Managing Client Interpersonal Dynamics

Beverly Flaxington

Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues.  To submit yours, email us here.

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Dear Bev,

I run a high-end family office firm. A couple of families are dealing with significant interpersonal dynamics. In one case, I fear a client’s son is emotionally unstable and could be harmful to someone. In another case, I have seen unnecessary confrontation among siblings.  I am not trained in psychology, and I am at a loss as to what to do.  I need to do something but I am stymied about what it should be.

Name withheld

Dear Advisor,

I give you great credit for caring so much about your clients. Your note has an undertone of worry, and it’s clear you don’t want to just sit back and watch them work it out.

Don’t play psychologist. You have a role, as financial expert and advisor, and you don’t want to compromise that by taking on the role of mediator in these issues. But, I agree with you wholeheartedly that you can’t stand by and do nothing. Here are a few suggestions.

Knowing that these issues are going on with at least a couple of your families, consider an event (either in person or via webinar) and invite an expert in to talk about things like this objectively. They could address difficult relationships in family and the impact on money, give resources for families who have mentally unstable members that need help, and talk about the difference between a psychologist and a psychiatrist – just as a few examples. Sometimes just bringing up the topics and giving people information gives them a path forward to get more help.

You could hold family off-site meetings. Make this a regular part of your practice and tell clients you are doing it annually. This is where the whole family gets together to set missions and goals, and agrees on family ground rules. I recommend bringing in an outside facilitator for this. Many of the issues you mentioned might come up at this meeting, which would then make it easier for you to address them with the family more directly.

Start talking about these issues in your newsletter or other communications with your clients. Again, you know it’s happening but clients may not know you know, so let them read about ideas and objective information that could help them. If they think you are knowledgeable about what they need, they will start addressing it with you more proactively and reaching out for your help.

Don’t give up, and do continue to care.

Dear Bev,

What’s a reasonable increase in revenue in one year? My new partner is saying we could double our revenue in one year. Is this even possible? I don’t want to be a naysayer, but I don’t want to set us up for failure either.

Beth K., Texas

Dear Beth,

Many questions I get like this I have to answer with an emphatic, “it depends!” I have seen advisors do exactly this – double their revenue, more typically within two to five years, and I have seen advisors increase only 5% or 10% annually over a five-year period.

It depends on the firm dynamics: how many referral opportunities are sitting in your client base, how well known you are and how much marketing you are doing, whether your client servicing can handle an abrupt increase in clients, and whether people in the firm are willing to work toward this goal.

The question I like to ask is, “Why?” Why are you looking to double – it can’t be just about the money. What benefits would accrue to your firm from this increase and what kind of burden would it place on your staff? It’s best to set quantitative and qualitative goals – what kind of culture do you want? How do you want your employees to talk about your firm? What do you want clients to think about you? From where do you want the revenue to come?

Instead of just aligning with a number and jumping on that as your goal, have a serious talk with your new partner about the firm’s goals. Be sure you are in agreement with the what, the who, the how and the why. I have found over time that it gets de-motivating to focus on a number just for the sake of a number. It doesn’t take into account the holistic nature of the people and the firm. If you can do more holistic planning and look at the variables and the subjective pieces, you might be able to answer the question you posed to me more easily. What’s right for your firm and your staff? That’s the real question.

Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995; in 2008 she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers.  She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).

She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including the Wall Street Journal,, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.

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