Are you like the rest of the country, and used this “Covid time” to do some much needed straightening up in your house? Or garage? Or backyard? The actual focus of the overhaul is immaterial. What is material, is that in your endeavour to use this ‘excess time’ in your life, you arranged things so that when you needed to access them or work with them, they were easy to find and retrieve.

Which is the purpose of Client Segmentation, right? Organizing your practice so that when you need to access those specific households, they are easily retrieved. Which in turn makes your practice operate more efficiency, provides clarity for your staff, and ultimately make your practice more scalable, more enjoyable, and more profitable.

One of the great things of working at QWealth Partners is we talk to and get exposed to the workings of a lot of practices. Well over one hundred each year. And I would say, the majority of them (I would estimate about 75%) have segmented their practices in one form or another. Some by revenue, some by AUM, some by needs of the clients themselves, and have grouped them according to their original priorities of the practice, as they see fit. They have “Covid cleaned” their practice.

But if you think of segmentation as a three-pronged process, simply organizing or grouping or “Covid cleaning” your practice is just Step One. And truthfully, provides the least valuable utility.

Step Two, involves creating specific service models for each group and ideally streamlining that service model such that the more valuable clients, again valuable by your definition, are receiving a premium (aka: labour intensive) experience. Now we can debate whether this process is equitable or discriminatory (note to self: topic for next month’s blog – “Morality of Client Segmentation”) but let’s go with the premise that some form of client segmentation does in fact provide scale, diversity, and a balanced growth trajectory for a practice. To that end, it is imperative that you have carefully crafted the service model for each of your tiers, or groups or segments. As an example, that might look something like:

Tier One:

  • 4 face to face meetings annually
  • 4 updates to your financial plan
  • Personalized tax harvesting
  • Annual tax review
  • Annual Estate plan review
  • Birthday Gift
  • Anniversary Card
  • Invitation to Company Christmas party
  • Invitation to Company wine tasting in lake region

Tier Two:

  • 2 face to face meetings annually
  • 2 updates to your financial plan
  • Annual tax review
  • Birthday Card
  • Anniversary Card
  • Invitation to Company Christmas party

Tier Three:

  • 1 face to face meeting annually
  • 1 update to your financial plan
  • Birthday Card

Again, the specific service offerings are really immaterial and entirely determined on your unique practice and client base, but what is critically imperative is that you indeed create these specific service models for each segment and that YOU STICK TO THEM. Without consistency and discipline, your staff will be running in circles trying to determine what aspect of the service model they are expected to adhere to and what aspects they are to ignore, which burns brain cells ultimately taking you further away from the goal of the exercise in the first place; which was to create efficiency and scale in your practice.

In our experience, (and at this point I’m grabbing onto serious anecdotal evidence), we would estimate that of the 75% of firms that actually performed Step One and segmented their clients, about half of those actually execute on Step Two which is to say, they have both codified and executed a service model to accompany the segmentation groupings. So very roughly, a third of firms.

But…where any of this, actually, takes on value, is the acceptance of Step Three: Creating an automated calendaring process to schedule and deliver on the service model as detailed. Key word here is “automated”. Unless you’ve digitized your process such that tasks impose themselves on your assistant who books your calendar (Please tell me you’re not scheduling your calendar yourself!!!), and similarly imposing automated tasks to your entire team responsible for their specific area of expertise in the service model. As an example:

Tier One clients have 4 face -to-face meeting annually, so perhaps we meet with one household Feb, May, Aug, Nov. We need a digital system that auto-populates those reminders, routed to our assistants on the 15th of the month “prior” to the appointment. Once that meeting is booked, we need an auto-populated reminder that will trigger to my relationship manager 3 weeks before the meeting - now that it is booked - to update the financial plan. We need an auto-populated reminder that goes to both our relationship manager and the Estate Planning attorney - who is offsite - to do a plan review 3 weeks prior to that annual meeting.

I’m sure you get the point. What is critical, is that you’re leveraging technology, which holds you accountable for each aspect of the service model. For each client!

Aside from the from the scale this creates for you, which truly will transform your practice, the proactive nature of your team perpetually initiating interactions with your clients sends the message to your client base, “you’re important to me, we will take care of you.” It will be the connective tissue binding your clients to your firm and redefine it from being based solely on personal relationships you have developed with your client base. In other words, they become clients of the firm and not simply clients of you.

To be true, executing on all three steps can be a daunting task. Without a technology solution, it would be both time absorbing and an exercise in futility trying to keep up. But fear not, we’ve got your back on this one.

To find out how we have accomplished this and more at QWealth Partners, please reach out. We would be delighted to show you, “The Future of Wealth Management”.

Clive Cholerton
Executive Partner
QWealth Partners