Client segmentation is the process by which you divide your clients up based on common characteristics (such as demographics or behaviors) so that you can serve those clients more effectively. However, client segmentation doesn’t always work in the advisory industry. In fact, it highlights another issue altogether: a failure to define your niche. So, in this episode, Micah and Matthew will be sharing the problems that develop when you start segmenting clients and what you can do to provide massive value instead.
Listen in as the guys describe how to be more intentional with your practice and how to set realistic expectations with your clients. You will learn how to revolutionize your practice through effective communication, the importance of considering how much time a client actually takes out of your working hours, and how to respectfully “retire” clients.
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And most likely, you often ask yourself the same question (we all do) – Where do I start?
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Financial advisors often hear that segmenting their clients into different slices is just good business practice. But can you be effective and intentional about treating your clients differently—or is there a better way to deliver massive value?
In this article, you’ll learn the hidden dangers of segmenting your client base, what you can do instead, and how to look at your existing clients in a new way.
Too often, financial advisors talk about segmenting their clients based on level of service. Maybe they meet with their A clients twice a year but their C clients only once a year. This looks great on paper: just skip the extra value ads, review everything that’s come up over the last year during your annual meetings, and that’s that.
Of course, in the real world, things are a little more complicated. When we talk about segmenting, we’re really talking about creating an artificial gap in the level of service we provide to one client category versus another. That process of placing clients into categories and treating them differently doesn’t sit right with every advisor. And it shouldn’t.
But if you find yourself facing similar discomfort, the segmenting itself may not be the real problem. It may simply be that you haven’t fully identified who you best serve.
Top financial advisors let their clients’ best interests guide everything they do. But what if some important tax or legislative change affects all of your clients at once? That six-month check-in with your top-tier clients may not be far away, but expecting your lower-earning clients to wait almost a whole year to learn about something that affects them is a poor way to treat a client—and a potential compliance nightmare.
And even if compliance weren’t an issue, consider this: Your clients don’t live in a vacuum. They see each other in your office lobby between meetings, on the recreational outings you put together, at the marketing seminars you give, and in their own social circles. If you treat your clients differently, don’t expect those on the lower end of your ranking not to be offended when they catch wind of it.
Business growth means being intentional about the people you want to serve—but it also means being intentional about the kind of life you want to have.
Financial advisors Matthew Jarvis and Micah Shilanski of The Perfect RIA podcast have three tenets they live by when it comes to making decisions about their businesses, and they recommend others adopt the same three tenets:
Those three steps encompass what it means to be intentional. But when you segment your clients, are you really designing your business around those stated values?
In fact, when you separate your clients into categories and provide a different level of service for each one, you may be providing excellent service and value to your top slice of clients—but you are, by definition, providing demonstrably lower value to your lowest slice than you are capable of. Is it really enough, for you and for your clients, to take some of them partway there when so many others are getting so much more?
If the idea of not doing your very best job for all your clients makes you uncomfortable, all is not lost. According to Matthew and Micah, there’s a way to focus your business on your top clients while staying true to your highest ideals.
Make a list of all your clients, rank them in order of the money they bring to your firm, and look at the ten names at the very bottom. Now, ask your rockstar team to compile a list of the ten clients that take up the most of their time. You will likely see a considerable overlap between those two lists. Will a business model in which the clients taking up the most of your time pay the least for it really help you attain the success you’re looking for?
Instead, imagine the kind of business you could have if you focused on that very top tier—the clients who bring in the most money, take up the least amount of time, and use their word of mouth to bring you more of the same. You would have time to serve more clients, offer even more to those you already have, and develop a reputation for delivering massive value to every single client, every time.
If you’ve been in business for a few years, you may have emotional attachments to clients who are no longer the best fit for your firm. Maybe they’re a friend of the family, maybe they’re the first clients you ever had when you went solo with your business. But for whatever reason, when you consider their account, there’s friction there because it no longer aligns with the way you serve clients best. This friction has to be addressed before it can erode your client relationships and affect your prospects.
