Is It Time to Rethink Your Client Segmentation Strategy?

Most advisors segment their clients—by revenue, service tier, or growth potential. But too often, segmentation is treated as a one-time exercise, rather than an evolving strategy that directly impacts firm capacity, profitability, and client experience.

As your business grows, so should your approach to segmentation.

Here’s how to revisit and refine your client segmentation model so it supports smarter decisions—and sustainable growth.

Why Segmentation Isn’t Just for Enterprise Firms

Whether you manage 50 households or 500, you already treat clients differently. The question is: Are you doing it intentionally?

Without clear segmentation:

• Service delivery becomes reactive
• High-maintenance, low-revenue clients consume valuable time
• Your team is stretched thin trying to treat everyone the same

Smart segmentation gives you clarity: who gets what, why, and how often.

Step 1: Define the Right Categories for Your Practice

Not every segmentation model has to be revenue-based. Consider these dimensions:

• Revenue or AUM (traditional, but doesn’t capture complexity)
• Complexity (planning intensity, tax needs, business ownership)
• Engagement level (how often they interact, responsiveness)
• Strategic value (referrals, centers of influence, potential growth)

Pro tip: You can combine categories. For example, a client may be lower AUM but high strategic value—and still merit proactive outreach.

Step 2: Align Services to Segments

Once clients are grouped, map your services accordingly:

• Meeting frequency
• Communication cadence (e.g. newsletters, check-ins)
• Planning depth (full financial plans vs. investment-only)
• Access to specialists (e.g. tax, estate, business planning)

This isn’t about giving less to smaller clients—it’s about giving the right experience at the right time.

Step 3: Communicate the Model Internally (and Maybe Externally)

Your team needs to understand the segmentation model so they can deliver consistently. Consider creating a service matrix that outlines:

• Who gets what level of service
• Who is responsible for delivering each part
• What the expected response time is for each tier

In some cases, it may also be appropriate to explain tiers to clients—especially if you’re moving toward fee transparency or retainer-based models.

Step 4: Review and Refresh Annually

Client needs change. Your capacity evolves. Markets shift. That’s why segmentation isn’t static.

Build an annual review into your planning calendar:

• Who moved into a new tier?
• Who’s taking up more time than expected?
• Who may need to be referred out—or reengaged with a different service model?

This allows you to stay intentional about capacity and avoid slow client creep that hurts efficiency.

Final Thought

Your time is your firm’s most valuable resource. Segmenting clients well ensures you’re using it wisely—delivering value where it matters most, while protecting your bandwidth and margins.

So ask yourself:

“Does our current segmentation model reflect the firm we are today—or the one we used to be?”

If the answer is the latter, it might be time to update it.