Advisory firms are moving beyond the traditional classification of clients by their assets and the revenue they generate. In this second part of our AdvisorEngine Learning Center’s series, client segmentation for financial advisors, I’ll explore how clients can be segmented beyond assets under management. I will also look at how (or should) an RIA widen or ‘soften’ its target market to a younger, less affluent demographic, taking advantage of cost-efficient digital technology.
Client segmentation can dramatically enhance an RIA’s efficiency, profitability, growth and client satisfaction. In this first of a three-part series, I examine why firms should consider segmenting clients into different tiers and how to implement this discipline. In part two, I will explore the criteria used to segment clients and how the practice can broaden an RIA’s target market. And part three will include the challenges the practice poses and some practical Dos and Don’ts for optimal execution.
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One quality of financial advisors that I admire is that they are avid readers, always looking for the next bit of inspiration and insight to benefit their practices. So when thinking about which books would most benefit financial advisors, I tried to mix best practices, aspirational goals, and issues that impact the industry but also transcend it.
As a fiduciary, nothing is more important to you than helping people with their financial lives. But does your practice need some help too? In speaking with several successful advisors and firms, I learned even the best-intentioned investment advice professionals can stumble due to costly mistakes and business oversights. Out of these conversations, we flagged five critical errors that can hound a wealth management practice, ranging from staffing issues to technology implementation. I’ve also included their tips on how fellow practitioners can best avoid these pitfalls.
I spent the last several weeks speaking with successful financial advisory firms. The question we explored together: “What are the most important things you have learned about running a wealth management business?” During the conversation, five major lessons emerged - with ‘growth’ being a key cross-cutting theme across the board. Importantly, these lessons came from listening to client needs, treating people well, and putting in energy to strategic planning. Whether you’re starting your career or building on years of experience, here are five important lessons for investment professionals.