Breaking up is hard to do! Advisors reflect on the best ways to 'fire' a client

As hard as it is for a financial advisor to add a client, sometimes they need to be let go. And that can be just as hard, if not harder, depending on the reason for breaking off the relationship.

Peter Deluyker, an advisor with Oak Hill Wealth Strategies which is affiliated with Prospera Financial Services, says most of the reasons he might let a client walk fall into the ethical category.

“If a client asks us to blur the lines, that creates liability and is not a relationship we want to continue. The same is true when a client does not treat our staff with respect. We take our fiduciary duty seriously, and I believe that should be met with the same professionalism and respect that we show to every client,” Deluyker said.

And while he steadfastly maintains that no one should be above reproach, he does admit that some clients may get a little more leeway depending on the relationship or context. But those situations are rare, according to Deluyker.

“If someone is disrespectful to our staff, and that behavior continues after it has been addressed, that is not something we would allow to continue. I think having that standard in place encourages both advisors and support staff to show up each day with the right attitude and mutual respect,” Deluyker said.

On the very rare occasion he is forced to fire a client, Deluyker says he tries to be direct without being aggressive or accusatory.

“We explain that the relationship no longer seems to be the right fit and that we want the client to work with an advisor who is better aligned with their needs and expectations. From there, we do everything we can to facilitate a smooth transition, including coordinating with the new advisor when appropriate,” Deluyker said.

Elsewhere, Jeffrey Sheftic, chief growth officer with World Investment Advisors, does not think about it as “firing” clients as much as ensuring there’s a strong, “mutual fit” between the client, the advisor, and the planning approach. That said, he does admit there are a few situations where continuing the relationship may no longer serve the client or the advisor.

One of those occasions would be if a client consistently chooses not to follow agreed-upon guidance, because it becomes difficult for Sheftic to deliver the outcomes they expect. Another reason would be a breakdown in trust or communication.

“Financial planning is a long-term partnership built on transparency and respect. Without that foundation, it’s hard to be effective. Also, if a client’s needs change or evolve. Sometimes a client’s situation changes, and another advisor or service model may simply be a better fit,” Sheftic said.

If a relationship does need to transition, how it’s handled matters just as much as why, according to Sheftic. In such cases, Sheftic tries to lead with clarity and professionalism.

“Be transparent about why the relationship may no longer be the right fit, without being emotional or reactive. And whenever possible, help guide the client to another advisor or resource that better fits their needs,” Sheftic said, adding that it’s also important to document the breakup appropriately.

Finally, Sheftic suggests keeping the door open when appropriate.

“Not every transition has to be permanent. Sometimes circumstances change, and relationships can be revisited in the future,” Sheftic said.