Dealing with challenging clients

What kinds of clients do you want to work with? I’ve enjoyed most of my clients, but some have been challenging.

I used to take clients for one-shot financial planning consultations until my investment management practice grew to where I no longer had time (or the financial need) to see short-term clients. 

Early in my practice I met with a couple who had more $100,000 on credit cards, and shifted to different cards whenever they could get a better rate. They had defaulted on some of the cards, so the interest rate there was about 25%. They couldn’t afford the interest, let alone pay down any principal. Just talking with them about their finances made me feel stressed. I was relieved to refer them to a personal bankruptcy attorney. 

After advising a few other deep-in-debt-clients, I decided not to see any more. I realized that these clients generally were unhappy to be meeting with me, were hoping for a magic solution that I didn’t have, and didn’t appreciate the advice I was able to give them. I didn’t enjoy going through lists of expenses with them and thought they should be able to do that themselves rather than wasting their scarce money on me. Apparently they agreed, because most didn’t continue after a second session with me, and some didn’t last that long.

Once I had made that decision, anytime someone called for help with debt problems, I declined to see them but offered to tell them everything I knew about solving their problem right there on the phone, no charge. Then I would explain that there were only two solutions: increase income or decrease expenses. If they could find a way to increase income, great! Get a better-paying job, ask for a raise, inherit some money. But most people have limited options here, so unfortunately that leaves only cutting costs, and they simply needed to go through their expenses and figure out what to eliminate. 


My first money management client wasn’t a great fit, but I thought I needed to start somewhere. Denise was in her early 30s and was desperate for help with the $100,000 she had gotten in her recent divorce. She seemed perfect to practice on as I learned how to work with my financial services provider and manage portfolios. 

Given her financial inexperience, I thought Denise would rely heavily on me for financial advice. Perhaps I did not give her a clear enough explanation of our roles and what I expected from her. But my biggest mistake was giving her a checkbook on her new investment account. Periodically, my broker-dealer would call — usually just before market close — to tell me that a check had been presented with insufficient cash to cover and ask if I wanted to sell something immediately to prevent a bounce. When I realized I could not convince her to talk to me before writing a check, I gave up and started keeping more cash in the account. 

For some time, I couldn’t get her to tell me what she was doing with the money she took out. Eventually I learned she was giving money to her new boyfriend and wasn’t talking with me first because she knew I would tell her not to. An account that small goes down quickly, and before long I was calling her to say she no longer needed an adviser. I transferred her account to the retail side for her to handle herself.

After that, I told clients to call or email when they needed money transferred to their bank accounts — no investment account checkbooks, so they had to go through me. A few learned to order their own disbursements online but most were happy to have me do the work for them. 

[More: Top advisers know which clients are worth keeping, and which to let go]


“Do you happen to know what Myers-Briggs personality type you are?” I had been practicing a few years when Callie emailed me this question. She was a single mother with little employment income but substantial family resources, some of which were now under her control. She had been trying to decide whether she wanted to work with me or another investment manager. According to her, we both seemed very competent.

Myers-Briggs has four personality attributes with two possible choices for each, giving a total of sixteen personality types. She reported that she was an ENFP (extroverted, intuitive, feeling, perceiver). I replied that while I had never done formal Myers-Briggs testing, I had tried one of the short versions on the internet and was confident I was an ISTJ (introverted, sensing, thinking, judging) — the exact the opposite of her in each of the four attributes. (ISTJs like facts and details, think logically, and are organized and good at planning.) 

“How do you feel about that?” I asked her, trying to appeal to the intuitive emotional aspects of her ENFP personality, but thinking that I might be just what she needed. “Maybe we’re a perfect fit (you might want a planner who brings perspectives that complement your own). Or maybe experience tells you that ISTJs don’t work well for you?”

Perhaps my competitor had a more appealing personality type. In any case, I got a very short “no thanks” email back from Callie. I did think I might have brought her some useful analytic skills . . . but I also thought she might have spared me from a difficult working relationship.

[More: Communications glitches between advisers and clients]

Michael Broad is a financial planner and investment advisor in Newton, Massachusetts. Got a good client story or problem you’d like to see in a future column? Email Michael Broad.

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Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.

Andrew Vincent
Andrew is half-human, half-gamer. He's also a science fiction author writing for BleeBot.
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