View more on these topics

Letter to the editor: Uncomfortable with client segmentation

Dear Sir,

This seems to be the new buzz word in financial services when applied to investment and pension propositions.  However I am very uncomfortable indeed with this concept. 

I wasn’t aware that treating customers fairly was now consigned to the rubbish bin.  How is it then that if a client has say, for example, £98,000 to invest, he gets a lesser service than somebody who has £101,000 to invest, or indeed any other demarcation you may wish to consider.  I well understand the commercial impetus and that firms wish to be more efficient,  but if a client is worth having I would maintain he is worth treating properly.  ]

If you don’t want a client or feel that they are not worthy of your best efforts then don’t take them on.  I would have thought that is fairly simple.  Somebody that has £50,000 values their money just as much as somebody who has £500,000.  To each individual their money is of equal importance, so why should we treat them any differently? 

No doubt there will be many who will undergo logical, and dare I even say it, ethical gyrations to justify providing some clients with a more offhand service than others, but I for one cannot see how it is justified and wonder quite why the regulator is prepared to stand by and let this happen.

Harry Katz

Norwest Consultants



Aviva Wrap reveals Pension Portfolio charges

Aviva has revealed the new charging structure on its Pension Portfolio, available through its wrap. The structure gives clients a choice of three different charging models depending on the sophistication of their investments. Aviva says the move means clients will only pay for the fund range they invest in. The three options are called Core, […]

Hargreaves Lansdown leads FTSE fallers after Citi places firm on sell rating

Hargreaves Lansdown has been the biggest faller in the FTSE 100 on Monday after analyst Citi placed the firm on a sell rating. Harsgreave Lansdown has seen its share price fall 4.5 per cent after the analyst warned the firm was overvalued for the risks it faced, such as RDR and increased competition. Citi says: […]


Money Advice Service likely to miss action plan target

The Money Advice Service is falling short of its own target to generate one million personal action plans for consumers by the end of March, with just 283,397 plans produced between April and September. Consumers can carry out a free online financial healthcheck on the MAS website, which asks a series of short questions before […]


MPAA consultation

By Fiona Tait, pensions specialist The chancellor’s announcement of proposed cuts to the Money Purchase Annual Allowance means it will be more important than ever to be able to tell your PCLS from your UFPLS What was in the statement? Not much. The chancellor spared three sentences to inform us that the Money Purchase Annual Allowance will be reduced […]


News and expert analysis straight to your inbox

Sign up


There are 2 comments at the moment, we would love to hear your opinion too.

  1. Well said Harry. There is nothing wrong with segmentation but the way it is being implemented is generally wrong and the blame for this lies with many so called consultants. We segment our clients but the criteria used are different from that used by most firms. Having discussed their circumstances and future needs and following our recommended actions we agree with our clients what future (on-going) service they will receive, how much it will cost and how they will pay for it. Generally clients will fall into several categories which in a sense is client segmentation but some clients receive a bespoke service appropriate for their needs. All this is pulled together through an efficient time planning (servicing) system. So whether a client has £50,000 or £500,000 they get the service they have agreed. That is profitable TCF.

  2. If I was to take a train from Guildford to London (perhaps to meet with Harry for that drink he promised me!!) I would have a choice of paying one price for my ticket if I went standard class and a higher price if I chose 1st Class. In other words I would self-segment mself

    I don’t think we should be uncomfortable with segmentation and I also don’t think it is about treating one type of client unfairly compared with another. TCF was never about treating all customers the same. I do take Harry’s point though which is a need to avoid any kind of inadequate service

    If someone is prepared to pay me more than someone else they will get an enhanced service that is simply the way the commercial world works.

    If someone with a smaller investment fund wants to pay me the same as someone with a larger investment fund they can have exactly the same service as the other client.

    I think where segmentation is less acceptable is where the client gets no service and yet continues to pay as if they were. I don’t have problem with “segmentation” I do have more of a problem with so called “passive” income

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm