Save an endangered client relationship

If a customer seems unhappy for a long period of time, first ask if the problematic relationship can be saved. Sometimes, salvaging the connection isn’t possible or in anyone’s best interests, so it’s crucial to know when to part ways. If this is the case, the client most likely knows on some level. Once she’s lost faith in your services, it’s very difficult to turn the relationship around.

Similarly, if you’re not experienced in the work she needs—which happens most often with wealthy clientele—or if the relationship has become too demanding, it may be time to walk away. Find a professional and diplomatic way to suggest her needs and your services aren’t well matched.

“Treat clients professionally, even if they’re on their way out the door. At least then you’ve done what you can,” says David Cooke, business development specialist at Qualified Financial Services. “Be as helpful as possible during that transition.” If the relationship is valuable, however, examine your meeting and planning tactics.

Advisors sometimes inadvertently develop bad habits that drive clients away, say Kett and Cooke. For instance, most advisors tell stories about past clients, using their problems as examples to show how strategic or tactical changes could affect portfolios. But be wary of how you present those stories. If you make past clients look bad or reveal too much about their personal lives, your current customers will wonder what you might be telling others about their mistakes.

Don’t be caught off-guard

To make sure you know whose at risk of leaving, ask clients to give you feedback on your style and performance through surveys. You’re more likely to get honest answers if they’re anonymous, says Kett, but regardless, people appreciate that you want their opinions.

During stressful periods, make sure to check in often. While you might have a great history, one small mistake or loss during hard times can cause uncertainty and negative reactions, says Kett. Make sure you e-mail and call at least once between your regular intervals. If someone does complain, don’t take it as a bad sign. It can be a great opportunity to make changes and fix problems directly.

“If someone makes you aware of a problem, they’re giving you an opportunity to fix it and make them happy,” says Kett. “It’s always better to receive a compliant than for them to say nothing at all.” She adds, “If clients value the relationship, they’re going to speak up. If they don’t care, they’ll just shop for another advisor.”

Four steps to salvaging a client relationship:

1. Don’t hide.

   Ignoring the problem will not make it go away. At best, the tactic will only draw out the end of your relationship with the client. Similarly, even if there is not a problem that you’re aware of, Cooke points out that assuming things are well and taking good clients for granted is a bad habit which can lead to trouble. Surveys and checking in, as mentioned, will help diffuse any built up tension or concerns.

2. Get in front of the client.

   “The only way to have an honest dialogue with a client is face-to-face. It can’t be done in a phone conversation or e-mail. If there are issues, those are only going to come out in conversation,” says Cooke, who adds that body language and the questions clients ask can be particularly telling about the situation. “If the advisor continues down the path of e-mails and voicemails, hoping the problem goes away, that’s a recipe for the relationship to fall apart.”

3. Listen to the client.

   If a client expresses concern about sub-par returns, Cooke says advisors can feel inclined to simply talk about the portfolio being balanced, and that the returns being observed are on par with everything else occurring in the market. “That’s a pat answer,” he says. “In the client’s mind it doesn’t address the problem.” He adds, “We need to address the matter of market volatility and poor investment performance beyond the usual ‘long-term view’ or ‘relative performance’ conversation. For some, their investment plan may need adjustments, while others should perhaps exit market investments altogether [to avoid risk].” Cooke stresses the need to help clients put portfolio returns in the context of their overall plan design. Include other measures such as insured products, tax strategies, and other elements unrelated to the market because it’s not sensible to have a client’s entire financial plan hinge on unpredictable returns; if the plan is solid, volatility will cause less panic.

4. Follow up.

   Do more than expected—say thank you, tell them the steps you’ve taken to rectify the situation, remind them that you value their business, and make a point of reconnecting with the client again with more personalized communication. “If your relationship hasn’t gone well for a while, it may be difficult to change or rectify,” says Kett. “But if a client’s had a good experience with you before, it may not take long to get back on track.” If that’s the case, have an open conversation about where things may have gone wrong or why they’re worried. Such clients will likely give some leeway if you’ve consistently helped them meet goals in the past.