Micah has a trick for this: for every hundred clients, he allows himself up to five “emotional exceptions.” That’s just 5 percent of his total client base that falls outside the parameters he’s defined for what he wants his business to achieve. If it means he has to decide between Sue down the block and Bob at the golf club, then so be it. It’s nothing personal; it’s business.
And when it comes to saying goodbye to those you leave behind, don’t think of letting go as abandoning your longest clients. Think of it as graduating them to an advisor more appropriate for their needs and who can serve them better.
When Matthew has reevaluated his office’s accounts and faced the inevitable graduation, he softens the blow by explaining how his business is changing in ways that make him no longer the right fit—and that are in no way the fault of the client—and that he’s committed to helping them find an advisor he knows and trusts to do a better job with their account than his office can moving forward. Who doesn’t want to hear that someone is looking out for them and doing what’s best for them?
If you are communicating to your clients your levels of service, that is a good sign. – @ThePerfectRIA Share on X
You don’t have to be a jack of all trades. – @ThePerfectRIA Share on X
Whether you have segmentation or not, you need to have it written down what your clients get. – @ThePerfectRIA Share on X
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Matthew Jarvis: Hello everyone and welcome to another episode of The Perfect RIA podcast. I’m your co-host Matthew Jarvis. And with me, as usual, the man, the myth, the legend Micah Shilanski. Micah, how are you today?
Micah Shilanski: Jarvis, I am doing excellent. All kinds of fired up. In this new year we have so many amazing things taking place. Super fired up actually about the power session we have coming up just in a couple of days, which is just going to be outstanding.
Matthew Jarvis: Yeah, to really talk about how do you double right now? We’re always about not incremental improvement, we’re about massive improvement, transformational change. How do you double the quality of your communication with your clients and your prospects? Are your prospects becoming clients? Right? And so this is a power session that we’re excited about, all of our power sessions, or we wouldn’t do them, I guess.
Micah Shilanski: I think one of the reasons I’m so excited about this is this is such, and I’m hesitant to say this way, but I think it’s so true, this is such an easy way advisors can add massive value to their clients and their prospects. And it’s easy things that we can do with how we choose to communicate with the clients, with how many times we choose to communicate, and following a proven process. Yeah, I get excited about it, Jarvis, because as you know we’ve been a kind of master of our craft, right? Tweaking this over the years. And it’s amazing to see the improvements by doing very little things that I’m empowering the team to do that they can make dramatic value increases. And if you want to see what that is, boy, you better jump on the ball and make sure you’re signing up for that power session because it’s amazing.
Matthew Jarvis: Yeah. And obviously we’ll talk about this more on Wednesday, but it’s interesting, Micah, early in my career I’d be curious for you, I had thought mistakenly, and I see this with advisors all the time, and at this point it kind of breaks my heart, but this idea that if I get enough technical knowledge, if I get enough designations, if I read enough books, and all of those things have merit, but if you’re not able to communicate it effectively with clients, then it doesn’t matter. And it wasn’t until I met really successful advisors and I realize, “Wait, you’re not any smarter than I am. You’re just very good at communicating this.” And it changed my whole craft and it was just a key contributor to my success.
Micah Shilanski: Dramatically, right? I wanted to go for the easy stuff. I wanted to go for, well, when I get this designation, then clients will want me. Well, when I know this technical stuff, they have to say yes to me, right? All of those other things, but not focusing on kind of the really big thing makes a huge difference, which is how we communicate that to clients.
Matthew Jarvis: Totally. Well, speaking of mistakes that we both made early in our career, we want to talk today about client segmentation. This is a topic that comes in and out of Vogue with our industry experts saying that you’ve got to segment your clients based on how tall they are or how much they weigh or something. I’m not even sure. But there was always this thing like you need to measure all your clients, you need to segment them into… And there was always different words, right Micah? First it was A, B and C and then it was platinum gold and lead. I don’t even know, but…
Micah Shilanski: Triple A, double A, single A, so if a client see it they all feel like they’re A clients, right? However we want to say this.
