The Tricky Business of Managing Clients

Mitch Anthony

Ross Levin, CFP, a well-known and respected advisor believes that most clients fall into one of four types in their relationship to money.  In the spirit of the season, we’ll explore what makes these clients “tricks” or “treats:”

Relationship clients
These individuals want to develop a long-term relationship with someone they can trust.  They tend to be easy to talk with and relate to.  It is important to spend time listening to these clients.  They want to be comfortable.  They tend to be very good long-term clients and very nice to work with.  They may follow your recommendations, but they want to be involved in the process.  After meeting with the relationship client, summarize the business aspects of your meeting in a letter.  This is helpful in keeping the business end of the relationship moving forward.  Relationship clients are clearly treats.

Fear-based clients
These are typically financial novices.  They may be recent benefactors of an inheritance or busy professionals who are in control of all areas but money.  These clients will be reliant upon you.  They will need to be educated, even if they do not ask for it.  Try to work with them, not just for them.  You have to help them gain confidence in their ability to manage money.  Fear-based clients have the potential to be treats if they are managed properly, but they can quickly turn into tricks otherwise.

Curious Clients
These clients are typically working with you because they are busy.  They will show a great deal of interest in what you do and sometimes imply that they would like to do what you do when they retire from their current profession.  These clients will have done some self-education and have preformed opinions.  You must talk with these clients in great detail about their money beliefs that you may feel are false.  Curious clients will be very good long-term clients if you speak their language and provide support for what you are doing.  As these clients get to know you better, they may begin to resemble the relationship type of client.  Just don’t forget about their need for information and control.  After you have made decisions together, continue to support those decisions through articles that you find and third-party endorsements of your ideas.  Curious clients can definitely be a treat.

Greedy Clients
This type of client usually has unclear, constantly changing goals that are measured by short-term performance.  They may be charming with a high energy level and a quick mind.  They tend to put you on a pedestal at the outset and spend the rest of the relationship trying to knock you off that pedestal.  It’s all about short-term returns with the greedy client.  Greedy clients are tricks and should be avoided at all costs!

Adapted from Your Clients for Life:  The Definitive Guide to Becoming a Successful Financial Life Planner, Second Edition by Mitch Anthony.  (©2006 by Mitch Anthony.  Published by Kaplan Publishing.)

Mitch Anthony is the founder and president of Advisor Insights Inc. and The Financial Life Planning Institute, training companies serving advisors and the financial services industry. He is a contributing editor for Research magazine and his column “Financial Life Planning” appears in Financial Advisor magazine. Anthony has been named one of the financial service industry’s top “2006 Movers & Shakers” by Financial Planning magazine. His radio feature, The Daily Dose , is heard every day on 200 radio stations nationwide. Anthony is the author of several books for advisors, including StorySelling for Financial Advisors , The New Retirementality, Your Clients for Life , Selling with Emotional Intelligence , Making the Client Connection , The Financial Professional’s StoryBook, and Your Client’s Story. Contact him at mitch@mitchanthony.com

© 2007 Mitch Anthony