I was talking with a marketing leader the other day who told me that her firm was embarking on its fourth attempt at advisor segmentation in the past three years. It had gotten so bad that they were no longer using the word “segmentation” within the firm, she said. Instead, they talked about “advisor archetypes” or “advisor partitioning” to avoid the skeptical eye of leadership.


Why was her firm having such a difficult time getting segments to stick? Like so many other firms, hers had built advisor segments around a few common dimensions:

  • An advisor’s total assets under management
  • An advisor’s assets (or gross sales) with her firm
  • An off-the-shelf view of advisor business models, including categories like “rep as portfolio manager,” “manager selector” or “home office outsourcer”

Each of these dimensions is viable and a perfectly reasonable category for a segmentation scheme. However, those dimensions alone weren’t sufficient to develop a segmentation that could be acted upon by her organization. It turns out that her organization was falling into a few traps that were preventing progress:

  • Application: The segments weren’t customized to the most critical use cases for her firm. For example, one of the firm’s main objectives was to optimize its touch points to advisors, but the views provided only binary guidance: Cover these advisors, don’t cover these, etc. The firm was unable to determine what modes of outreach worked best, or what products and content to share when a contact occurred.
  • Projection: When looking to classify all advisors into segments, the feedback she got was, “Depending on the quality of internal data, classification may present hurdles.” In this firm’s case, it turned out that only a small portion of advisors could be automatically classified into its segments. Wholesalers were asked numerous questions about each advisor in their book of business in order to produce a classification. It was no wonder, then, that the segmentation was rejected by sales.
  • Differentiation: A main goal of this segmentation was to enable differentiation in how the firm interacts with and creates experiences for advisors, but since nearly all firms prioritize advisors based on assets, we wind up seeing very high overlap in advisor coverage across firms. Furthermore, by using an “industry standard” view of advisors, firms are inherently taking a non-differentiated approach. Without a clear, unique value story, her firm rejected multiple attempts at segments.

How to Fix It


While the situation above sounds pretty bad, in reality the firm is quite close to having effective segments that the organization can embrace. Here are three tips that will help you create an advisor segmentation that will generate real value, which will change the conversation you have with customers; help you better control your resources and investments (and, in doing so, stand out from your competitors); and lead to more profits, overall: 

  1. Design with the end in mind. This is obvious, but that doesn’t make it any less relevant. Begin by thinking about what your firm could actually do to make an impact on the advisor or your distribution profitability: Could you pursue different products? Differentiate your coverage mix or levels? Pursue different messages or themes? Target specific competitors? Better avoid wasted effort? Determine what’s most important to business stakeholders—be it sales, marketing or operations—and bring those ideas to the forefront. Doing so from the outset will help direct the search for segments and will ensure applicability on the back end.
  2. Start with what you’ve got. It can be tempting to build segments based on a sophisticated line of questioning with advisors. This is certainly a path toward a unique, differentiated segmentation—a worthwhile goal. However, this should be balanced against the goal of applying the segmentation broadly and efficiently.

    Doing so may require some compromises: For example, you may need to use office-level data to discern product use patterns and then project data onto advisors in the office. This is preferred to an approach that classifies most advisors as “unknown” until the sales force takes action. It’s far better to build a segmentation that works from the outset and can be augmented and improved as the information base grows.
  3. Have many segments. This sounds heretical, but hear me out. If you’re like most firms, your advisor intelligence needs to inform many decisions: You want to design new and better products to meet advisor needs; you want advisors to be receptive to your outreach; you want your content and messages to resonate and drive action or loyalty, and you want to spend your marketing and sales resources wisely. And myriad objectives require many ways to view advisors.

    One approach is to have multiple “dimensions” on which you view advisors, such as the value or opportunity they represent to you; the ways they prefer to interact; their underlying beliefs or needs; how they operate in the context of their broader firm; and so on. If you have four unique classifications on each of four dimensions, you’ll have up to 256 “microsegments”—and that’s OK. Your sales team might want to focus only on the value and firm context, and may plan their efforts based on a simpler, distilled segmentation. On the other hand, your marketing operations organization may need to consider all 256 microsegments in order to optimize tactics dynamically.

Firms have struggled with getting good use out of advisor segments for quite some time, and the pressure to do so is increasing as firms look to customer insight and analytics to help them survive and thrive in the face of pricing pressure, advisor transformation and growing national accounts influence. But as I see it, that goal is actually within reach. With a few tweaks to the approach and an eye toward pragmatism, any firm can build a segmentation that drives real impact.