Executive Summary
In the financial planning world, it's not uncommon to "fire" clients that are especially difficult to work with, not merely because the clients are unprofitable, but simply because they are so unpleasant for you and your staff even if they ARE profitable. In fact, many practice management consultants would suggest it's a best practice to systematically fire some of your most unpleasant clients, as it helps to create a more positive workplace for you and/or your employees. Yet the reality is that often clients who are difficult to work with are also those in greatest need - and in virtually all other helping professions, it's a requirement of the profession to help everyone in need, not just those who are the most pleasant to work with. Of course, the reality is that right now, there aren't enough financial planners to serve everyone out there, but nonetheless it raises the question: is firing the most difficult clients in a financial planning practice a best practice, or a sign of an immature profession?
The inspiration for today's blog post was a recent conversation I had with a friend who is a social worker, who was relaying some of the challenges he was facing with certain clients for whom he was responsible as a part of his job. And as someone who works with people struggling with mental illness and drug addictions, "difficult" clients for him make "difficult" financial planning clients pale in comparison.
Avoiding Or Getting Rid Of Difficult Clients
In the financial planning world, we often don't see really difficult clients (or at least, not for long), for the simple reasons that we both generally have the flexibility to choose which clients to work with in the first place, and we also have the flexibility to choose to stop working with clients we don't want to work with.
And in fact, ending relationships with "difficult" clients is not uncommon in many financial planning firms. In some cases, the reason might be that the client persistently fails to implement the advice provided - potentially even causing concern that someday the planner might be held liable for the client's bad outcome, even though it was the client who failed to implement recommendations in the first place. In other scenarios, the problem is simply that the client has such a negative or unpleasant personality, that the planner simply ends the relationship to avoid interacting with the client anymore.
As a result, "firing" your most difficult clients is actually considered a best practice by many/most practice management consultants. It can improve staff productivity to not have to deal with very difficult people and their often-time-consuming problems, not to mention simply improving morale by not needing to deal with unpleasant people in general. In fact, some would advocate that firing the most negative and difficult clients can be an especially effective leadership tool in a planning firm to demonstrate the firm's commitment to its staff to create a positive work environment (i.e., that it's more important that staff find their jobs positive and rewarding than it is to get that last dollar of revenue from a difficult client).
Of course, the reality is that in some cases, clients are "fired" from a practice simply because they don't generate enough revenue to be profitable; that isn't the point here. Planning practices are still businesses, and a business that isn't run in a profitable manner can't help anyone, so there's nothing wrong with not serving clients that the firm can't serve in a sustainable manner. The point here are the clients who do have the financial wherewithal to pay the financial planner (under whatever business model the financial planner operates), but are still separated from the practice because they are too difficult or unpleasant to work with, or are too non-compliant (i.e., don't comply with and implement recommendations).
Firing Those Most In Need Of Help?
Notwithstanding the fact that firing difficult clients is often considered a best practice, it also raises a difficult question - doesn't that mean that we as financial planners may be systematically dismissing those clients who are most in need of help? Is that truly the appropriate path if we wish to be recognized as a bona fide helping profession for everyone?
In other words, what does it say about financial planning that we take a subset of people who have sought out our help and deny them access to financial planning care and providers, because they happen to be difficult to work with? In the world of other helping professions, from psychology to social work to medicine and even religion and theology, such practices are completely unacceptable. All those in genuine need of care are served, at least in some fashion by some professional.
Yet in the financial planning world, it is routine and accepted to fire a difficult client, and without necessarily finding them an alternative source of care. At least in other professions, if a client is "unworkable" it is at least part of the accepted standard of care that the client will be transitioned to another practitioner/firm/agency/organization that is positioned to help. In financial planning, however, we often do little more than send some clients most in need of help back out onto the streets to fend for themselves.
Helping A Broader Range Of People
So how does it reflect on financial planning as a profession that we systematically refuse to help serve many of those who need our help, without any process to ensure that they receive the assistance of a professional at all? I have to admit, it doesn't reflect well on the profession, to say the least. If we truly want to be recognized as a profession, we need to help everyone who seeks out our services and are in need, not just those we happen to find it most pleasant or easiest to work with.
Of course, the reality is that as it stands right now, there aren't enough financial planning practitioners to help "everyone" anyway, and "difficult clients in need" are really only part of a subset of those we fail to serve (along with huge swaths of the mass affluent, and those who have no assets or disposable income whose primary needs are focused on debt and cash flow). And this clearly isn't a problem that can be solved overnight.
Nonetheless, I am still struck that when I compare what we do to my friend in social work, the reality is that occasionally difficult clients are just a reality of the incredible public service he provides - whereas in the financial planning world, it's typically considered prudent and a best practice to not work with such individuals, nor is it a part of our standard to ensure that they get help at all.
How do we reconcile such different perspectives on serving "difficult" clients in our respective fields?
So what do you think? Have you ever fired a "difficult" client who was in need of help, but just seemed to be "too difficult" to serve? Is there a moral or ethical professional obligation to serve that person anyway? Should there be? Do we need more firms that can serve such individuals to become a bona fide profession?
