Divide and Conquer: Profiting from Market Segmentation

A wealth management practitioner produces “advice/counsel/wisdom” packaged as a solution to an individual’s needs, anxieties and aspirations. If we focus on the verb “produces,” we appreciate that a practitioner, like a factory, assembles a product solution using advice content as the raw material. This advice product applies to a solution’s two components: wealth planning and investment execution.

You Are an Advice Factory with a Fixed Capacity

Let’s continue with this manufacturing analogy. Your advice engineering touches every area of the product you deliver. In other words, it’s not the tools you use, principally technology and investment products, but how you put them together. As an engineered design, your advice product is your intellectual property and unique to you: what you know; who you are; how you think; what you say; what you do; how you care; why you’re trustworthy. (See my previous blog, “Your Product Is You.”)

Unfortunately, your advice factory has a fixed capacity. At full production, to grow your business leads either to adding capacity (e.g., hiring a partner) or becoming more efficient. The latter is always the first choice before undertaking additional costs and introducing new business risks.

You Are the Differentiation

Apple’s products reach different segments, but each product is delivered with its own messaging, distribution, service and support. While there are numerous laptops, phones and tablets in each of Apple’s competitive segments, what people buy is Apple’s engineering and design prowess.

In a similar way to Apple, your advice/counsel/wisdom leads you to see and do things differently and, as a result, provide solutions uniquely. Your advice, and how you deliver it, is your solution’s differentiation.

Packaging Your Advice Profitably

Your advice/counsel/wisdom is what people are ultimately buying. Financially, the more ways you sell this advice content dictates how vibrant your business becomes.

What emerges is not a homogeneous target market, but rather segments wanting your advice but delivered in a different way. The business challenge is to reach each segment profitably.

Three common ways to segment a wealth management market are wealth, generation/age and life stage. Regardless of segmentation methodology, the profitable path for each segment tailors the messaging, pricing, distribution, service and support, but it remains focused on what all people are looking to buy: your advice/counsel/wisdom.

Market Segmentation Dos and Don’ts

  • Do treat each segment as a separate division
  • Do account for each segment’s P&L
  • Don’t permit operational creep (such as giving high-labor services to low-cost segments; using too much automation for high-fee clients)
  • Don’t put client referrals (children and friends, for example) into the client’s segment if they’re more tightly matched with another.

A High Volume Segment Example

Likely, your current service is oriented to a HNW client expecting a high-touch, intensely tailored wealth planning and investment solution. For this package, such a client is willing to pay a full price. Since you’re already familiar with this segment, let’s look at adding a new segment: individuals with wealth below your current AUM boundary.

Advice delivery. Establish an automated investing method (such as a robo-adviser), but one that allows you to incorporate your own advice content: risk questionnaires, scoring, models, IPSs, proposals and operations (including fee billing, custodian, performance reporting, etc.). While the delivery form is different from the high-touch segment, the core service—advice—remains the same.

Pricing. Use a value-based pricing approach that sets the expectation that your advice product will be delivered using high-volume methods. Keep in mind that this segment’s profits come after adding your own fee and subtracting the robo-adviser platform cost.

Meetings. For one-on-one meetings, use a tool such as GoToMeeting and use the video option to keep the personal approach. For face-to-face meetings, use in-office group sessions in which you organize clients into affinity groups based on common interests such as age, location, job type or family structure for education, planning and updates.

Ongoing contact. Communicate educational topics, updates, notices, planning topics and so forth using email and social media. Also, use semi-annual surveys (consider SurveyGizmo or SurveyMonkey) to capture opinions and gain feedback as a means to fine-tune your offering.

Client service. Use a client portal for investment updates, document delivery, document uploads, planning and profile edits/updates, meeting/event scheduling and Q&A.

Finding new ways to package your advice product leads to accelerated business performance. Given that automated delivery methods and web-based servicing are here to stay (and increasingly accepted), the sooner you package your advice for different market segments the more valuable—and protected—your business becomes.

Kirk LouryKirk Loury
Wealth Planning Consulting Inc.
Princeton Junction, New Jersey

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What a Few Seconds of Strategic Silence Can Do for You

We have all heard that “silence is golden,” but as advisers, do we routinely use silence as part of our presentations?

Now, you may be thinking: I stop talking every time I ask a question and patiently wait and then listen to the client’s answer. This may be true, but it’s not exactly what I am referring to. What I mean is to pause or slow down with your dialogue and truly think about what you want to convey—what you really want the listener to hear—rather than just rambling on with hopes that what you are saying is understood. It’s what I refer to as “the power of the pause.”

