How to handle loose-lipped clients

You need to learn the details of your client’s life to create a personalized financial plan. So in addition to being her advisor, you may soon become viewed as a friend. But if the client becomes too comfortable and shares too much, it can create an uncomfortable situation.

For example, she may want to discuss personal affairs that aren’t relevant to your job, like conflicts with other family members that you may also have to work with.

“Part of our job is to be empathetic, but we also have to set certain boundaries about what conversations we want to engage in,” says David Brown, a partner at Al G. Brown & Associates in Toronto. “I’m very wary about getting involved in areas I shouldn’t be involved in.”

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While a comprehensive understanding of your client’s affairs is necessary to create her plan, you need to regain control of the meeting if she speaks beyond the purview of your professional relationship. Here are four steps to get your client relationships back on track.

1. Enforce professionalism

One way to mitigate the possibility of a client getting too personal is to establish and maintain a professional relationship from the get-go, says Brown. “If they feel they’re coming into a professional establishment they’re going to behave themselves.”

How the client is addressed, and even how you dress can all be key factors in being perceived as an advisor rather than as a friend.

Brown suggests offering your client something to drink when she arrives, then bringing her to the meeting room and introducing the agenda.

And, as you’re building a professional relationship with a new client, Brown suggests overdressing. “Unless I know the demeanour of the person, I’m always trying to be more formal-looking than the person. But if the second time the person comes in, they don’t have a tie, I’ll adopt that style as well.”

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And hold your client to high professional standards, too. Brown once fired a client for yelling at his colleagues on the phone.

“I called the person back and said, ‘I appreciate the business you’ve sent us, but if you want to continue, you can’t swear at our support people. There are certain terms on the basis of our relationship that you have to stick to and I have to stick to,’ ” he says.

Brown lost the client, but he says it was worth it to maintain a professional environment.

2. Use stories

Jolene Laing, an associate director of wealth management with ScotiaMacLeod in White Rock, B.C., says clients you’ve been working with for years are more likely to get personal.

“Most end up falling into not quite the friend zone, but they know they’re more than business acquaintances.”

In such cases, Laing may let a client talk more openly. “As long as the conversation is respectful and relevant to what’s going on in their lives, I don’t have any problem discussing that because there’s a lot of valuable information.”

But if a client talks at length about something personal and irrelevant to the meeting, she says you may need to stop the discussion.

Laing says, “I personally am not comfortable with cutting them off and saying ‘I don’t want to hear it.’ ” Instead, she’ll try to change the direction of the conversation. To do so, she may use a story or try to relate to the client.

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For example, if a client is complaining about her divorce, Laing says, “I’m divorced myself, so the change of direction went along the lines of ‘I know how you feel, I went through it myself. And unfortunately it’s not pleasant, but it’ll be interesting to see what a year from now looks like.’ ”

Then, she brings the conversation back to the client’s portfolio. She’ll try to keep her tone positive and professional, in order to comfort the client while re-establishing a business relationship.

3. Stick to an agenda

If the client is talking about personal matters you don’t feel comfortable discussing, you can remind her of the meeting agenda.

Laing says, “It’s a good way to refocus because if a client’s in for a review and it’s taking too long to get off the personal negativity, there’s no problem refocusing them by saying, ‘We only have 45 minutes left, and we have six things to go over.’ ”

Brown suggests remaining empathetic while also sticking to the agenda. “We’ll say, ‘These are the things on my agenda we need to discuss in the next hour. [If there are] things on your agenda, we’ll make sure we cover them if they’re important to you, but I’d like to stick to these items.’ ”

And if the meeting runs over time, as long as the topic the client wanted to discuss was important and relevant, Brown will promise to discuss it at the next meeting or schedule a follow-up call.

4. If all else fails, be blunt

If redirecting the conversation using a story or a reminder of the agenda doesn’t work, then you may have to be blunt.

For instance, Brown will say, “I understand what you’re saying and I empathize, but it’s not an issue that’s relevant to the project we have at hand now.”

And what if the client keeps returning to a personal subject like a family conflict or a divorce? “At that point, I normally shut it down [by saying] ‘Look, what happened personally is unfortunate but it has nothing to do with me,’ ” says Laing.

If she also works with the person her client is complaining about, like an ex-spouse, she’ll say, “I have to have a working relationship with both of you. I’m sure you wouldn’t appreciate me discussing it with your [spouse,] so by the same token I’m not going to discuss it with you.’ ”

Then, if the client doesn’t agree to change the subject from her personal conflicts after you’ve been clear about your discomfort, Laing says you may not want to keep her as a client.

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“It depends on how important the client is, but there’s only so far ethically you can let the person go. Then you’d think if your relationship with them went sour, would they be the type of person who would spout off about it everywhere. And then you wonder if that’s the kind of client you want anyways.”

Brown notes in all cases, keep opinions to yourself, because while you’re required to keep client discussions confidential, the client has no such obligation.

“I always believe you shouldn’t say something in private that you wouldn’t want to be heard in public. [The client] could tell me whatever [she] wants to tell me; I have an obligation not to pass that on to another person. [She], on the other hand, doesn’t have that obligation.”

Steer away from uncomfortable conversations

Jolene Laing, associate director of wealth management with ScotiaMacLeod, shares real examples of how she dealt with awkward client discussions.

Problem: A divorcing couple, each of whom remained clients. One spouse had nasty things to say about her ex-husband.

Solution: Laing let her rant for a few minutes. Then she said, “For the sake of fairness, you wouldn’t expect me to listen to your husband or agree about things like this if he had things to say about you. From a professional perspective, let’s just keep it to business for now.”

Problem: Another couple is divorcing, and both remain clients. The husband offers the wife an amount of money for spousal support. She comes to you asking whether she should take the money as a lump sum or a monthly amount.

Solution: “That was probably the most awkward situation I’ve had, but it was a relevant request. As long as you’re within the bounds of fiduciary duty and you’re being ethical in the treatment of both clients, you’re good to go.” So Laing did a pension calculation, which indicated that the monthly amount would have been more. She told the wife, “If I were you, I would take the guaranteed income.”

Problem: An adult child says his parent, who is also your client, should gift him money before death to avoid taxation. The child wants you to convince the parent to do so.

Solution: She’s had to deal with this situation on two different occasions, and was straightforward in both cases, letting them know she wouldn’t get involved since the parents were also her clients. “If the family wants to discuss that, have at it, but that’s not something I’d ever suggest to the parent or any other family.”

Problem: The patriarch of a family, who was her client, passes away and his two children disagree about what to do with the family home. One child wants to keep the asset as a rental property; the other wants to sell or be bought out. Each ask you to intervene.

Solution: In this case, Laing let each know that she had nothing to do with the outcome. She told them, “In the grand scheme of things you need to decide together what you’re going to do with it and good luck. Frankly my opinion doesn’t matter, and it’s not relevant.”