It’s more profitable to segment your clients, so why are 41% of advisers still failing to do it?

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By AdviceBridge

Since the PROD rules came into effect in January 2018, advice firms have been required to “identify the target market” and their distribution strategy using information from product providers and information they have on their own clients.

This requirement led more firms to segment their clients to help them clearly identify appropriate products and services they should deliver.

Now, although still above pre-PROD levels, the number of firms segmenting their clients stands at only 59% – a 7% fall from the 66% recorded in 2020.

Source: Schroders Adviser Survey November 2021

Interestingly, the proportion of advisers segmenting their clients by life stage has more than doubled to 35% while those segmenting by asset size alone has seen a dramatic drop from 69% to 46%.

Source: Schroders Adviser Survey November 2021

41% of advice firms are failing to segment their clients at all

Not using segmentation to manage your client bank could lead you to miss out on valuable business.

While they may seem to be the most profitable clients, there’s a risk that spending too much time working with top-tier clients could lead you to miss golden opportunities languishing in the remainder of your client bank.

Most firms have clients that they deem marginally profitable or clients who aren’t actively in contact, but ignoring them altogether could be a costly mistake.

Although segmentation is not a legislative requirement, it is a powerful business technique that can add real value. Plus, client segmentation could help ensure you comply with the Consumer Duty, which is being introduced in April 2023.

Read more: Get ready for the new Consumer Duty before it bites

Done correctly, segmentation can…

Be profitable

Instead of wasting time and resources on ineffective and poorly targeted sales and marketing exercises, segmentation allows you to deliver the right message to the right people at the right time.

Support business proposition

Every business seeks to deal with those clients who understand and desire the proposition being delivered. It’s a lot easier to build a customer-centric proposition when it’s developed from the bottom up and centres around the needs, wants, and desires of existing clients and future customers.

By employing different strategies across a segmented client bank, you can test the different groups and solicit constructive feedback as to what is appropriate for each of your client groups.

Make existing infrastructure work harder and smarter

Even if they aren’t being fully utilised, most firms already have the building blocks – client records, administration systems, business networks – of an effective segmentation system already in place.

So, with the right focus, structure and maybe a little additional client research, segmentation can help a business make more effective use of the tools they already own and pay for. Meaning the only real cost is time, and the rewards could easily outweigh the investment.

How AdviceBridge can help

The AdviceBridge platform is easy to implement and integrates seamlessly with existing software, significantly improving your business processes.

Whether you want to spend valuable time with your clients, make your business more cost-efficient, or automate your advice journey, the AdviceBridge platform is great for maximising profits.

The app enables you to communicate and engage with clients from all walks of life, helping you deliver targeted services that are more profitable and engaging to a broader range of client segments.

Find out more about our service and how we can help you by emailing us at, booking a demo, or calling 0203 925 3850.