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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One of my employees has become overly friendly with one of our larger clients. They have gone on vacation together, out to dinner quite a bit and share hobbies and other activities. This concerns me because I know when people are friendly they can share too much information, or if the relationship turns sour we might lose the client – or the employee. I don’t feel I can tell my employee she “can’t be friends,” but I also feel this isn’t good business for the firm. I value this employee but if I let her go, the client could pull their $5 million account. What advice do you have?
Dear Financial Advisor,
I assume you don’t have any policies in place around fraternizing with the clients. Advisory firms look to build relationships and to know clients really well, but it sounds like this particular relationship has become concerning to you for a few reasons.
You didn’t say if this employee is actually the advisor working with this client, or if it is an employee elsewhere within the firm. The course of action might be a bit different depending on the nature of the relationship, but I’ll offer some general thoughts.
If you don’t have a policy in place, it’s hard to legislate human behavior and relationship after the fact. It might be that your employee and this client have a synergy together and genuinely enjoy one another. But, there are many potential downsides. The biggest problem is that there could be a perception that this client was given preferential treatment on something, or generally benefitted from the relationship.
Without a current policy to fall back on, the best course of action is to have a sit down and discuss your concerns with your employee. Convey to them that you support their right to do whatever they want in their own time, but that this is an important client and you are concerned about the impact on the firm.
Explain that how the relationship is perceived creates a problem. And, if you examine your own feelings and find you feel a bit “left out” – i.e., that the employee knows more about this client than you do and this makes you uncomfortable – share that, too. Be as open and honest as possible with your thoughts and concerns. Your employee may not even realize the relationship worries you. If you share your perspective, your employee could become more cautious in their approach, in what they share with the client and in how they behave in the office about the relationship.
Put a policy in place, if you are worried about this happening in the future. State that relationships of a deeply personal nature with clients are discouraged. Carefully word this because often an advisor attends a retirement party for a client, or a funeral or even holds a family meeting to talk about issues. There are many times having a personal relationship makes sense and is beneficial, but this one crosses the line if it makes you uncomfortable. Consult with your HR staff or an outsourced HR firm on how best to write a policy that works for your firm. I know many firms have these policies for nepotism or dating a co-worker, so it is appropriate to have one for employee-client relationships, too.