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Client Segmentation for Financial Planners: Improving Efficiency, Profitability, and Client Satisfaction

Connor Sung June 14, 2022

client segmentation graphs calculator

Client segmentation divides clients into tiers, so financial planners can provide the services, engagement methods, time, and energy best suited to their clients’ needs and the value those clients offer the firm.

The goal of segmenting is to improve the efficiency and profitability of your firm by aligning your services and efforts with the client’s needs and value. To make the most of your segmentation strategy, it is important to understand how it creates value for your firm—and your clients—when implemented effectively.

What Is the Value of Segmentation?

Financial professionals and firms have much to gain from segmenting their client base, specifically increasing revenue, improving efficiency, and accelerating client engagement.

Increasing Revenue

recent Fidelity Investments research study found firms that segment their client base had more growth in AUM and clients with $1 million or more than firms that didn’t segment.1 Regardless of your firm’s size or revenue, segmenting can help you measure the profitability of each client and how that compares to the time, resources, and talent you are dedicating to each.

By setting aside the most in-depth services for your most profitable clients, you decide how to best serve them and, in turn, best maximize your firm’s profitability as well.

In addition, understanding how each of your clients contribute to your firm’s profitability will help you shape and improve your client base long term.

Improving Efficiency

Understanding the expectations for each client segment allows your firm to scale offerings, staff appropriately, and market more effectively towards each segment.

Much of the increased revenue from client segmentation is created through offering the right services for each client need, and by being more effective with the time spent with each client. A well-defined, targeted client service model for financial advisors allows you to serve more households with more personalized plans—increasing your planning efficiency.

At the same time, more standardized offerings allow for the creation of standardized, scalable, and repeatable processes. This creates a strong internal experience and allows for the efficient hiring and training of new employees—further enhancing your firm’s ability to serve more households.

Improving Client Engagement by Differentiating Your Personalized Services

Segmenting your clients also helps you optimize your client engagement strategy to educate and communicate with them based on their needs. You’re better able to meet your clients where they are, and correctly set expectations for you and for them.

The 2021 eMoney Consumer Marketing Survey found that 84 percent of consumers identify personalized content as a very or extremely important factor when working with an advisor.2

Getting to know each of your clients, and identifying and segmenting their needs, will help you provide customized services and a personalized client experience—a key differentiator for your business.

Tuning in to what your clients want will also help you identify unaddressed gaps in your services and strategies, improving the personalized services and advising that will set your firm apart.

How to Most Effectively Segment Your Clients

A client’s AUM, and the revenue they generate for your firm, are the criteria financial advisors have traditionally used to segment their clients.

However, the most effective segmenting means you won’t just segment based on one category, like a client’s net wealth. Look at your clients holistically. Consider their entire financial journey, see what each of them brings to your business, and deliver the level of service that will benefit them and your business most.

Three other things you could evaluate while segmenting your clients are demographics, profitability, and referral value.


Demographics play an important role in a client’s profitability, particularly age. While Baby Boomers may be the most widely served age group now, the high-earning not rich yet (HENRY) segment is eager for financial advice. A new client segment comes with new opportunities, too, such as offering planning as a separate fee from asset management so you can diversify your revenue stream. Segmenting by demographics is important so you can take advantage of emerging trends for years to come.


Identifying which clients generate the most profit for your business, and which generate the least, will help you uncover essential information about which types of clients you’re great at serving and which you may need to improve on. For clients who are less profitable, it’s important to determine what mix of services and talent would be best for them and best for your business, or if it makes sense for you to refer them to another financial professional.

Referral Value

Referrals are likely an essential part of your growth efforts. Some clients may be more likely to refer, or have referred frequently in the past, proving to be highly valuable for your firm. Segmenting clients based on their loyalty or satisfaction levels, then working to create more advocates for your firm, can help supercharge your business development strategy.

Based on these criteria, you can define your client tiers, starting with your “ideal client.” Identify the specific needs of each tier, select services that address those needs, and decide how to deliver them.

How to Implement Your Segmentation Strategy

In order to effectively segment your clients and determine what level of service to provide, financial advisors must get to know their clients personally and collect data that will help them evaluate a client’s value to the business.

By investing in data analytics and a robust CRM system, you can organize your clients’ data and use it to drive critical decisions about your bottom line. You can also conduct regular client surveys to help segment clients based on their affinity for you and your services.

And finally, keep it simple. Client segmentation is an important strategy for any firm looking to scale. But advisors who spend too much time and energy on segmenting are taking time away from actually serving their clients. If your segmentation strategy is too complicated, it will be difficult to implement.

So put your client relationships first, and take the time to understand your clients, their backgrounds, and their needs. These efforts will help you to optimize your services, client relationships, and overall profitability of your business.

As you tailor your services to different client segments, you may find you enjoy or are particularly well-equipped at serving one type of client. This is how specialty practices are born and there are a number of benefits of finding your firm’s niche. Keep learning by reading this post, The Evolution of a Specialty Financial Planning Practice.


1. “Four Steps to Successful Client Segmentation.” Fidelity Investments n.d. https://clearingcustody.fidelity.com/app/proxy/content?literatureURL=/9880538.PDF.

2. 2021 eMoney ROI of Digital Marketing Survey, May 2021, n=188.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

About the Author

Connor Sung, CFP® serves as the Financial Planning Group's Manager of Practice Management at eMoney Advisor. In his current position he provides consultative financial planning support and practice management to clients by helping them incorporate eMoney into their financial planning process. He also serves as a product expert and a resource for internal departments helping Sales, Live Training, Enterprise Relationship Management, Communications, and Development. Connor attended James Madison University, where he received his Bachelor's Degree in Finance in 2013. He earned in his CFP® designation in 2016.

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Welcome to
Heart of Advice

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financial professionals.

Get Started

Tips specific to the eMoney platform can be found in
the eMoney
application, under Help, eMoney Advisor Blog.