Assessing the P.I.T.A. Factor

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David R. Evanson

The Career Advisor, Spring, 2004

Don’t know what “PITA” stands for? It will probably come to you as you read this article about spotting difficult clients.

Just for starters, engineers are the most difficult clients, according to veteran planner Nancy Jones, Upland, Calif. “They never have enough information to make a decision.” Next she says that doctors can be difficult to handle, too. “They get hit on so often that they tune everything out, including the advice you are giving them.”

Wilson, who has been in practice for 20 years, will candidly admit that when she first started, the qualification for a new client was a pulse. Now, with an established practice, she is a little more choosey. Quality of life matters more than money. And if you are at that inflection point in your practice, or can see it around the corner, here are some signals which may indicate your would-be client is going to be difficult to handle, and perhaps not worth the aggravation.

Won’t Prepare. If you have a prospect who comes to a get-acquainted or initial working meeting and has neglected to fill out a background form or bring tax filings — after they were specifically requested to do so – he’s showing a red flag. “This has proven to be a good barometer,” says Jones. “If they aren’t ready for the first meeting, there’s pretty strong evidence that it’s not going to get better as you move forward.”

Likes to Sue. Jones recommends that somewhere in the process of getting to know a prospect, you ask if they have ever sued a financial planner. She acknowledges that there may be instances where a suit is a legitimate course of action, but adds that you want to be cautious with prospects that seemed to enjoy the process or “for the ones that actually brag about it.”

Has Sharing Issues. If a prospect wants to keep secrets, it’s probably not the basis for a relationship you are going to be happy with says Jones. “To do a good plan you need to know where all the assets and liabilities are,” says Jones. If a client looks you in the eye and says, ‘I’m not willing to tell you everything,’ you should probably look them right back and say you’re not the adviser for them.

Lou Stanasolovich, another 20-year veteran, who has also earned high marks from Worth magazine as one of the best financial planners in the country for the past seven years, also has an early warning system that he says has helped him avoid problem clients over the years. Some of his signals.

Dickerers. “If they want to negotiate your fees,” says Stanasolovich, “That’s trouble.” If they want a small break, say $500 on a $14,000 fee, that’s one thing. But if they want $4,000, Stanasolovich’s bell goes off. “It tells me they are not hearing you, they do not respect what you do, and they probably will not change.”

Wham-Bammers. Stanasolovich says he gets the willies about a prospect who doesn’t want to go through the planning process. “If you start to hear: ‘Can’t we just skip all this?’ or ‘Just do what you think is best,’ or ‘Why can’t we just go to an attorney and get a will,’ you probably have a difficult client on your hands.” The problem, he says, is that prospects who want to simply cut to the chase are also cutting off the kind of give-and-take communication that makes a relationship successful, and pleasant.

Disciples of the Popular Press. You want a client sophisticated enough to understand financial planning issues. But according to Stanasolovich , if you’ve got a prospect who gets all his or her information strictly from consumer media, such as Money magazine, or Kiplinger’s they might be problem client down the road. “Reading magazines is great,” says Stanasolovich, “but it can at times mask a client’s lack of desire to really educate themselves about financial planning issues.”

Finger Pointers. Listen very carefully when your prospect discusses their professional relationships. If they speak disparagingly about their previous planner, or for that matter, any professional adviser, it’s never a good sign. “If they believe that others are to blame for everything that went wrong, before long it will be your fault,” says Stanasolovich.

And all too soon after that, they’ll be in someone else’s offices talking about you.