Let’s take a look at what a few seconds of strategic silence can do for you.

Pausing for Direction

During one of my group coaching role play sessions, I noticed some advisers were nervously searching for something to say, trying to fill every moment with a question, statement, fact or story. What they didn’t realize was that they were just filling up the conversation with idle chit-chat. By doing so, they were not getting the prospect (we were role playing) to come to a place of understanding regarding the products and services that were being recommended.

So I created the “five seconds of silence exercise,” where the adviser had to pause for five seconds each time prior to speaking. Each round of this exercise lasted five minutes. If the adviser broke the five-seconds-of-silence rule, he or she was immediately eliminated from the game. The rounds continued until one adviser, the winner, remained. The purpose of the exercise was to give the adviser the necessary time to strategically think about in what direction he or she wanted the conversation to go, and what type of dialogue would work best. After a few rounds, each adviser realized that pausing, even for five seconds, could be just enough time to make a course correction.

Pausing for Pace

A conversation is similar to a dance; there is always one person who leads and one who follows. If you feel you are losing the listener because you are speaking too quickly, then it’s time to pause. Simply slow down and try phrasing a question like this: “So … (wait two seconds—one thousand one, one thousand two, then continue) … why do you think that is?” Typically what happens next is that the listener will match your pace and slow down as they answer.

Pausing for Impact

One of the best times to pause is when you are about to close the sale. The two or three seconds of silence after starting a question (such as in the preceding example) creates curiosity about what you are going to say next. “Well? … (again, wait two seconds, then slowly continue) … what do you think is the best course of action?” Then sit tight and wait for the response.

Perfecting the Pause

There is no hard-and-fast rule on perfecting the pause, but if you find yourself disconnected from your client or prospect during a presentation, you will be well advised to let a few seconds of appropriate silence enter into the conversation.

Dan FinleyDaniel C. Finley
Advisor Solutions
St. Paul, Minn.

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Trending Now: New Paid Sick Leave Policies

Over the past few years, states such as California and Maryland, and cities including San Francisco, Seattle, and Portland Oregon have mandated paid leaves or paid sick leaves for employers. And if you have less than 50 employees, as many financial planning practices do, you should not assume that you are exempt from these HR laws.

In the past, employers with fewer than 50 employees didn’t have to worry about state or city-specific paid and sick leave, because the primary legislation was the federal government’s Family and Medical Leave Act. Employers with fewer than 50 employees need to be aware, however, of the Americans with Disabilities Act (ADA), covering employers with 15 or more employees, and the Uniformed Services Employment and Reemployments Right Act (USERRA).

Now the landscape has changed dramatically. Some of these newer laws could require you to provide paid sick leave that:

  • accrues and carries over from one year to the next
  • allows an employee to use for family medical issues
  • carries penalties if you discriminate or retaliate against an employee who requests leave
  • requires you to include information about taking leave in your employee handbook, in a written notice to employees and/or in a workplace poster
  • requires you to maintain records of amount of leave taken

The laws are so varied in content and overage that you should check your state, city and local municipality laws. They each may have leave policies that run concurrently with, provide additional leave or replace federal programs. Although you may not be covered by a federal program, you may be covered by a state program.

What To Do Next

If you have a business location or employees in California, New Jersey, Connecticut, Maryland, Oregon, Washington or New York, you should check if your state, city or municipality has enacted such laws.

If you have a business location or employees in Seattle, San Francisco, San Diego, New York City, or Washington D.C.; Eugene or Portland, Ore.; or Newark or Jersey City, N.J., you have some policies already enacted.

If you live outside these areas, check with your human resource professional and attorney to identify if there is legislation passed or upcoming.

This article is for informative purposes only and is not to be construed as legal advice. Consult your experts, such as human resource consultant or attorney to be aware of federal, local and state regulations and exceptions.

Mary DunlapMary Dunlap, CFP®
Mary Dunlap Consulting
Pottstown, Pa.

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How Will You End the Year?

It is just around the corner. Holiday season, that is. With Halloween, we turned the corner into holiday season and the New Year is staring us in the face. What will you toast at midnight on December 31, 2014?

