Offboarding 101: How to Say Goodbye to Not-Fit Clients

What do we mean when we talk about advisors intentionally off boarding not-fit clients?

Off boarding is a strategic planning solution for advisors either working with too many clients or working with clients who no longer fit into a firm’s ideal client profile and drain a firm’s capacity to provide quality service.

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This process, when done properly, involves transitioning clients from your own firm to another firm or service provider who can better cater to your clients’ needs. These providers could include a credit union or local bank that offers services the client needs, the retail side of the company who holds your custodial accounts, or even a more tech-savvy company that offers low-cost investment management and DIY planning tools. Part of creating a positive offboarding experience, that can produce referrals, will be pointing your transitioning clients in the right direction based on the information you have gathered working with them over the years.

At the end of the offboarding process, you will no longer be servicing the transitioned clients, resulting in less stress, a more streamlined brand because of fewer segments in your service offerings, and increased capacity to fill with more of your ideal clients.

Of course, offboarding can be a sensitive subject. Because an advisor is identifying that a client would be better suited with someone else, it can feel a little like “breaking up”; but, when done tactfully and with genuine concern for a client’s well-being, it can actually garner a positive response rather than a negative one. Letting a not-fit client know that there is a better solution out there for them can actually bolster your integrity and even lead to referrals from the offboarded individuals!

When Does Offboarding Make Sense?

  • When Your Client Base is Too Diverse: In a firm’s infancy, it may be necessary to take on every “Tom, Dick, and Harry” knocking on the door in order to start generating revenue and practicing what you spent so long preparing for—actual financial planning.  The result is a highly diversified client base and a hodge podge amalgamation of services being offered to each. Not only does this put a strain on client management, since each client is being serviced in such different ways, but it makes it difficult to train new staff to handle each of these tiers in a way that is both effective and creates a positive client experience. Process and capacity-wise, having too many service tiers decelerates the firm’s ability to grow, stifles the staff’s ability to improve their expertise, and lowers the quality of service and meaningful interactions. This is an indicator that it may be time to offboard those clients that no longer fit the firm’s ideal client profile.

See Our Related Article: Client Segmentation Allows You to Grow and Prosper

  • When You Need to Strengthen Your Brand: Offering too much to too many dilutes your brand. If you service anyone and everyone in your community with odd services here and there, no one will really understand what you do. No one will be able to identify you for your specialty. Essentially, without a clear brand, it’s very hard to be identified, remembered, and referred. Refining the services you want to offer and to whom will simplify your marketing efforts, earn you the types of referrals you actually want to receive, and ultimately increase your profitability.

Who Should You Offboard?

As firms evolve and future directions come into clear view, it becomes apparent which clients work and which don’t. Perhaps the client isn’t a good fit because they are seeking services you no longer provide (or don’t want to continue providing). Or, a client may be a “not-fit” because they require too much of your time and energy and, additionally, aren’t contributing much to your revenue. Whichever the case, it doesn’t take much more than a “gut” check and a little math to decide who to transition out of your client base.

Why Should You Consider This for Your Firm?

Offboarding simplifies the firm’s processes, creates capacity, strengthens the brand, decreases stress, and improves overall company culture and morale. But the most fundamental benefit to offboarding is that it allows the firm to evolve. The firm moves away from servicing anyone and everyone (which, admittedly, may have been necessary in the firm’s infancy) to servicing clients that are not only looking for what your firm offers, but value what it offers and are willing to pay the full fee you are charging without draining you of your energy and contentment in the workplace.

Offboarding not only benefits the firm, though, it benefits the transitioning and existing clients, as well. Because financial planning is a long-term fiscally based relationship, it is important that an advisor and client work well together and are both happy with the arrangement at hand. Even if a client has a high amount of investable assets, doesn’t mean an advisor should service them. There is no client’s net worth that should buy an advisor’s peace of mind and workplace satisfaction.

When the advisor is happy and positioned for growth, the remaining clients receive an improved client experience and the firm no longer has to worry about client retention. The opposite, in fact, occurs—the firm will see an increase in qualified referrals and can spend less in the marketing department. The added bonus, then, too, is that the firm is able to attract more qualified staff and associate advisors.

See Our Related Article: Staffing: Attracting The Right People to the Right Roles

How to Begin

When you decide that offboarding might be the right solution for your firm, the first step will be to decide who you will offboard. As mentioned above, this involves taking a look at the client base. Start with the lowest tier clients and head up the ladder, doing a “gut check” as you go along. Identify which of the clients (a) drain your capacity time or stress-wise, (b) could be better serviced elsewhere, or (c) are company “culture killers”, meaning they are in constant need of attention and put a strain on day to day firm operations.

With this in mind, you’ll want to decide which options you will offer to each. Will you recommend they transition to a company like Facet Wealth or Garrett who provide comprehensive financial planning for households with less than typical minimums in investable assets? Or will you recommend a firm like Betterment or Vanguard that specializes in investment management at a lower cost, albeit with less personalized service? Having suggestions or referrals for your transitioning clients will not only help them find their “right fit” when they leave your firm, but it will bolster your integrity and reputation as a professional service provider in the community at large.

Of course, this is just the beginning. The entire process will take between three and six months to complete from beginning to end, but the time equity invested will return exponentially in the form of profitability and long-term growth potential.

Interested in learning more? CLICK HERE to listen to Jen’s guest appearance on the Becoming Referable podcast where she answers Steve Wershing and Julie Littlechild’s questions about client offboarding.



PS. Want to talk more about how I help businesses make progress and operate better? Click HERE. Want to receive my monthly solutions email? Click HERE.

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