Asset Managers Can Optimize Profitability with Smarter Client Segmentation

Asset managers can enhance their profitability by using more-sophisticated segmentation strategies, according to a new study by kasina. Firms should use smarter segmentation techniques -- a process that divides clients into smaller groups that should be homogeneous within and heterogeneous in between -- to customize the way they service advisers, the New York-based consulting firm contends.

In the past decade, many asset managers employed rudimentary segmentation methods only to see little measurable impact on sales. For better results, kasina says, firms should adopt a more sophisticated model of adviser-based segmentation that takes a broader, more holistic view into account.

As the shaky markets make efficient marketing and distribution more crucial than ever before, firms can use segmentation strategies to ensure resources are driving profit, kasina explains. In addition to helping them improve traditional marketing and communications efforts, better segmentation also will enable asset managers to develop and sell products for specific adviser audiences and structure sales forces for more-efficient production, the report found.

"In our research we found many firms stuck in 'analysis-paralysis,'" said Anu Heda, senior managing consultant at kasina, in a release. "Firms can reduce the paralysis effect by using a representative sampling of data to infer broader conclusions about the adviser base as a whole. Data analysis can also be used to assess whether certain sales opportunities are profitable."