Giving clients the sack
When a relationship with a client goes sour, it is important to end the relationship as professionally as possible to avoid problems down the track.
RI Advice Bondi proprietor and financial planner Rod Dunn said that sometimes there is a mismatch between what a client is paying and the level of service they demand.
He cited a "very nice" retiree client whose frequent visits were ultimately costing his business money.
"To combat her loneliness she used to come and see us a lot and ask the same questions time and time again," Dunn said.
The client was also questioning the fees she was paying, which was making the relationship particularly unhappy for both parties, said Dunn.
"You want people who are going to happily pay your fees to take your advice, and who are a pleasure to deal with - she was becoming neither of those," he said.
But the parting was in no way acrimonious, Dunn added.
"You should tell the truth and tell it succinctly. You don't want to leave on bad terms," he said.
Neville Ward Advice co-owner Andrew Reeve-Parker said there are always some clients who don't "buy in" to a planner's process.
"It's not healthy for either party for that relationship to continue," he said.
The planner should have a full and frank discussion with the client that lays out how the practice manages clients' expectations, portfolios and strategies, Reeve-Parker said.
If it is clear that a client doesn't "buy in" to the process, it may be better for the client to be referred to another planner, he said.
It is vital to formalise the end of the relationship with a letter that fully disengages the planner's services with a request to remove the planner from authority on any of the client's accounts, he added.
While Reeve-Parker acknowledged he was running a business, he said part of what planners do is altruistic.
"I undercharge clients that I'm happy to do business with simply because they're nice people. But I don't feel comfortable overcharging people who are annoying. I just prefer that they're not in the business," Reeve-Parker said.
According to Halcyon Wealth Advisers financial planner Phil Clinton, one (former) client of his received a lot of 'BBQ advice' from friends.
"He kept coming back to me and saying, 'Why aren't I doing this, and why aren't I doing that?'," said Clinton.
The time-consuming process of rebutting much of the 'BBQ advice' became something Clinton learned to dread.
"There came a point where I just said I can't do anything to help him because of the impasse we struck," said Clinton.
"So the best thing for him to do was to go and find someone else," he said.
Recommended for you
AFCA has confirmed United Global Capital’s membership of the body will not be extended to accept further complaints, avoiding a repeat of the Dixon Advisory scenario.
Three of Australia’s largest financial advice groups have shared their thoughts with Money Management on whether they would include crypto on their approved product lists.
Shadow treasurer Angus Taylor has vowed to introduce a bill to legislate a raft of financial services reforms if the Coalition is elected.
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