Matthew Jarvis: This by the way is a tell of a bad strategy when the nuance becomes like, “Well, if you label it triple A instead of A, then it’s a good strategy.” This is a tell by the way of a bad thing.
Micah Shilanski: So, one of the things that we’re going to talk about a little bit is our experience in client segmentation, but really kind of an intro quote. And this kind of came through as Jarvis and I we’re hashing this out in pregame, really? Is this just an avoidance behavior? Now, I know there’s going to be some weird advisor out there that has some solid segmentation practice. We’ll actually talk about one at Colorado that actually does this very effectively. But the biggest thing with client segmentation is are you really being intentional. Now, again, what’s our three tenets of The Perfect RIA?
Number one, deliver massive value, right? Really, really important. Number two, be highly profitable. Number three, takes six months to spend with your family. Now that’s what we’re being intentional about. So when you segment your clients, are you really designing things around that? And then, Jarvis, what also came up when we’re talking about segmentation, right? About saying, “Okay, this group of clients is going to get this service, this group is going to get a lower service, and this group is going to be like, “Whatever I may or may not call you service.”” Right? However, you’re going to define that that’s kind of what segmentation is going to be. When really we looked at this, this wasn’t a segmentation issue, it was a failure to identify a niche issue.
Matthew Jarvis: Totally. And it ties to knowing what service you’re going to provide. So let’s use a classic client segmentation example. You say, all right, our A clients we’re going to meet with twice a year and our C clients we’re going to meet with once a year. So what happens in the year, because again on paper this looks really good, let’s go real world. So in April you meet with all of your C clients for the year. And then October there’s some big change, a tax law change, or a legal change, or a state change. Are you going to just say, “Well, I guess those people don’t get this advice because they already had their one meeting of the year”? Right?
This is a real world scenario. And so a lot of times we think, “All right, well, on paper I’ll talk to them once a year. I won’t do value ads, I won’t follow up with them,” but are you, A, really going to do that? And if you do really do that, are you creating this compliance nightmare where you get audited and the auditors say, “Well, you have this whole group of clients and we see that you’re not calling this group”? Well, those are my C clients and we don’t care. We don’t care. You’re charging the same, they sign the same ADV, the same advisory agreement, and you’re giving them a fraction of the service. That’s not going to go over well.
Micah Shilanski: So, let’s assume then that they’ve done this bronze, silver, gold, A, B, C, whatever. And they actually have a price sheet with the three different levels of service. And let’s assume just for fun that the client’s selected the service and said, “Great. We’re only going to meet once a year,” and you’re delivering on that service. So we can magically wave a wand theoretically, right? And say, “You’re fine from compliance.” Okay, so let’s go down that path if that’s what you’re thinking next. All right, what happens when you have a B client and you’re not doing something for them, but then they’re talking to one of your A clients? Because clients talk to each other. It happens to me all the time. And you recommend something to your A client, which is so powerful. It applied to your B client and you never recommended it, and now that B client gets, and they comment and they’re like, “Why didn’t you bring this up?” Now, is this a theoretical example? No, this happened to me.
Matthew Jarvis: It happens all the time.
Micah Shilanski: It happens, right? This happen when I segment a client. And my answer was, “Well, you wanted this level of service. That didn’t go over very well.” Right? Because their friend is coming to my office as well, and they got a higher level advice, and it wasn’t advice that I gave them, so why not?
Matthew Jarvis: Yeah, this is especially true when you don’t communicate to clients that you have client segmentation, right? And we do know a couple of advisors, like you said, Micah, who say like, “I have three levels of service and prospects opt into which level?” So if that scenario happens, I can say, “Well, they opted into the gold tier and you opted into the silver tier. Would you like to make that change?” I suppose we can make this corollary to their airline industry, right?
