The Growth Lever Most RIAs Are Ignoring: Client Segmentation Done Right
Most advisory firms know they need to grow organically. Fewer have a clear strategy for doing it without adding proportional complexity, headcount, and cost. Alison Considine, head of strategy and business development at Betterment Advisor Solutions, believes the answer for many firms is sitting in a dataset they already have — their own client book.
Done well, client segmentation allows advisors to match service models to client needs, allocate advisor time more intentionally, identify where the firm is undercharging or overserving, and create a clearer value proposition for every type of client relationship. The problem is that most firms still segment by AUM alone — a blunt instrument that misses the complexity, engagement level, and growth potential that determine whether a client relationship is profitable. Considine works with advisory firms navigating exactly this challenge, and she has a pointed view on what separates the firms that segment effectively from those that end up with a spreadsheet and no strategy.
CM: Most advisors say they segment their clients – but most are really just sorting by AUM. What’s the difference between sorting and genuine segmentation, and why does it matter?
AC: Genuine segmentation involves dividing your client base into groups based on not only AUM and profitability, but also growth potential, portfolio complexity, needs, behaviors and preferences, and other specific criteria. Not all large client relationships share the same characteristics, and therefore may require different levels of service, despite having similar AUM. That’s an important point to remember, because in the event of disruption or market stress, different clients will require different strategies and reassurance.
Detailed client segmentation gives advisors the freedom to think beyond AUM and obtain a more accurate idea of pricing, investment strategy, advisor engagement, planning services, and more for each client.
CM: You’ve described segmentation as an underutilized growth lever. What does it unlock for an advisory firm that gets it right – in terms of revenue, productivity, or client experience?
AC: Most RIAs still view segmentation as an administrative or efficiency tool – something you do to manage complexity, not to grow. The reality is that when segmentation is implemented correctly, it can become a genuine organic growth lever. The top RIAs achieving the strongest organic growth are the ones strategically segmenting their client base and building differentiated service models, pricing, and advisor capacity around it.
In the short term, that unlocks capacity – advisors get relief from the “serve everyone the same way” or “one size fits all” model, which reduces service friction and improves day-to-day efficiency. In the long term, it becomes foundational to sustainable growth: firms can scale without sacrificing quality, build more personalized client experiences, and create a pipeline for future relationships. Segmentation also positions a firm to capture the next generation of wealth by offering tiered experiences that evolve as client needs evolve – which matters a lot as assets transfer across generations.
CM: For a firm that has never formally segmented its client base, what does the starting point look like – and what data do they already have that can anchor the process?
AC: Before jumping into segmentation, a firm needs to honestly assess readiness – current AUM, team structure, ability to absorb short-term disruption, and growth goals. This tends to work best for firms with more than $250 million in AUM that are outgrowing their original niche specializations. Firms beginning the segmentation process should expect some disruption along the way, potentially including parting ways with clients who are no longer a fit from a service model standpoint.
From there, effective segmentation starts by grouping clients based on factors like revenue contribution, financial complexity, goals, and service needs – most of which already exist somewhere in a firm’s CRM or portfolio management system. The next concrete step is running a profitability analysis: using visualization tools to model the financial impact on the existing book and calculate cost-to-serve across potential segments. That analysis usually reveals where the real opportunity – and the real risk – actually sit, before a single client conversation occurs.
CM: Once a firm has segmented its clients, how does the service model change across segments? What are the concrete differences in frequency of contact, advice depth, and advisor time allocation?
AC: Firms should intentionally design service models and tiers around each segment, defining meeting cadence, planning depth, investment strategy, pricing, and advisor engagement for each one. In practice, a top tier gets more frequent contact, direct advisor access, and deeper planning around tax, estate, or business events. A middle tier might get semi-annual reviews supplemented by digital tools. A foundational tier is served primarily through technology and lighter-touch outreach, with an option to move up as needs or assets grow.
That structure creates clarity on both sides: clients receive service aligned to their actual needs and expectations, and advisors get structure around how they allocate time and resources. None of it works without the operational backbone, though – billing needs to support tiered pricing, analytics need to make lower tiers profitable, and CRM systems need to actually track segment assignment so the tiers aren’t just theoretical.
CM: Segmentation is often framed as an efficiency play, but you’ve argued it’s also a growth lever. How does better segmentation translate into new client acquisition or wallet share expansion?
AC: New client acquisitions and wallet share expansion are driven by clarity. When a firm can define investment strategy, planning depth, pricing, and advisor involvement for every segment, it can genuinely excel at serving each one – rather than offering a generic experience to everyone and doing none of it exceptionally well. That clarity makes it much easier to spot under-tiered relationships: clients whose actual capacity or need exceeds what the firm currently does for them. That can often be the fastest organic growth opportunity available, because the trust and familiarity already exist.
Rollout discipline matters here too. The right approach is to roll out new service models sequentially – starting with top strategic accounts and moving down to lower-margin or at-risk clients – with personalized client communication at each step about any changes, from fee adjustments to new advisor assignments. That same discipline around knowing exactly who you’re serving and why also translates directly into how a firm markets itself, targets referrals, and pursues new client relationships.
CM: How do you measure whether a segmentation strategy is working – what are the metrics that tell you the model is improving productivity and profitability rather than just reorganizing the spreadsheet?
AC: Success should be measured with baseline metrics set up-front and checked at defined intervals – such as 90 days, six months, and 12 months post-implementation – because segmentation isn’t a one-time reorg, it’s an ongoing strategy. The metrics that actually indicate it’s working include advisor capacity and time allocation shifting toward higher-need segments, cost-to-serve and profitability by tier, client movement between segments over time, and retention or referral rates by segment.
If those numbers aren’t moving within a couple of quarters, it’s usually a signal that the segmentation criteria – not the concept itself – need revisiting. Segmentation done well should show up in the numbers as improved advisor productivity and a more scalable growth model, not just a cleaner org chart.