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Early Warning Signs You're Losing a Client

Jul 8th 2014
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Everyone loses clients. You've seen the statistics. Clients and heirs often change accountants, attorneys, and advisors after a death or divorce. That's understandable. What about ongoing relationships when the client pulls the plug? Are there early warning signs?

It's an unfortunate fact that some of your clients may perceive you as a necessary evil, similar to visiting the dentist. Clients don't know about your forward thinking and background work that keep them out of trouble. Unlike financial advisors who deliver increasing statement values when the market does well, you tell clients to write checks. Like financial advisors, there are often competitors in the background telling your clients they can do better if they change accountants. You have to be on top of the relationships to keep them.

Early Warning Signs

Corporate relationships can be straightforward. They announce the firm will be reviewing relationships. They include your firm in a request for proposals.

Individual relationships are more complicated. Here are a few warning signs:

  • Communication patterns change. A rhythm of regular monthly calls becomes quarterly calls. You find yourself initiating communication. The client seems detached and uninterested when previously they were engaged. They are establishing distance.
  • Clients now ignore advice. Previously they followed your suggestions. Now they take it under advisement. They indicate another actor offstage must be consulted. If the client directly inserts another person who they designate as a "proxy", who must pass approval and will then advise the client to act, the relationship is at severe risk.
  • People get emotional. Your client suddenly shifts to excessive complaining. They complain about fees and watch every penny. They complain paperwork should have arrived sooner. They feel you should have anticipated the impossible. They are unhappy.

There Are Solutions

We don't need thunderous early warning signs. People involved in social relationships intuitively know when something is wrong. You can get out in front of the problem.

Meeting all the players goes a long way. In most relationships we have a contact person who is the decision maker. We focus attention on them. In some cases the spouse feels devalued and excluded. This is a big problem for financial advisors. In 2012 Forbes ran an article referencing a Fidelity study indicating 70 percent of widows fire their financial advisor within a year of their spouse's death. No one needs to die for you to get fired now. The neglected spouse can be openly hostile to you, their spouse's accountant. This takes place in the background with barbs like: "It's your accountant on the phone. I don't know what you see in him." or "What does she do for us, anyway?" They can make your client's life miserable.

Borrow a technique from a Texas financial advisor. Call their home at a time you know the primary client will be out. Speak with their spouse and explain: "We've never met. We need to meet. Maybe I'm not the right accountant for you."

Schedule a meeting at the client's home with both parties present. Study up on every detail. Focus 50 to 75 percent of the attention on the spouse. Speak in plain English and define terms. Wrap up by explaining decisions should be based on knowledge, not emotions. You will give you enough information for them to make knowledgeable decisions. It's very difficult for the spouse to remain adversarial.

You learn from past mistakes. When calling the client, if the spouse answers, explain the reason for your call and the pending issue at hand. It's likely they will defer to your contact person anyway.

When the client is establishing distance, the face-to-face meeting makes sense. A Boston area financial advisor found a solution, which should transition smoothly to the accounting profession: Choose a pleasant, neutral location. Taking the client and their spouse out to dinner is ideal. Yes, this costs money, because these are not billable events. Rather, they're investments in retaining future revenue. After getting settled, ordering drinks and choosing entrees, look them both in the eyes and say: "Things haven't been good lately." Stop talking.

Like a locomotive gathering speed, the clients will erupt. They will loudly complain about everything on their mind. Sit quietly. Don't explain. Relate to the problem. Acknowledge it's a serious concern. Draw them out. After the storm subsides you might mention a mitigating factor or two, but not in an argumentative way.

Finally, look them in the eyes and say: "What can we do to move forward?" It's extremely difficult for the client to say: "We can't" or "I'm leaving" after you have initiated the meeting and allowed them to get everything off their chest. It's not a pleasant meal, but it usually ends happily.

You might deliver bad news from time to time and tell them to write checks, but you have a lot going for you. Helping them avoid trouble has a value. Meeting face to face or getting all the players can often resolve the situation.

About the author:
Bryce Sanders is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania. He provides HNW client acquisition training for the financial services industry. His book "Captivating the Wealthy Investor" can be found on


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