service you desire and I wish you well in the future." For those of you who have never had the perverse pleasure of firing a client, it's hard to describe how good it feels. I took a lot of crap in the year that I had these clients and received next to nothing in the way of revenue, even though it was a fairly sizeable (mid-6) account. Almost all of the account was made up of investments where all or nearly all of the fees were received up-front. These people bad-mouthed the advisor who I was taking the account from (1st red flag) and I never felt any shred of trust from them even though I did everything within reason to make them happy. I'm pissed at myself for wasting a year and many hours for a few hundred dollars of revenue and far too much heartburn. When the wife saw fit to tear into my assistant today, I reached the final straw. Sometimes, the AUM is simply not worth it. I'm also giving strong consideration to firing another client who bitched about paying commission on a stock sale and asked me to reinvest the proceeds in Vanguard Primecap. I told her that not only was the fund closed, it was also not available on the brokerage platform. She then bitched that the fund I recommended had a sales charge. That was over 1,000 points ago. Better yet, the stock I recommended she sell was sold $7 higher than where it sits today, so I've made two excellent in-the-money recommendations and she fails to see any reason to pay for advice. Rest assured, when I speak to her Monday, she'll be on very thin ice... For you rooks new to the business, read this lesson and remember it well. There are plenty of prospects out there who are absolutely not worth your time and effort. The sooner you recognize these leeches, the better...and don't make the assumption that larger accounts are worth the trouble as that's not always the case. Perhaps we can use this thread to share stories about experiences firing various clients. Not only will we possibly learn things that will prevent future mistakes, it's almost a sure bet to make you feel better at the end of a bad day in the office...Hi Indy…back from a week of Technology Updates. I must admit I will take clients and the markets ANYTIME over a week of IT people
Great post and over the years I have done the " firing of clients " and always felt much better for it .....and I am sure the client has moved on to a better place. Met this a.m with a new client that had " fired " their advisor. He wanted to vent and his wife wanted to move on. The advisor was a relative of the wife ( NOTE , sometimes having family can be a bad thing ) so we did the paperwork and on to a new business relationship.Oh boy, there are so many reasons to do this…
1.) Excessive calls from client who never wants to DO anything. 2.) Client who will not do any transaction without consulting with accountant, lawyer or family member "who knows about these things." Same with clients who argue that Cramer, Suze, Buffet or anyone else said so and so. If you don't want MY advice, there's no reason to have an account with ME. 3.) Client who has ever, for any reason, had an arbitration or written a customer complaint in the past regarding an advisor. It's just not worth risking that someone will see that as the default resolution of an issue. 4.) Fee adverse clients. The line I use is, "You've obviously indicated you don't believe my services have value. What I don't understand is why you continue to seek advice at all from me. Perhaps self management of your account at a discount firm is an option." 5.) Individuals who consistantly refuse to listen or ask questions only to answer themselves or argue. I'm just not interested in having an adversarial relationship regardless of situation.As an interesting aside, I spoke with LPL today about termination procedures and upon their instruction, called the client to inform them of my decision to terminate. I had one of the nicest conversations I’ve ever had with the wife and we agreed that the relationship wasn’t working as we’d hoped. She was fine with the termination, which tells me that if I hadn’t moved first, I probably would have been fired anyway, so it was nice to clear the air. LPL had me follow that with a letter confirming the decision to terminate and documenting the conversation. After 30 days, if the accounts are not moved, I fax the letter to LPL and they follow with another letter and 30 days additional time, after which, the accounts, if they are still under my name, are converted to house accounts. I’m guessing that the second letter won’t be necessary in this case.
Although I had no desire to speak to these people, in the end, the conversation was a good one and ended the relationship on a fairly positive note. She told me that she appreciated my efforts and my honesty. Compared to what I expected, this was high praise. There was this small, sick part of me that hoped she was nasty so I could feel better about firing her. Unfortunately, her positive tone, and the knowledge that I was for all intents and purposes being fired, took all the joy out of that experience. I'm replacing that relationship with a larger account consolidation where I have a much better (and more profitable) relationship with the client. I can already feel the improved productivity in my book. The other client (the one on thin ice) did not return my call today so at the moment, she's still on the books.Congrats Indyone. Aside from the obvious personal satisfaction from dumping a client like that, it is almost always a smart business move in the long run. It was so nice to be able to dump almost all of my “non ideal” clients in one fell swoop when I left to go independent. I’m amazed at the clear realization of how much of my time used to be sapped by those clients, and is now ‘found time’ to devote to better uses.