If you get on and you bought a coach ticket, shame on you, but you get on coach like, “Hey, I want one of these big seats in the front.” They’ll say, Great news, you can buy these big seats in the front.” The problem with that is in the real world, it almost never works. And it’s really like, “I’m trying to be everything to everyone.” If you’re able to offer first class service using our airline example only do first class service, right? And you can say, “Well, the airlines have classes of service, but they operate on razor thin margins. Most of them lose money and they’re always canceling their flights. So that’s not necessarily a model that I want to duplicate.”
Micah Shilanski: Everyone raves about the phenomenal quality of airline services and wants to be loyal to one airline. It’s not because of reward points, because the amazing service they provide, right? Oh, wait. Nope, yep, that doesn’t happen.
Matthew Jarvis: Yeah. So all our sort of—I really encourage advisors to always, if you have client segmentation or if you’re considering it, really go back and look and say, “Am I being intentional or am I sort of trying to make excuses for my decisions?” And I think the real tell there, Micah, as we talked to advisors is when they tried to justify client segmentations. In fact, I myself did this. As Micah and I were pregaming for this call, Micah says, “Do you have client segmentation?” I say, “No, we have A clients which are all clients. And then we have a group of legacy clients.” And I say, “Those are clients that dad works with or people that he likes.” Micah says, “That sounds like a client segmentation.” I said, “Well, they don’t take that much time, but when they do that’s always a justification.” As we always say, they’re all a potential practice killer. Micah, what does that mean? That they’re a potential practice killer.
Micah Shilanski: Every single one of those clients has the right to file a complaint, right? Because you are not looking, you are not doing their job. And this is the issue that’s going to be there, not only can the A clients talk to the B clients and vice versa that’s going to be there, or the C clients that you never talk to, but what happens to that client that you never talk to and that doesn’t follow your advice, and is kind of a dredge to be there but every now and again is going to call? And guess what? When they call, that C client that you never talk to expects you to drop everything right then and do it all. Why? Because that’s what they expect.
Your top clients don’t expect that by the way, because your top clients understand that, hey, there’s process to do things. There’s process of success. They’re very understanding, but the bottom tier of our clients they don’t. And this is just reality that’s going to be there. Yeah, we have exceptions those who don’t, right? But the majority of these clients are big time sucks. So you don’t believe me? Great, go talk to your operations team, right? Go give them a list of your top 10 clients, then give them a list of your bottom 10 clients just based on revenue. Put the revenue cell numbers aside and say, “Hey, would you please identify for me which of these clients take up the most of your time?” And I think you’re going to be blown away with what you see.
Matthew Jarvis: Yeah. And ideally that’s coming out of your CRM, right? You can just run a report from your CRM and say, “Great, who’s making the most phone calls? Who’s getting the most emails? And like you said, it’s always at the bottom of the list, not the top of the list.
Micah Shilanski: That doesn’t mean we don’t call people at the bottom of your list, right? The question here is what service are you really trying to provide? Again, being intentional with this. Are you really going to provide a high level service? We made a change years ago. Now you can argue with this that I have two different models that’s right here, right? We have our initial prospect appointment that people pay for and says, “Okay, this is all you get with this prospect appointment. This isn’t full financial planning.” And some people are like, “Hey, I want full financial planning for 500 bucks.” Nope, that’s not something we do, right? You get one hour of my time and that’s it for that $500.
Then we have another process, all right, great, this is our full financial planning, this is the cost, this is what entails, et cetera. And then we have business owners, which is kind of separate. Now you could argue that maybe that’s client segmentation. In my world, that’s going to be niching because we’re really niching down and I’m not providing each level with a different level of service. If you do full financial planning, perfect, that means everything. That means everything inside of this realm is really what we’re going to do. And it doesn’t matter what you pay in revenue where assets are different, et cetera. This is the level of service in which we’re providing.
