When you first started your financial services business, you likely were thrilled to get new clients - any clients. Keeping money coming in the door is the first priority and a dollar is a dollar.

Over time, however, you will notice that there are clients you look forward to seeing and clients who make you cringe every time you have to deal with them. The good clients will undoubtedly have some common characteristics: they're pleasant to deal with, undemanding, appreciative of the work you do, and they pay on time. On the flip side, the disliked clients often complain, are price-sensitive, frequently pay late and never refer new clients to you. Clients like this often take up an inordinate amount of your time and energy for the money they bring in.

SEE: How To Get Referrals

Think for a moment about what you could do with all that time that you don't have to deal with problem clients. You could be out bringing in new good clients. You could be taking more time to strategically plan the future of your business. You could be relaxing more instead of dreading your next client meeting. While it may not be a concept you have considered before, it is not only perfectly acceptable, but also healthy to prune out the bad clients.

Separating the Wheat from the Chaff

How does one fire clients? The first step is identifying them. Start by making a list of all of your current clients. Develop a rating scale. For example, you could use "A" for your best clients, "D" for your worst and "B" and "C" for those in between. The goal is to shake off your "D" clients.

There are several ways to fire the clients, but it can be as simple as sending them a letter, letting them know that you are paring back your client list and that their needs may be better met with other advisors. You can even provide them with a list of other advisors and their contact information; just don't give out the information for advisors you have a close relationship with - you don't want to make your problem clients theirs. Always stay professional; this is not the time to tell them what horrible clients they are.

In my own financial services practice, I held a weekly team meeting where my staff had the opportunity to nominate a client to be fired. I quickly realized that the frustrations that I was having with certain clients was shared by my staff. Not only did these meetings end in letting go of problem clients, they also resulted in boosting staff morale.

The Next Step
Make a concrete plan for the time that you have now freed up. If your main goal is to replace the revenues that you just kicked to the curb, outline the steps you will take to bring in new business, such as going to trade shows or sending referral requests to existing clients. Now that you know who your good clients are, find ways to attract more of them. For example, if you determine that most of your best clients have investment portfolios over $250,000, target similar potential clients. If you want to spend more planning time, carve it out of your schedule and stick to it.

The time that you take to analyze your current client base and prune out the dead wood will both boost your bottom line and lower your blood pressure. If you have staff, it will result in higher overall productivity.

The Bottom Line
Reviewing your client list and firing those who take more of your time and effort than others for the revenue they contribute is a great way to improve your bottom line. It serves two main purposes: to get rid of problem clients and to make room on your client roster for satisfied, well-paying clients.