Managing client expectations can be one of the most challenging and often frustrating experiences for financial planners.
There are plenty of situations where a client may become rightfully agitated; for example when they lose money.
However, more difficult clients may also take out their negativity on their financial advisor, perhaps by berating you with phone calls, venting their frustrations or never seeming to be satisfied.
While you can’t please all clients, there are several things you can do to manage their expectations and facilitate a greater likelihood of their happiness and satisfaction.
First and foremost, educate your client. Your client may have no understanding of the investment world or have disillusioned expectations.
The role of a financial advisor is to offer a realistic perspective based on facts, data and experience.
When in doubt, keep it simple. You should be able to explain even the most complex ideas in simple terms, so you client can understand.
Help your client to understand that their investment performance is relative to the entire market.
If a client is frustrated with their annual returns, offer the perspective of how it compares to the market, as usually, that’s a better benchmark for performance comparison.
If your client’s accounts are performing at par or better than the markets, they have very little to be upset about.
Before signing a new client, make clear the service you provide and what it entails. Doing so will avoid miscommunication or misaligned expectations down the line.
For example, particularly demanding or difficult clients may feel entitled to call you whenever and as often as they please, or get frustrated when you don’t answer their calls personally.
Remember, your fees are a reflection of your service; you are never obligated to give more or “freebies,” no matter how entitled the client feels. A client worth keeping will respect your boundaries.
There will inevitably be some clients who are more trouble than they’re worth. If a client is persistent in monopolizing your time, energy and resources, it may be time to cut them loose.
As my business grew, so did my fees; some clients were resistant and unhappy, but I stuck to my guns because I knew my worth. Those who knew it too stayed and the others were probably better off elsewhere.
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