Sales & Marketing | 08.13.25

Client Segmentation Strategies Keep Advancing, but When Does It Ever End?

by: Rich Blake

Divvying up a financial advisory firm's client base never used to be all that complicated — rainmakers focused on the biggest accounts and the rest just sorted itself out somehow.

As the decades passed, and portfolios of separate stocks turned into managed accounts comprising mutual funds and exchange-traded funds (ETFs), wealth managers turned to demographic buckets. Next up there came the “value tiers” in which clients were assigned a revenue quotient.

These days, cutting-edge, AI-abetted platforms can carve hyper-personalized mini-channels as well as provide tools for creating relevant content and communications, but even some younger advisors must be thinking client segmentation is getting too complex. Yet in the digital age, client service trends keep constantly evolving in unique and unprecedented ways, across all industries, well beyond the investment advisory field.

'Treating Clients as Individuals'

All kinds of businesses are "increasingly turning to advanced strategies to segment clients effectively," said Asaf Darash, founder and CEO of Regpack, an online payment management platform.

At some point, consulting firms and vendors (e.g. client relationship management platform providers) figured out that treating all clients uniformly, while conceptually practical in a basic, democratic kind of way, is ultimately just not effective.

In practice, a level playing field can actually hamper resource allocation, Darash has said.

But do we really need the tiers?

Darash asserts that by aligning resource allocation with revenue generation, businesses can cultivate stronger client relationships and spur growth as trajectories are closely tracked and stoked in a timely, special way.

"In a world where personalized experiences reign supreme, client segmentation strategies such as tiered approaches prove invaluable," he said. "The implementation of this concept underscores the need to treat clients as individuals rather than a homogeneous group."

In financial services, segmentation starts with the most basic demographic categories (age, income) and widens out from there, often including deeper insights such as life stage, investment preferences, risk tolerance and financial goals, according to a thought leadership article posted by Maximizer CRM.

"Segmentation in this context helps firms determine how to allocate advisors, assign service tiers and design customized workflows," Maximizer explained.

Why Segmentation Matters

Segmentation makes it possible to act on client data in a way that delivers specific, measurable value, per Maximizer: “Financial services revolve around long-term relationships and trust. Clients expect more than transactional service; they want to feel understood. When a firm recognizes and responds to a client’s specific financial needs, it builds loyalty and improves retention over time.”

Segmentation plays a big role in how firms allocate internal resources. Some clients require high-touch engagement, and can be served through automation or digital tools; others simply do not. Various streams of customer data can be tapped to illuminate who is who. Firms can operate more efficiently if they can view clients through the prism of these distinctions.

Infinity, a firm specializing in technology-enabled digital marketing strategies, published a recent "best practices" blog post that gave the following specific example of how banks can do this:

One segment of your audience is comprised of digital natives who do everything online; they may not ever visit a branch in person.

You first engage with them on your website, and then gain their email addresses and phone numbers; from there, you can send personalized offers to them via email while also prompting them to download your brand’s mobile app for another engagement channel; text reminders and alerts are alternative ways to engage with these customers.

“The more you meet clients where they are, the better an experience they’ll have — and the more they’ll view your organization as a valued partner for their financial needs,” the Infinity team emphasized.

Keep It Simple

In many ways, the financial advisory industry has come full circle as increasing numbers of “next generation” representatives gradually realize a basic truth about this business as they wait their turn to take the lead on whale-sized clients — and to dedicate their utmost attention to serving them with all of personalized touches they can muster.

"I tell advisors to simplify segmentation," said Penny Phillips, co-founder of a registered investment adviser (RIA) firm Journey Strategic Wealth, who prior to that had carved a consulting niche coaching financial practice leaders on how to grow their books.

"The reality is you have your best clients — and you have everyone else," she said.

Phillips suggests practice leaders and rainmakers identify their best relationships — the 80/20 rule usually holds true — and once the A-list is codified, build a plan around it. As far as other sub tiers, they can be nixed, Phillips said. "Whether we are talking about tier B or tier C,” she said, “let's face it, the services you provide them are going to pretty much be the same."