Advisory firms are trying to figure out how to leverage their networks and technology to profitably expand their client bases.
Client segmentation strategies can provide that opportunity when firms align their resources properly.
David Edwards, president of and wealth adviser at Heron Financial Group in New York, is a proponent of segmentation, or dividing the client base into different market segments and deploying different service models to serve each market.
“Our bread-and-butter clients today are baby boomers,” he says. “But if our client base is only people 55 and older, 10 or 15 years from now, we won’t have a very valuable firm as those clients spend down their assets in retirement.”
Consequently, Heron Financial Group is signing on Generation Xers and millennials to widen its client base, Edwards says.
The firm is also trying to bring in African-American clients and same-sex couples and is recruiting African-American advisers.