There are 2 big questions before you fire a client.
Best Practice Advice & Practice Management & Professional Services

There are 2 big questions before you fire a client.

September 13, 2019

by Tony Vidler  CFP logo   CLU logo  ChFC logo

I encourage you to try this: fire a client.

It is liberating, and it moves your thinking and sense of self worth onto a different professional plane.  Pretty much everyone who has been in professional practice for more than a year has at least one or two clients who are just a wrong fit.  They might be good human beings, and nice with children and small animals and all that, but they are just a wrong fit for your business relationship.

You are best to be rid of them.

There are 2 big questions to work through before you do, but do not underestimate the importance of the decision if you want to keep your professional reputation intact.

I remember the first time I did it, and the angst that went into making the decision. It went against everything I’d been taught to that point. It was 100% at odds with the “customer is king” approach to being a professional, and the “provide service” ethos.  I wrestled with it for weeks before mustering up the courage to actually do it.

I suspect it was a typical situation shared by many many others really.  It was an investment client, and even though she had said she wanted financial planning advice and I had continually gone through the exercise over a period of a few years to try and get her to consider the future a little more strategically, she insisted on focussing on the transactional.  She did so to the point where she would regularly email me advertisements for investment rates from the newspaper and ask why I hadn’t recommended that particular investment.  Any investment recommendation that was made, and occasionally followed, was inevitably challenged within months.  We’d started on a fee basis, but then had to change that to a brokerage basis (which I discounted substantially) as she felt the fee’s were excessive and it was a better deal to pay per investment.  But then she read about the conflict that these “exorbitant” brokerage rates created….there was just no way I could get it right for her.

Frankly it had reached the point where any contact with her was dreaded on my part.

She didn’t take advice, but gave it.  She had the attention span of a goldfish. She wanted to continually chase the latest hot thing.  Newspaper advertisements were more credible than I was.

Obviously I didn’t think I was taking on that sort of client to begin with, but then, every new client is a risk and you don’t really know what you’re getting for some time.  But sometimes we have taken on a client and we then find that they are the client from hell. Making more phone calls and sending more emails than the entire Top 20% of your other clients combined.  Fighting fee’s and brokerage every step of the way too.  Constantly shifting demands and focus.

It is a recipe for ongoing disappointment for both parties, and inevitably bad PR for your business.

Eventually I came to my senses and fired her.  As it turns out, she was just the first of several more in months to come.  As with so many things in life, after the first one it gets a lot easier…


The two things I wrestled with were:

  1. how do I know that it is a good business decision to fire a client (and I am not just reacting illogically/emotionally to someone who is pissing me off)?
  2. how do I do it professionally, but unequivocally (I don’t want to damage my commercial reputation)

This was how I worked through the decision.

Is it the right thing to do?

a.  Are we meeting each others behavioural expectations?

b.  Is there mutual respect?

c.  Are the expectations of me as an adviser fair and reasonable?

d.  Is the business relationship economically viable (hours used versus revenue generated)?

e.  If the answers are “no” to those questions, are any of the above able to remedied?


At this point we either loop bacdk and fix what can be fixed and try and get it back on track, or we’ve reached the conclusion that it is “un-fix-able”. So now we move on to how we are going to intiate the divorce…

What is the right way of doing it?

a.  Arrange a meeting to discuss it in person

b. Adopt the position of “I am unable to meet your (client’s) expectations” in my professional opinion.

c.  Provide an alternative list of advisers or suppliers specialising in the field or area’s they need.

d.  Offer a full copy of their records/file to transfer to another adviser.

e.  Provide resignation in writing to client.

f.  Ensure any or all remuneration arrangements cease (including brokerage; asset fees or anything similar) by advising necessary parties, and ensure those parties are aware you no longer provide advice and/or service.

g. Remain civil and professional, including dealing with emails or questions involving transitional arrangements between the client and another firm, but provide no advice or engage in discussion over the decision.

Once you have worked through these questions and followed them up with definitive action, there is no question that you have made a good business decision and handled it as professionally as it can be done.  That is about as much as you can hope for when it is time to fire the client from hell.

Just as an after-thought though, you could adopt the position that a UK adviser told me that he took some years ago when regulatory reform was first being introduced there.  He (apparently) assessed every one of his 800 or so clients with a simple question:

“would this person ever contemplate suing me?”

He offloaded every client where he thought there was a risk they would turn on him.

Apparently he reduced his client base to a total of 6 fairly swiftly – all family members or closest friends of course.  But then built a fabulous new business from there…but that is another story for another day.

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