Client segmentation: The technology evolution

Although the strategy behind client segmentation is unlikely to change, technology undoubtedly will affect the way clients are served.

Improving service to those clients in lower tiers will not be difficult, says April-Lynn Levitt, coach with The Personal Coach in Oakville, Ont., because there is much room for improvement: “A lot of those clients aren’t getting any service, unfortunately.”

In the coming years, client relationship management (CRM) programs are likely to move beyond the simple organization of client information and automated reminders for contact, says Ray Adamson, chief customer officer with BlueSun Inc. in Burlington, Ont. “I think where the technology has the opportunity to go,” he says, “is a much more fluid approach to segmentation.”

CRM systems, Adamson adds, will be able to do “predictive segmentation,” meaning your system will be able to match clients to products or services, based on the information entered about those clients.

Another technological development that will affect client segmentation is the emergence of robo-advisors. The effect will be profound if dealer firms choose to automate their services, either by building their own platforms or by partnering with robo-advisor firms.

Using robo-advisory platforms can help firms and their advisors segment their clients more effectively and serve those segments with a much more complete offering, says Randy Cass, CEO and founder of Nest Wealth Asset Management Inc. in Toronto. For example, automated services can help you save time during the “onboarding” process, the updating of personal information and in the construction and analysis of portfolios.

Exactly how these automated platforms will be made available to financial advisors in Canada still is unfolding. The robo-advice market is dominated by a handful of independent companies, although some financial services institutions have indicated that they are monitoring these evolving advice services closely – and considering launching their own platforms. Investment Executive has reported that several of Canada’s big banks are exploring the use of digital advice platforms for their clients.

Nest Wealth, meanwhile, is willing to make arrangements with dealer firms, says Cass, whereby a firm’s advisors would have access to robo-advisory services for certain clients – without having to give up those clients.

“We fully understand that there are many advisors who want to embrace the advances that the platform will give them and, at the same time, maintain their relationships with their clients,” Cass says. “And we have solutions that do allow [advisors] to accomplish that.”