Matthew Jarvis: Well, Micah, a distinction I think that comes up to me as you gave that example, and again, maybe I’m just justifying for you, I don’t think so though, is if you are communicating to clients and prospects your levels of service that’s a good sign, right? You’re saying, “Hey, this is a $500 engagement. Here’s what this includes it.” Or, “This is comprehensive financial money and this is what that includes.” If you are not communicating, so if you have A, B, C, D behind the scenes, that’s where you are kind of you’re playing office, you are justifying your poor decision making. But if you’re fine telling a client, “Hey, listen, you’re a C-level client,” and you have that in writing, and they’re okay with that, and here’s a service, I guess that works. I still don’t think it’s an ideal business model, but I think that’s a real distinction, is if you’re communicating to clients that expectation that they’re a C level versus A level that might be a viable business model.
Micah Shilanski: And I have a buddy down in Colorado. And we didn’t talk about given permission on that just yet, but he runs a practice out there which is totally different than the one Jarvis and I run. Well, of course, we are in our own separate practices, Jarvis and I, but this guy down in Colorado is very interesting. He is very interested in a low margin high volume business. And so he segments his clients and he will stick to it. If a client did not choose to look at a Roth conversion because it wasn’t part of their plan, he will not look at it, he will not recommend, he will not put anything together whatsoever. And if client wants that, they have to pay to upgrade.
So he’s doing all of this based on fees that they’re going to pay, but the client has to pay these fees if they want more services. Now, he’s being hyperintentional about this, right? And I guess that’s really the main focus, is he’s saying, “Nope, this is our line. We’re not violating it.” So often the advisors we meet with have, as you just said, Jarvis have, quote, segmented their clients, but their clients don’t know what service they’re getting. They have no idea. They know that they have more clients, and when I look at that AUM number I want it going up. And if I fired 300 clients or 200 clients, I would freak out and have a heart attack. So I can’t do that because I’d be bankrupt even though they’re only generating 1% of your revenue.
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Matthew Jarvis: I think all this comes back to do you have the willpower to maintain client segmentations? So the advisor you mentioned it sounds like he does, right? It’s also the reason why I can’t ever schedule clients on my calendar, ever, because I don’t have the personal willpower to put them in the exact appointment slots. And you would think, “Well, that’s not a big deal.” And it’s not, but for me it is.
Micah Shilanski: It is a big deal, right?
Matthew Jarvis: That’s right. It’s one of these things I can’t have even one sip. So I never ever, ever schedule a client meeting, because as soon as I schedule one I start messing up. Same with this client segmentation. As soon as I look at a client, I go straight into comprehensive mode. I’m looking at everything, and then these lower tiered clients. And then I’ve got to dig deeper to find their stuff, and it takes me longer. Then they’re not paying for my time, and I’m not making money…
Micah Shilanski: And they don’t want to listen to your advice.
Matthew Jarvis: And they don’t want to follow my advice to begin with.
Micah Shilanski: Yep, this is really it. The perfect RIA model is to find a select group of clients, find that niche group of clients that you want to have, and to deliver massive value. And so that’s the full financial planning, right? And if that’s not your stick, okay, well then maybe you can go listen to those people talking about segmentation, but if your focus is really saying, “I want to deliver massive value and do full financial planning,” I got a hard time with the segmentation concept.
Matthew Jarvis: Yeah. Now, for those of us that had client segmentation, extensively I’ve still got some I’m working with, this is now a tough realization to say, right-
Micah Shilanski: I feel like we should do live extreme accountability, but maybe later. All right.
Matthew Jarvis: Someday I’ll be ready to do it on you on the line. I feel like I’m always walking into this trap. You’re at a tough crossroads. This is where we talk about with the fee increased conversation, with the graduating, you need to look at a list of clients without names, right? What revenue are they generating? And then really make a decision and say, “What’s my cutoff?” Micah, to your three Ps, “Where’s profitability? Where’s my profitability line?” Everybody above that line is an A client because that’s all we have. Everyone below that line needs to either give the opportunity to increase their fee or go work with an advisor whose niche is people in that income range or that profitability range.