Onward and upward!
Wow Indyone, you make firing clients sound like a grand ole’ time. I hope my first firing is as exciting as this one! haha, in all seriousness, good letter, you maintained professionalism and stuck it to em at the same time!
Today's client (potential) firing story...
Had a lady client call in and tell me that she and her husband had come to the conclusion that they needed to get everything out of the market. As an aside, this is a very sweet (if misguided) lady, so I take no real pleaseure in seeing her do something so self destructive. She started with $42K in a VA and as of yesterday, it's sitting at about $27K. That revelation was the first bit of shock to her...she said "I thought it was at $22,000?!" I explained to her that that was probably her last statement balance, but that the market had recovered some since then. Then she tells me about this God-awful piece she saw on 60 minutes last Sunday night where a journalist was confronting someone from the 401(K) industry and saying " These people won't make their money back in the next 15 years, will they?" Supposedly the respondent did not disagree with the assertion (How can we? Who knows the future?) I told her that in my opinion, that waas irresponsible journalism and is almost as much to blame for this mess as Wall Street and irresponsible consumers. I told her in the end, that I will hold no one hostage, particularly someone who trusts their friends and the media for investment advice more than they trust me. I told her that I would put the VA in a fixed bucket in preparation for the transfer and she threw on the brakes right then and there..."Well maybe I should leave it where it's at?" I told her that was entirely up to her, but I would proceed on the assumption that she was transferring it to a bank. Gradually, the light bulbs are coming on..."Well what happens if the market recovers?" "Well, Mrs. Soon-to-be-ex-client, you'll most likely be left in the dust and won't participate in the recovery." "Well, what can I make on safe investments at the bank?" I told her that the best thing I'd seen recently was a 3-year 3% CD. She didn't like that answer very much. Truth be told, I like this lady personally, but at the same time, I want people that listen to me for advice, rather than getting it from 60 minutes and the local coffee shop, so I'm very gently pushing her out of the nest. I'm trying to get a 1,000-piece mailing out the door so I can replace those who don't want to listen with those who are ready to...stay tuned...[quote=Indyone]
Today's client (potential) firing story...
Had a lady client call in and tell me that she and her husband had come to the conclusion that they needed to get everything out of the market. As an aside, this is a very sweet (if misguided) lady, so I take no real pleaseure in seeing her do something so self destructive. She started with $42K in a VA and as of yesterday, it's sitting at about $27K. That revelation was the first bit of shock to her...she said "I thought it was at $22,000?!" I explained to her that that was probably her last statement balance, but that the market had recovered some since then. Then she tells me about this God-awful piece she saw on 60 minutes last Sunday night where a journalist was confronting someone from the 401(K) industry and saying " These people won't make their money back in the next 15 years, will they?" Supposedly the respondent did not disagree with the assertion (How can we? Who knows the future?) I told her that in my opinion, that waas irresponsible journalism and is almost as much to blame for this mess as Wall Street and irresponsible consumers. I told her in the end, that I will hold no one hostage, particularly someone who trusts their friends and the media for investment advice more than they trust me. I told her that I would put the VA in a fixed bucket in preparation for the transfer and she threw on the brakes right then and there..."Well maybe I should leave it where it's at?" I told her that was entirely up to her, but I would proceed on the assumption that she was transferring it to a bank. Gradually, the light bulbs are coming on..."Well what happens if the market recovers?" "Well, Mrs. Soon-to-be-ex-client, you'll most likely be left in the dust and won't participate in the recovery." "Well, what can I make on safe investments at the bank?" I told her that the best thing I'd seen recently was a 3-year 3% CD. She didn't like that answer very much. Truth be told, I like this lady personally, but at the same time, I want people that listen to me for advice, rather than getting it from 60 minutes and the local coffee shop, so I'm very gently pushing her out of the nest. I'm trying to get a 1,000-piece mailing out the door so I can replace those who don't want to listen with those who are ready to...stay tuned...[/quote] I saw that 60 minutes episode...it wasn't my favorite. So what kind of mailer are you sending out?I’m having a Glenn Beck moment. Indy, you are such a freaking grounded guy. Firing clients bad feels good. It restores the natural balance. We should be required to fire at least one each year.
