“Mr. Smith, Im sorry to have to tell you this, butwe have to part company. Thats right. After re-evaluating our relationship, Ive decided that you no longer make the cut to be one of my clients.”
Those words, if uttered more often, would go a long way to making the financial advisors job more rewarding, say producers contacted by National Underwriter. And when the chemistry between advisor and client isnt right, or when the relationship becomes a financial and emotional drain, then the advisor would do well to give the client the boot, they add.
“The best producers are those who focus on A clientsthose who are the most profitable to serve and entail the fewest hasslesrather than B and C clients who may not fit their target [client] profile,” says Steven Craig, a principal with Structured Financial Partners, Encino, Calif. “Why go through the agony of discovering that two people are incompatible in terms of goals, values and approaches to business and life?”
To help avoid that agony, says Joe Lukacs, founder and president of Melbourne, Fla.-based International Performance Group, producers ought to inquire into other professional relationshipsand problems thereinthe client may have before closing a sale.
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Herbert Daroff, a partner for Baystate Financial Services, Boston, Mass., says it pays to qualify the prospective client at the first meeting. Daroff himself uses what he calls a “social style” chart, which places individuals within one of four quadrants: “drivers,” “expressives,” “analyticals,” and “amiables.”
Daroff, who describes himself as a driver (one who tends “to tell” and is less emotive) says he generally doesnt work well with amiables (those who tend to ask and are more emotive). Amiables, he says, try his patience when requested to make a decision. So, when feasible, he refers these clients to a partner within his firm who matches their psychological profile.
Also to consider are shared interests. Though prospects behavioral bent might not be a cause for concern, how and where they socialize and recreate can limit the depth of the relationship. An associate of Daroff enjoys “great relationships” with clients, he observes, in part because they all play golf together.
To be sure, no amount of quality time on the putting green can keep a relationship from souring. That often happens because of changed circumstances in the clients financial or family situation, say producers.
Richard English, an Arlington, Texas-based advisor affiliated with Western Reserve Life, Clearwater, Fla., and American Skandia Life, Shelton, Conn., says he terminated a relationship with a couple because the husband became more arrogant and less receptive to his suggestions, as the couples financial situation improved.
More frequently, observers say, a deteriorating financial picture will prompt the client to call the advisors expertise into question. Daroff points to one client who, having lost his job and suffered from two consecutive years of a bear market, requested an inordinate amount of research.