If you are not sure, then make a plan to end the year strong accomplishing one or several of the goals you have laid out. We all get distracted during holiday season with shopping, parties, hosting events, late nights, lack of sleep, and lots of food and drink. So in terms of meaningful work, you have about six weeks remaining in the year (subtract the week of Thanksgiving, Christmas and New Year). That cuts productive work time to about 42 days following the spook-fest of Halloween.

Between now and the end of the year, what is the most important thing that you accomplish? Client meetings? Get them scheduled now and before Thanksgiving if you can.

For some of you, your best time to see clients is actually in the holiday time frame of December 22 through 31, when your clients have more free time. If that’s the case, make sure you plan personal time early in the holiday season for your shopping and entertaining needs.

Surprisingly, you might find that you have more quiet time with reduced interruptions from client and colleague calls and fewer meetings on your schedule. If this is how year-end shapes up for you, take advantage of it with a year-end review and making a plan for the year ahead.

In upcoming posts on the Accelus Partners blog, I will share some tips for a “year in review” and some pointers for looking ahead. It will be a mini-course in strategic planning concluding with a live event on November 25 at 4 p.m. Central with a focus on goal-setting.

If you are in or near Houston, join me in person at the FPA of Houston breakfast meeting on November 19. The topic will be goal-setting and the financial planning process. One CFP and 1 CPA CE credit are pending approval. Location and details are available here. For non-FPA members, use the promo code NOV15 when registering and get $15 off of the $35 non-member registration price. I look forward to seeing you there!

Barbara StewartBarbara Stewart, CFP®
Coach to financial advisers
Owner and founder
Accelus Partners
Houston, Texas

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Ben Bernanke Is Optimistic, and Funnier than You Think

Speaking in Denver this week at Schwab IMPACT, former Fed chair Ben Bernanke shared thoughts on what was really happening during the 2008 financial crisis, how he is optimistic for the future, and he even cracked a few jokes.

The 2008 financial crisis was basically a panic, Bernanke said, and it made economists realize a comprehensive response was needed. That came, in perhaps the biggest form, as TARP—which Bernanke called one of the most successful and least popular government programs ever.

He also refuted the conventional wisdom of many that by September 2008, it was simply time to let big companies fail. In fact, Bernanke said, letting Lehman fail was not a choice, but a necessity only after failing to find a buyer; failing to find a solution.

Now retired from the Fed, but continuing on as an economist at the Brookings Institution, Bernanke expressed overall optimism when he said a huge financial crisis is often followed by a deep recession, but we are now approaching a more stable economy.

“The United States is still a good place to invest in; to live in,” he said.

Yes, we have an aging population, he said, but compared to other industrialized countries, we are younger and are experiencing more growth in the labor force, and we also have technological advantages over the rest of the world.

Bernanke kicked off his talk by joking about how he is often mistaken for former Fed chair Alan Greenspan, and he kept the banter light throughout by quipping later on when asked if he thought the movie Too Big to Fail (based on Andrew Sorkin’s book) was an accurate portrayal of the actual events: “I didn’t see the movie because I saw the original,” then added how they couldn’t get George Clooney to play him in the film, so they went with Paul Giamatti.

In the end, one thing in particular from Bernanke’s talk that really stands out for me, is what he referred to as the most important lesson gained from the financial crisis: that the Fed is now much more focused on financial stability. That should makes us all feel a little more optimistic.

Schulaka Carly_resizedCarly Schulaka
Journal of Financial Planning
Financial Planning Association
Denver, CO

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For Effective Content Marketing, Think Like a PR Pro

If you’ve heard the term “content marketing” and wondered what it really means, you are not alone. Hopefully this post will help you attain a better understanding of content marketing and how it works.

Content marketing is a strategy that entails the creation and dissemination of original, valuable, relevant and consistent content to engage and motivate a well-defined audience with the aim of generating profitable customer action.

One of the crucial goals of a content marketing strategy is to trigger a two-way conversation, encouraging your audience to discuss, comment and share your content, as they find it valuable in addressing their key problems.

An effective content marketing strategy doesn’t focus solely on the prospect-to-client conversion, but instead takes into consideration audiences’ needs and interests throughout the entire relationship lifecycle. Ultimately, the main aim of your strategy is to consistently create valuable content that will empower you to establish profitable, long-term client relationships.

From Fortune 100 companies down to small businesses, the value of content marketing is being recognized for one simple reason: it works. It works because it switches the focus to “relevancy and value,” the two key characteristics that separate effective communication from the plethora of spam we are exposed to everyday.

