Slideshow Why these advisors fired their clients

Published
  • July 20 2018, 5:00am EDT

No two financial advisors are alike as each develops their own unique approach to helping clients.

But, when speaking with advisors, one commonality often arises: the joy they experience when helping others.

While there may be a few bad apples out there, the majority of advisors will go to great lengths to help their clients succeed.

Advisors and clients can forge strong bonds, often referring to each other as friends and even family.

The relationship is one built on mutual trust and respect. But no relationship is perfect. And if it sours, as much as it might hurt or anger the people involved, sometimes the best thing to do for everyone is to end it.

A quick Google search will produce a number of stories on how and why clients should terminate their relationship with an advisor. Often the advisor is faulted for a lack of knowledge or experience, being too aggressive, hard to reach, or a poor communicator.

But what about when the situation is reversed? Terminating an advisor/client relationship isn’t solely at the discretion of the latter. Plenty of advisors have hit their breaking point and ended things on their own.

“The willingness to terminate a relationship is usually in the best interest of the client, the firm and most importantly the existing clients,” says advisor Richard Colarossi of Colarossi & Williams in Islandia, New York. “I need to spend time with clients that subscribe to the way I do business and have productive relationships with, not battling with issues I cannot address.”

Scroll through to read why some advisors had enough and called it quits on some of their clients.

Being rude

“A client got frustrated that an IRA distribution was taking longer than she expected — she called saying she needed money for a house closing two days before the closing — and she proceeded to berate my team leader, verbally attacking her. I promptly called the client and told her that we could no longer work together. No regrets!”

Joshua Nelson, Keystone Financial Services, Loveland, Colorado

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Threatening behavior

“As a new advisor, I got the opportunity to work with a young surgeon at a local hospital. It was the height of the dot-com boom and we had invested in a stock that went up by 50% in less than a month. I thought it would be best to take profits and called him at his office expecting to leave a message with one of his nurses. Instead, his nurse said, “just call him on his cell phone,” and gave me his number.

A few minutes later, my assistant came into my office visibly shaken. She said that the surgeon was on the phone and said that when she’d answered the call, all he said was, “I need to speak to Chip in 5….4….3….” and counted her down. When I got on the line, he barked that he didn’t care about money and that I shouldn’t call him — just do whatever needed to be done — and hung up the phone.

Immediately after hanging up, I knew what exactly needed to be done. I liquidated the position and went online to find transfer paperwork for a well-known online brokerage firm. I printed the forms and mailed them to him along with a letter explaining that we didn’t work with people who didn’t have respect for our team and that we suggested he work with someone else.

A few weeks later, he called to apologize and while I appreciated that, I insisted that we could not work together.”

Chip Munn, Signature Wealth Strategies, Raymond James Financial Services, Florence, South Carolina

Clashing Personalities

“I had a client who was an engineer and abrasive in personality. I met him at an education session I had done for his company and during the course of the presentation — this was in the 90s — I suggested a modeling rate could be 10%.

Every meeting we brought reams of spreadsheets. If we made 10% or more, he said nothing. If we made less he’d say “you said we could make 10%.”

I explained, in what I thought was a professional fashion, that I was using it as an example. He persisted and it was annoying.

Finally, I had enough and told him I was resigning. He looked shocked and I said, “You’re not happy and I don’t feel right about it. I can’t make you happy, so you need to find someone who will. I know you’d resign if your boss was continually unhappy.”

He paused. “My boss is continually unhappy, but it’s not my fault.”

I said, “Mine either. Now either quit harping on the 10% or go somewhere else.”

Leon LaBrecque, LPJR Financial Advisors, Troy, Michigan

Overspending

“We’ve had to tell clients who habitually overspent that we will not be involved in their self-destructive financial demise. [We had] numerous meetings advising those clients that they would rapidly deplete their critical capital 10 to 15 years earlier than the original plans we designed and agreed upon.

There is no reason for us to be engaged if a client ignores our very serious advice about their financial survival because they act irrationally with their money.”

Ian Weinberg, Family Wealth & Pension Management, Woodbury, New York

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Too much family drama

“We cite a recent case, where we knew the family for 40 years. In settling mom's estate, we distributed to the three brothers — one of whom has been an active client for more than 35 years.

There was always animosity between one of the three brothers, but we saw it in living color … red.

Despite the dying matriarch's request that the family homestead be sold to her grandson at a discount, the third son made things difficult for everyone — including us. After yelling at our staff and me, we transferred his funds to the retail side of our custodian. Then he learned he didn't get the estate settled and paid a lot more for the work we were doing.”

David Demming, Demming Financial, Aurora, Ohio

Demanding too much

“Firing a client can be a very delicate situation, but more often than not, it is due to the client's demand to use more of our internal resources than they are paying for. First and foremost, the issue needs to be discussed with the client directly.

If the client is unaware that their expectations may be exceedingly high, how can you expect them to modify their expectations and behavior? After this has been addressed — sometimes on multiple occasions — the conversation needs to focus on the scope of your relationship and whether or not they may be better suited with another advisor or firm.

While it is a conversation that is difficult to have and many advisors prefer to avoid, it is absolutely necessary at times. I believe that most advisors truly want to help their clients live the lives they envision.

Unfortunately, if helping one client attain their vision is greatly impacting your ability to help several other clients, you're doing your other clients and your practice a disservice by continuing to cater to that individual.”

Matthew Gaffey, Corbett Road Wealth Management, Potomac Falls, Virginia