Segmentation in wealth management is in its early stages, as the choices available to clients multiply. Building a distinctive brand is becoming critical for new client acquisition and begins with the specification of the priority target markets, not just in terms of wealth levels and tangible needs, but increasingly in terms of their attitudes to relationships and style of service. Without defining your targets, how do you prioritise product development, how do you select relationship managers and how do you set the right tone for your communications? Being all things to all men is no longer an option.

Most wealth mangers have gone through the motions of segmentation, but too many have come up with the same four segments and have yet to address the hard choices which will provide the platform for a distinctive brand proposition, supported by a distinctive service, giving a message which is clear to introducers as well as clients.

OUR APPROACH
In broad terms, we believe there are three main elements to segmentation:

	Circumstances (e.g. business owner) help define the tangible needs
	Attitudes help define the approach and style of service
	Wealth levels help define the economics

Our methodology is best understood with reference to the enclosed chart. The objective for each segment is to bring together four important factors as a basis for prioritisation in building the business case:

	Cost of client acquisition
	Profitability
	Scale of initial investment
	Strategic fit

It is an iterative process, designed to define the segments and sub-segments which do not merit further investment, in order to focus resources on those that do. The result must be a flexible structure, not one which forces unwilling clients into pigeon holes or which causes opportunities for profitable business to be turned aside for no good reason.