Thursday, 02 August 2012 08:11
RDR prompting more client segmentation by advisers
RDR is prompting more Financial Planning firms to make the change to segmenting their clients, according to Defaqto.
A survey by the financial research company questioned 161 advisers and found almost half of financial advisers who do not currently segment their client bank are planning to do so by RDR implementation.
However, 41 per cent of those who do not segment clients, said they had no intention of doing so. A further 15 per cent said they were undecided on what they would do.
Defaqto has published a guide to help those advisers decide on the best client segmentation process for them entitled 'Segmentation: The key to a successful advisory business' . It includes five methods by which client banks can be divided.
These are segmenting by assets under management, by client revenue, by type of service offered to clients, by risk tolerance or by on or off platform business.
Each of these methods of segmentation can help establish what an adviser's clients are likely to need in terms of service post-2012, making it crucial for advisers to make a decision on how they will proceed as RDR implementation approaches.
Fraser Donaldson, Defaqto's Insight Analyst for Funds, said: "Of those who do not currently segment their client bank, a high proportion have no intention of going through this process according to our survey, and 15% answered 'don't know'. In some respects this is perhaps the most worrying statistic of all. A decision needs to be made.
"We firmly believe that good segmentation analysis could be the key to operating a flourishing advisory business in the future. Segmentation will help advisers understand exactly what the needs of their clients are and at the same time give a strong indication of what the new client target market is likely to look like. This knowledge will help shape the structure and approach of an advisory business."
The paper is available to download from the RDR Zone on www.defaqto.com/adviser/rdr
A survey by the financial research company questioned 161 advisers and found almost half of financial advisers who do not currently segment their client bank are planning to do so by RDR implementation.
However, 41 per cent of those who do not segment clients, said they had no intention of doing so. A further 15 per cent said they were undecided on what they would do.
Defaqto has published a guide to help those advisers decide on the best client segmentation process for them entitled 'Segmentation: The key to a successful advisory business' . It includes five methods by which client banks can be divided.
These are segmenting by assets under management, by client revenue, by type of service offered to clients, by risk tolerance or by on or off platform business.
Each of these methods of segmentation can help establish what an adviser's clients are likely to need in terms of service post-2012, making it crucial for advisers to make a decision on how they will proceed as RDR implementation approaches.
Fraser Donaldson, Defaqto's Insight Analyst for Funds, said: "Of those who do not currently segment their client bank, a high proportion have no intention of going through this process according to our survey, and 15% answered 'don't know'. In some respects this is perhaps the most worrying statistic of all. A decision needs to be made.
"We firmly believe that good segmentation analysis could be the key to operating a flourishing advisory business in the future. Segmentation will help advisers understand exactly what the needs of their clients are and at the same time give a strong indication of what the new client target market is likely to look like. This knowledge will help shape the structure and approach of an advisory business."
The paper is available to download from the RDR Zone on www.defaqto.com/adviser/rdr
This page is available to subscribers. Click here to sign in or get access.