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Improving profitability and scalability through client segmentation


As asset managers wrestle with fee compression, intense competition for growth, and the need to digitise, they need solutions to improve their profitability and scalability.

Some solutions exist in disciplines that other industries see as second nature.

Client segmentation is a good example, as it increases efficiency and enables a firm to align itself behind its clients’ needs. It is also particularly important for firms that have mature positions in markets where margins are falling.

Segmentation unlocks multiple benefits

Implemented correctly, segmentation gives you a clear understanding of the different wants and needs of different types of clients.

In turn, insight into what your different clients want enables you to define your ‘Client Experience (CX) Strategy’. This should see you aligning the effect you want to create with the ‘wants’ of your different ‘client types’, matching your services with client requirements, and focusing your future prospecting activities as efficiently as possible.

Having made these choices, you will be able to target similar clients within a particular segment(s), set their expectations appropriately during prospecting, and do this in the knowledge that your operational teams are aligned and ready. 

This increases your firm’s end-to-end efficiency:

  • Improved prospecting through more efficient and effective targeting
  • A deliberate and articulated service offering enables sales staff to set the right expectations during the prospecting phase
  • More reliable onboarding through greater standardisation
  • It also minimises the variability in client requests, which manages operating costs, risks and error rates while increasing client satisfaction

Beware the pitfalls

Segmentation will unlock these benefits, but there is a frustrating list of ways to fall short of your objective if you haven’t done it before. Common examples include:

  • Choosing criteria for matching clients to segments that are only based on what YOU want – at Accomplish, we advise our clients to base their primary segmentation on what their clients want, then choose the most attractive segment(s) to target. We all get what WE want, but helping our clients get what THEY want.
  • Adopting awkward titles for the segments (this is a relationship, after all, not a transaction).
  • Focusing more on the ‘top’ tier rather than on the most populous tier.

Segmenting client bases for asset managers

Accomplish has considerable experience in segmenting client bases for asset managers of all sizes. To help our premium members navigate these pitfalls safely and secure the broad benefits of successful segmentation, they can download our ‘Ingredients of Successful Segmentation’. We have used this tool to help our clients evaluate why their existing approach to segmentation may not have exploited its full potential. 

Historically, client segmentation has not been a discipline asset managers have needed to master but it brings significant benefits to an industry that is now experiencing declining margins in mature markets.

Contact us if you would like us to share more of the lessons we have learned about client segmentation in the asset management industry.

Segmenting client bases for asset managers
Adam Grainger

Adam Grainger

Behavioral analytics | Business intelligence | Asset management

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