Why Client Segmentation Deserves a Rethink

Let me guess. Client segmentation in your firm still starts and ends with Assets Under Management.

Normally, that feels logical. AUM is easy to sort, easy to explain and easy to defend. But relying on it alone can quietly work against you. Because while balances show what a client has today, they do not explain how that client engages, how they treat your time or how they contribute to the long-term health of your firm.

That is why many advisors feel stretched even when their book looks strong on paper. They are serving clients who drain energy while overlooking others who are easier to work with, more aligned with advice or more likely to grow with the firm over time.

Naturally, better segmentation starts by looking beyond the balance sheet.

Segment Based on How Clients Show Up

That is why attitude is one of the most practical and overlooked ways to segment clients.

Let me guess. It is late on a Friday and your phone rings. You have not even looked at the screen yet, but your body already knows the answer. Are you like, “hey!” Or are you like, “oh gosh.”

That split-second reaction is telling you something important. It reflects how the relationship actually feels day to day, not how it looks on paper.

Because your attention is finite, clients who respect your guidance, follow your process, and trust your advice usually deserve a different level of engagement than those who resist recommendations, question every step, or create friction at every turn. Segmenting by attitude gives you a way to protect your focus and build a service model you can realistically sustain.

And this is not just about managing your calendar. It shapes your entire firm culture. No amount of revenue makes up for constant tension or misalignment, and over time, those dynamics quietly erode both morale and performance.

The firms that last are the ones that notice this early and design around it.

Factor in Advocacy and Influence

By the way, Assets Under Management misses another huge piece of the puzzle.

Some clients are social butterflies. They talk. They share. They tell friends, neighbors, coworkers, and anyone who will listen about their advisor. They might not have the biggest balance today, but they are constantly opening doors for you.

Think about the client who brings you up at dinner parties. Or the one who casually says, “You should really talk to my advisor,” and actually follows through with an introduction. That kind of influence does not show up on a balance sheet, but it shows up in your pipeline.

Because of that, advocacy deserves a place in your segmentation strategy. According to 2024 data from the Kitces Report (Vol. 1, 2024), “69% of advisory firms get new clients through referrals from clients or Centers Of Influence (COIs).”

When you start recognizing advocacy as part of client value, you stop overlooking relationships that quietly fuel growth. And you stop undervaluing the people who are already doing your marketing for you, one conversation at a time.

Create Tiers Your Team Can Actually Use

A quick word on naming, because this part matters more than it seems.

It is tempting to keep things simple with A, B, C and D. But imagine a client accidentally seeing a “D” next to their name. No one gets warm and fuzzies from that.

That is why many firms choose labels that feel neutral or even a little generous. Think A, AA and AAA. Or warm, hot, and cold. Or gold, platinum and silver. These kinds of names still give your team clarity, but they do not feel judgmental or awkward if they ever surface.

The rule of thumb is simple. If you would not feel comfortable saying the label out loud in a meeting, it probably does not belong in your system.

That small choice goes a long way in protecting trust while still keeping your internal processes clear.

Turn Segmentation into Action

Here is where many firms stall. Segmentation exists in the CRM but never changes behavior.

That is why segmentation only matters if it connects directly to client engagement.

For example, clients grouped by life stage or service type can receive information that actually applies to them. Birthday milestones may trigger outreach. Tax-focused households may receive a filing checklist. Retirement clients may receive review prep or planning updates.

Instead of generic communication, segmentation lets you act with purpose.

Supporting Milestones with the Right Follow-Through

Segmentation often highlights moments that require coordination.

For example, different client tiers may receive different birthday outreach, review cadences or service touches. That is where workflow matters.

Hubly helps teams map client milestones, assign responsibility and make sure nothing slips through the cracks.

If milestone-based service applies to your firm, this case study shows how Summit Financial used Hubly to scale support and simplify service delivery.