It’s a value statement mailer…I’ll share it with you later when I have more time…
Why not move them to house accounts sooner and take the load of your shoulders of waiting? Can you do that?
[quote=Indyone]
Today’s client (potential) firing story…
Had a lady client call in and tell me that she and her husband had come to the conclusion that they needed to get everything out of the market. As an aside, this is a very sweet (if misguided) lady, so I take no real pleaseure in seeing her do something so self destructive. She started with $42K in a VA and as of yesterday, it's sitting at about $27K. That revelation was the first bit of shock to her...she said "I thought it was at $22,000?!" I explained to her that that was probably her last statement balance, but that the market had recovered some since then. Then she tells me about this God-awful piece she saw on 60 minutes last Sunday night where a journalist was confronting someone from the 401(K) industry and saying " These people won't make their money back in the next 15 years, will they?" Supposedly the respondent did not disagree with the assertion (How can we? Who knows the future?) I told her that in my opinion, that waas irresponsible journalism and is almost as much to blame for this mess as Wall Street and irresponsible consumers. I told her in the end, that I will hold no one hostage, particularly someone who trusts their friends and the media for investment advice more than they trust me. I told her that I would put the VA in a fixed bucket in preparation for the transfer and she threw on the brakes right then and there..."Well maybe I should leave it where it's at?" I told her that was entirely up to her, but I would proceed on the assumption that she was transferring it to a bank. Gradually, the light bulbs are coming on..."Well what happens if the market recovers?" "Well, Mrs. Soon-to-be-ex-client, you'll most likely be left in the dust and won't participate in the recovery." "Well, what can I make on safe investments at the bank?" I told her that the best thing I'd seen recently was a 3-year 3% CD. She didn't like that answer very much. Truth be told, I like this lady personally, but at the same time, I want people that listen to me for advice, rather than getting it from 60 minutes and the local coffee shop, so I'm very gently pushing her out of the nest. I'm trying to get a 1,000-piece mailing out the door so I can replace those who don't want to listen with those who are ready to...stay tuned...[/quote]Index Annuity.
[quote=HAAIC]
[quote=Indyone]
Today’s client (potential) firing story…
Had a lady client call in and tell me that she and her husband had come to the conclusion that they needed to get everything out of the market. As an aside, this is a very sweet (if misguided) lady, so I take no real pleaseure in seeing her do something so self destructive. She started with $42K in a VA and as of yesterday, it's sitting at about $27K. That revelation was the first bit of shock to her...she said "I thought it was at $22,000?!" I explained to her that that was probably her last statement balance, but that the market had recovered some since then. Then she tells me about this God-awful piece she saw on 60 minutes last Sunday night where a journalist was confronting someone from the 401(K) industry and saying " These people won't make their money back in the next 15 years, will they?" Supposedly the respondent did not disagree with the assertion (How can we? Who knows the future?) I told her that in my opinion, that waas irresponsible journalism and is almost as much to blame for this mess as Wall Street and irresponsible consumers. I told her in the end, that I will hold no one hostage, particularly someone who trusts their friends and the media for investment advice more than they trust me. I told her that I would put the VA in a fixed bucket in preparation for the transfer and she threw on the brakes right then and there..."Well maybe I should leave it where it's at?" I told her that was entirely up to her, but I would proceed on the assumption that she was transferring it to a bank. Gradually, the light bulbs are coming on..."Well what happens if the market recovers?" "Well, Mrs. Soon-to-be-ex-client, you'll most likely be left in the dust and won't participate in the recovery." "Well, what can I make on safe investments at the bank?" I told her that the best thing I'd seen recently was a 3-year 3% CD. She didn't like that answer very much. Truth be told, I like this lady personally, but at the same time, I want people that listen to me for advice, rather than getting it from 60 minutes and the local coffee shop, so I'm very gently pushing her out of the nest. I'm trying to get a 1,000-piece mailing out the door so I can replace those who don't want to listen with those who are ready to...stay tuned...[/quote]Index Annuity.
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Tape a note to a dog, right?