Occam’s razor is a principle often ascribed to logician and Franciscan friar William of Ockham. Essentially, it states that in most cases, the simplest option is usually the right option. And Leonardo da Vinci has been quoted as saying, “Simplification is the ultimate sophistication.”

So, two of the most brilliant people to ever live on this planet agree: keep it simple.

This is also the case when it comes to client segmentation. The best thing we can do is keep it simple.

You likely already know what I call the big five elements of client segmentation: (1) amount of current revenue; (2) amount of current assets; (3) potential future assets; (4) whether they are a center of influence; and (5) how much you like working with them.

But an added sixth element is to ask yourself: Do I have a relationship with both spouses and the adult children – especially the women? Because what you’re really doing here is being more intentional about having a good relationship with the wife.

At the end of last year, Carson released our 2023 State of Women in Wealth Management Report, which found that women are still largely underrepresented in our industry – women make up about 23.7% of all CFP professionals as of the most recent CFP Board data. However, the report discussed how current trends make it even more imperative that we increase gender diversity in the industry. Those trends include:

  • Women outlive men by an average of five years in the U.S., according to Harvard.
  • Executive women prefer working with female advisors who can relate to their experiences, according to Carson’s 2023 State of Women in Wealth Management research (anecdotally, I see this every day with my largest firms).
  • Women will control $30 trillion in financial assets in the next decade, according to McKinsey and Company.
  • 70% of women change advisors within a year of losing their partner, according to McKinsey and Company.
  • 82% of people want to work with a financial advisor from a similar background or family situation as them, according to Edelman Financial Engines.

And in the spirit of simplicity, the added sixth element of client segmentation is to be intentional about focusing on women – both the female spouse in opposite-sex couples and the daughters of your clients. In this blog, I’ll get into ways to do that.

The Perfect Advisor

Many of my coaching members have shared with me how they intentionally prioritize the women in their opposite-sex couple clients. They make a conscious effort to greet the woman first, giving her the prime spot at the table and showing that they truly appreciate them while also showcasing their value.

Michael Kitces reported that the four skill domains for financial advisor skill mastery are competency, empathy, management and business development. The 2023 State of Women in Wealth Management qualitative analysis found that women are uniquely suited to the role of financial advisor because they’ve been conditioned historically to be more empathetic and superior at relationship-building skills.

For the last several years, I have said the perfect advisor is a woman who studied psychology and holds her CFP. This ideal advisor is competent (hence the CFP) and has high emotional intelligence (because of her background in psychology).

Intentionally focusing on your female clients is crucial, and if you have female advisors on your team, even better. Female advisors, especially those with superior emotional intelligence, an understanding of why people make the worst decisions at the worst time (I.e. behavioral finance) and who excel in providing goals-based planning. They can also better connect with female clients.

Whether you’re a male or female advisor, it’s important to leverage and involve your female associate advisors in a more intentional way. By actively engaging with the wives and daughters of your best clients, you not only strengthen these relationships, but also create a revenue boost for your firm when inevitably your male clients pass away.

Prioritizing your female clients is not only a smart business move, but it also promotes inclusivity and a deeper understanding of your clients’ needs.

The Family Summit

Advisors think about family summits and their eyes roll in the back of their head. They might say, “Family summit? I can’t spend all that time inviting people and organizing a summit that will take a whole day!”

But think about the simple concept: to get to know the family. To be able to not just know the matriarch and the patriarch, but to know all the other folks. With a family summit, you’re taking what you’ve learned by talking to your A-plus clients and asking them what they want with their estate planning, their legacy and what they want to do to make it an easier transition for their children, and then helping them communicate that.

So, the timeline is like this: You ask them what they want with their estate planning. You do the estate planning. Then you get everybody together to communicate it. That doesn’t mean you have to plan and host an all-day summit – it simply means helping your couple clients with that communication process.

Back to the concept of simplicity. It could be as simple as a Zoom meeting. You can either be the one to communicate the technical details about how everything is going to work – the will and trusts and any other elements – and educating the sons and daughters on their parents’ wishes. Or you can be the one to facilitate the conversation, letting the parents take the lead.

The family summit is an opportunity to demonstrate your value to the next generation. It’s a chance to show them why their parents like you so much and how good you are so that when their assets transfer, they’ll have one less thing to worry about because they’ll have you as their trusted advisor.

So many of you have a mission statement that is fundamentally about helping people live a better life – helping them worry less and enjoy life more.

When you intentionally connect with the spouses and children of your A-plus clients, this helps you better demonstrate how you execute your mission statement.

People try to overcomplicate this.

Just Do It

Taking the advice of two of the world’s smartest people, apply Occam’s razor when it comes to client segmentation and focus on keeping things as simple as possible. The five main elements of client segmentation should always be top priorities – but don’t forget the added sixth element: intentionally focusing on the next generation – particularly the women.

Make sure you are taking all necessary steps to ensure your clients’ spouses and daughters are part of their portfolio plan. Being intentional about providing comprehensive advice to women is an important step toward working with them, and in turn can result in stronger and more mutually beneficial relationships.

This isn’t rocket science. Most good things aren’t rocket science. It’s a simple concept, and simplicity is brilliant. Client segmentation using the big five and the added sixth element (asking yourself, “Do I have a relationship with both spouses and all the family members) isn’t beyond your ability. You just need to do it. And if you’re having a difficult time, your team of coaches is here to help.

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