Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Dear Bev,
I have to fire an investment advisor working for me. There have been some complaints from clients and employees that I can’t ignore any longer. But there are clients who really like this guy. They won’t be happy about this change. What do I do to ensure I don’t lose these clients?
Name withheld
Dear Financial Advisor,
Firing someone is never easy. I have had to do it far too many times in my own career, so I know the complications firsthand. It is especially difficult when the person is linked to clients and assets.
Have you taken the necessary steps to protect yourself from a lawsuit by gathering specific dates and incidents, so that you are sure you have all of the information you will need to discuss the reasons with him? If you have not consulted with an HR professional, you want to do that before you proceed. Having an outside person review your documents and plan with you can be very valuable.
What kind of legal or employment documents do you have in place? Has he signed a non-solicitation or non-compete agreement? Where are your vulnerabilities regarding his poaching of clients? And, have you had others in the organization in contact with these clients? Too many firms rely on the one-to-one client relationship with only the advisor and then find themselves in a position of treating a long-standing client as a “new” client in getting to know them. This has its pros and cons, of course, but you don’t want clients to feel that the advisors now working with them are strangers. It could give them reason to look elsewhere for an advisor. Hopefully you have established some continuity and extended relationships to make transferring clients to another staff member easier.
It’s always unfortunate when the relationship with an employee has to come to an end but it sounds as though in your case it is necessary. Be sure you are communicating well, documenting even better and thinking about the fallout before you have this difficult discussion. Most of the time a termination goes poorly is because the terminating manager didn’t plan well or communicate effectively. Don’t make these mistakes.
Dear Bev,
When a client calls and complains about an advisor but you know the advisor is acting in the client’s best interest, how do you respond?
Frank A., New York
Dear Frank,
Dig for more information. Understand exactly where the client is coming from and try and get their perspective. I call this “getting behind another person’s eyes.” While you may know the advisor was “right,” what does the client see? What do they care about and how have they interpreted this situation? Before you rush to absolve the advisor, seek to understand the client’s position. Ask questions and practice good active listening to learn. Don’t defend the advisor, or debate with the client; show that you are interested in learning and want to investigate before you respond.
Next, I would follow through on the promise to investigate. Don’t put the advisor on the defensive (especially if you agree with them) but share that the client complained. Make sure you were able to obtain enough context that you can fully explain the client’s viewpoint to the advisor.
Understand with the advisor as well. Why did they do what they did? Why was there a disconnect between the advisor and the client such that this client felt complained to call you? Again, don’t berate or threaten the advisor; seek to understand his or her position, too.
Once you feel confident you understand what happened and why, respond back to the client. If you still agree with your advisor, explain why. If you don’t, apologize to the client and have the advisor call and apologize also. Understand what remedy will ensure the client knows you heard and responded to the issue that was raised. There are few things worse than taking the time to log a complaint but then never hearing what the follow-through or follow-up was as a result. Make sure the client knows you listened and wanted to address the issue.
Hopefully the advisor learns something from this too and pays attention to similar situations in the future with this or other clients.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995; in 2008 she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including the Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