Successful content marketing requires that you to begin thinking like a PR professional rather than a sales-oriented individual. Your attention must be diverted from writing traditional sales pitches to creating suitable content that your audience will learn to rely upon, talk about and share with their friends, family and connections. This, in turn, will generate visibility for you and your firm, drive traffic to your website and help you build a reputable online reputation.

Here are tips for how to think like a PR pro in regard to your content marketing strategy:

Define Your Audience

Establish to whom you are writing and why you are writing. Engaging in content marketing creation is like publishing your own magazine. Your goal is to know your audience, educate, inform and serve their needs.

Build Trust

The scope of your content marketing effort is to build trust in you and your firm. So, identify your audience’s most compelling issues, anticipate the questions they may pose, and focus on creating content that educates, provides guidance and helps solve such problems. This will position you as a trusted expert source in your industry.

Establish Content, Frequency and Location

Your content should be featured across multiple platforms—email, social media, blogs, etc.—in order to maximize your outreach efforts to a wide range of prospects. Create an editorial calendar and determine how often and where you want to publish new content (for example, one blog post per week, or Tweet once a day) and develop a list of topics for articles, interviews and videos.

Share and Engage

Make sure that you share your content on the platforms where your audiences are active. Leverage those platforms and email to announce new content and links to it. When someone reads or downloads your content, make sure to reach out to them thanking for their support and encourage them to visit your website.

Think and Act Like a PR Pro

Effective marketing content causes your audiences to pause, read, get engaged and take action. In reaching out to them, focus on creating thought-provoking rather than thought-leading content.

Do you have a content marketing strategy in place? Is it working for you? Share your thoughts here.

Claudio PannunzioClaudio Pannunzio
i-Impact Group Inc.
Greenwich, Conn.

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Create a Magical Client Experience

How do you create magic in the experience you offer your clients? Do you surprise and delight? Are you building loyalty or simply delivering your service? I just returned from Disneyland where I witnessed mastery of The Client Experience.

We were in line at the Indiana Jones ride. Right before we boarded our vehicle, my 6-year-old daughter dropped the oversized lollipop she was enjoying. It shattered, and she started crying. No big surprise. The surprise came when the ride attendant said, “Don’t worry, we’ll get you a new one.” My husband and I looked at each other and said, “Yeah, right, how are they going to pull that off?!”

Here’s the delight:  when we exited the ride, the Disney ‘cast member’ delivered a gift certificate for “one lollipop replacement” for my girl to trade in at the candy shop for a brand new one. Disney understands surprise and delight like no other brand. They have taken the time to map out exactly where the problems arise and provide not only a “fix” but an experience so delightful it leaves the whole family amazed.

Disney also demonstrates expertise in another time-tested loyalty strategy—segmentation. By integrating tiers of service into their client experience, customers feel special, privileged and desiring the high status perks:

  • If you pay up to stay at the Disneyland hotel adjacent to the park, you receive a “magic” hour in Disneyland before it opens to the general public.
  • When you commit to a ride early in the day with their Fast Pass system, you can take the No Waiting Line for the most popular rides.
  • Annual Pass holders receive discounts at every retail stop in the park (and there are many).

Disney knows how to provide special experiences to the most loyalty of customers. This is the essence of powerful segmentation. Reward the clients who are the ambassadors of your brand and they will continue to spread the word about your firm.

How can you incorporate a bit of Disney magic into your client experience?

You don’t need storybook princesses or decorative popcorn buckets to woo your clients. But you can find your own version of a Fast Pass or replacement candy.

  1. What if you set up an event that delivered a high value service that your clients never got around to doing for themselves? At my firm, we hired a photographer and invited clients to come in for the family photo they never seemed to have the time to schedule.
  1. Could you have a team member look up unclaimed property on behalf of your clients to see if they have dollars locked up with the state waiting for them? Everyone likes to recover hidden treasure.
  1. How do you express your thanks? Try a handwritten thank you note. No one gets personal mail anymore, let alone something written by hand. Break through the clutter and jot a “how are you” note, remember an occasion in their life, or simply wish them a happy birthday.


These are all simple, yet often overlooked, gestures as we direct our attention to finding new clients or deal with running a business. Take a few moments to create the magic in your client’s experience with you. You’ll see a sparkle in their eye as shimmery as Cinderella’s tiara.

Kristin Harad 2014Kristin Harad, CFP®
Marketing trainer for advisers
San Francisco, CA



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