You probably have Type A clients — ambitious, motivated and organized, but sometimes also demanding, critical and difficult. How do you respond when a client’s hard-driving personality becomes a problem for your relationship?
Rethinking65 spoke with financial advisors to get their stories and sometimes surprising takes on how to deal with problematic clients — and when to “fire” them.
‘What Makes Type A Clients Happy?
Like many advisors, Michelle Hundley, CFP, describes herself as Type A and said that is the secret to her success with those clients.
“I find Type A clients truly appreciate a quick response time, even if it is an acknowledgement of an email with a promise to circle back within a certain time frame,” says Hundley, who co-founded Trio Wealth Management in Great Falls, Virginia, a year ago.
Matching a Type A client’s preferred style of communication and being maximally proactive helps them relax, she said. “Nothing makes a Type A client happier than being out-Type A’d,” says Hundley, who previously worked with Goldman Sachs PFM for 10 years and also served as a lawyer.
James Brewer says clients with Type A personalities can be a problem or a boon, citing three as examples.
“One I fired, and one is my top revenue client,” says Brewer, CFP, AIF, CFSLA, the founder of Envision Wealth Planning in Chicago.
Two female clients started out difficult and critical. “Early on, they were questioning contracts, questioning strategies, just very demonstrative in their approach,” Brewer says. “But I have a process where I educate my clients. They get to see my values, my integrated, evidence-based approach to investing. And in both cases, over time, they realized that I did have their best interest in mind.”
But that same approach failed with a third Type A client whose competitive nature remained a problem, says Brewer. That man consistently questioned how Brewer was managing his accounts, claiming that his workplace retirement account was achieving higher yields. At the time, the client was working toward a master’s degree, which Brewer speculates might have contributed to his attitude.
“He’s a pretty smart guy,” Brewer said, explaining he thinks the client believed himself to be Brewer’s equal in financial knowledge.
The client questioned details of his investments, like a certain bond in a mutual fund Brewer had chosen for him. “And I would come back with very thoughtful responses. Everything was amiable, even jovial at the beginning. I believe that I was respectful of his education,” Brewer adds.
Yet the man persisted in claiming Brewer’s investments lagged his retirement account. “Eventually, I showed him the returns I was giving him were better than the returns that he was getting in his workplace plan by a wide margin” — a 200-basis point difference, says Brewer. But the man would not back down, making incorrect comparisons between the accounts. At that point, Brewer says, it was apparent that the client was simply trying to win an argument. And Brewer did not have the time for that.
“So, I emailed him and said in as nice a way as I could that if this was not working out for him, that I would recommend that he manage the money himself, and I would not be offended if he took his money,” Brewer says. “I felt like he bought a Morningstar subscription, and he was trying to show off.”
Brewer remains perplexed. “Using the same methodology with all three people, two out of three are happy,” he says, adding that the two have increased the amount of money they are having him manage. “But the other person, he was just complaining more and more and more.”
‘The Engineer Type Doesn’t Bother Me’
Monica Dwyer, CFP, another self-described Type A, says the personality gets a bad rap.
“I don’t know that Type A is such a negative thing,” says Dwyer, a wealth advisor with Harvest Financial Advisors in Cincinnati. “I’m driven, I have goals. But I’m easy to get along with.”
“Type A — the engineer type — doesn’t bother me,” she adds, noting that about half her clients could be classified as Type A. “It’s when people get maybe unruly or difficult.”
However, dealing with difficult clients — or more accurately, clients coping with the difficult situation of divorce — is a big part of her business, says Dwyer, who also is a Certified Divorce Financial Analyst. “These are, generally speaking, really good people who are just going through a really difficult time in their lives,” she explains. “And the emotion and the way that they sometimes get stuck in their negotiation can make it challenging for us as advisors to help them. But we recognize that it’s not that they have a difficult personality.”
One of Dwyer’s problematic clients was a recently divorced woman who had trouble making decisions — starting with whether to hire Dwyer. “Indecisive ones are just as difficult for me as a decisive one,” she says. After extensive preparatory work with the woman, Dwyer couldn’t get her to commit one way or another. Ultimately, she gave the client a deadline. “I had to say, ‘Listen, you need to make a decision. I can’t do anything unless we move forward,’” Dwyer says. The woman did come on board and remains one of her clients, she adds.
Dwyer says client communication is essential, and its absence can be a deal breaker. She recently parted ways with a client who avoided discussions with her. “They want somebody who’s going to tell them, ‘You need to do X, Y and Z,’ and not give them any choices,” she said. “And they don’t want to spend very much time with their advisor, and they don’t want to have a personal connection.” But “I need people to engage with me so that I can figure out what’s best for them.”
Dwyer’s boss told her this client no longer wanted to work with her. “I’m actually relieved, because I don’t think I’m the right person for them,” says Dwyer. “I’ve been thinking about transitioning them to another advisor for about a year.”
Similarly, Dwyer had trouble with a couple she was advising. “Every time I would meet with this couple, the wife was really nice, but I didn’t really understand the husband. I couldn’t connect with him on a personal level, and I didn’t really understand what he wanted from me. It made our conversations kind of awkward.”
The “final straw,” says Dwyer, came when her firm discovered it had been undercharging the couple, and the husband refused to pay the higher fee going forward. Dwyer told him that he didn’t appreciate what her firm was doing for them, and they were in an awkward relationship, so, “we think you’d be better served elsewhere,” she says.
Dwyer parted ways with another client who ignored her counsel. “We would give her investment advice, and she never took the advice,” she said. Dwyer repeatedly urged her to get out of certain investments and buy into others — to no avail. “Her performance was abysmal because she continued to want to hold on to her legacy names. And I finally told her, ‘Why are you paying me? You’re not taking any of my advice, and it doesn’t make sense. You really should self-manage and stop paying the 1% fee,’” Dwyer recalls saying. “That was a tacit way of firing her.”
Raise Their Fees
Robert Persichitte, CPA, CFP, another self-professed Type A, has an accepting but practical take on Type A clients. When he shifted careers from auditor to financial advisor, he was warned, “Stay away from engineers. You don’t want smart clients; they are too much work,” says Persichitti, a financial planner at Delagify Financial, Arvada, Colo.
But most of Persichitte’s friends were engineers, so he “reluctantly” took some on as clients. To his surprise, he found that their Type A personalities meshed well with his. “We spent hours overanalyzing things in ways that I found very enjoyable,” he says.
“Type As act like auditors; they have a great deal of professional skepticism that can be misinterpreted as rudeness,” Persichitte says. “People often take their questioning nature as condescending or distrusting, but it’s nothing personal. They want to be sure they are getting value for money and understand what is happening in their plan.”
Persichitte says that while he’s never had to fire a Type A client, he’s had to raise their fees. “The amount of time spent didn’t line up with their fees,” he says. “That’s a big reason why I work entirely on a fee-for-service basis. They take the time to understand my value. That, of course, costs me time, but it also gives them the benefit they are looking for.”
Persichitte’s advice for other advisors: “Set pricing appropriately for Type A clients and give them the level of service they expect for the money.”
Ed Prince is a writer for Rethinking65. In a four-decade career in journalism, he has served as an editor with many of New Jersey’s leading newspapers, including the Star-Ledger, Asbury Park Press and Home News Tribune.
Most women are comfortable taking risk in their investments and cite patience and discipline as their top investing strengths, a Schwab survey reveals.