Micah Shilanski: Now, one of the things that comes up on at a mastermind, because we had one advisor there that 500 clients were like, “Yeah, that’s not a model,” right? You, you can’t honestly serve 500 clients and deliver full financial planning just within… They were solo by the way, right? And maybe one assistant. So it we really had to make some dramatic changes that was there. And one of the things that kind of comes up is the time schedule, right? Is saying, “Well, wait, how much time do I need for these?” They don’t take enough time. And again, Jarvis, just picking on you a little bit, that’s the trap that’s right there.
As soon as you started saying, “Well, they don’t take that much time,” that’s a warning sign. That’s right there of saying “Haha I’m not making a solid business decision, I’m making an emotional decision.” Now, we all make emotional decisions, especially me, right? And so, great, give it a place to live. For every 100 households I get five exceptions to the rule. So I get five emotional decisions. That’s it. That’s my role, right? But other than that, I really got to be making a decision about what is the best way to serve these clients? And if they are not following my advice, if they’re not coming in for meetings, and I’m not doing full financial planning, am I really servicing those clients?
Matthew Jarvis: That’s a great point, Micah. One other kind of warning word that I heard in that, right? They don’t take that much time. That much is not a number, right? We have to watch ourselves for this victim language or this language that’s not empowered. Anytime I’m using vague statements, that much time, that much money, not that big of risk, I need to quantify this. How much time are they actually taking? Just even mental space, how many meetings are they having? How many times are they calling? Back to your earlier point, Micah.
So, if you catch yourself saying it’s not that big of a deal, they don’t take that much time, it’s not that much of a money loser, put numbers on those, and then translate into that whatever’s the most painful or powerful for you. So if you’re saying, hey, they don’t take that much time and it turns out it’s three hours. Okay, so that just means I’m going to skip the football game with my kids. So, all right, is this client worth missing my kid’s baseball? And maybe it is for you, or maybe it’s not. So we’ve got to translate this to whatever can get you to take action.
Micah Shilanski: Yeah, that’s such a great point to look at. One of the things to do, now we have a lot of this inside a backstage pass as well as in Invictus that you can jump in there and you can see more of this, but is how do we have these conversations? And actually one got on my calendar, believe it or not, relatively recently. It was an old insurance only client back when I only had an insurance licensing I think when I was 19, and their term insurance was expired, so they got on my calendar to review it. But we’re not doing anything else, right? We’re not doing the planning, we’re not doing this, but they know me as the guy that sold them the life insurance because guess what I did? When I was 19 that’s actually what happened, and they’re like, “Hey, this is getting ready to expire, what should we do?” Et cetera. So they were on my calendar. I’m not going to bump them. If they’ve figured out how to get on there then I’m going to have the meeting with them.
And so we had a great meeting, we had a great chat, and I was like, “Hey, this isn’t… And they really wanted to renew and get a new term policy and that’s not really what I do anymore, so I said, “Great. Here’s some wonderful advice, here’s some things that you need to be thinking about, and here’s the resources that I’m going to make a personal introduction for you to someone that’s really going to be able to service you.” And they were super happy with that. They didn’t want to move down the full financial planning track. All they wanted was this little piece and great news. I was still able to help them by pointing them in the right direction and said, “Hey, if that doesn’t work you’re still welcome to give us a call and we can recommend somebody else.” So, this isn’t something where you’re abandoning these people. That’s not what we’re doing here. And it took me a long time for me, Jarvis, to get over in my mind a feeling like I was abandoning these people that were there when I started my Practice.
That’s not what I’m doing. What I’m saying is, “Hey, I’ve really carved out amazing niche to help these type of people, and it’s okay if you don’t want to come along. I’m going to help you find someone else that’s going to service what you need.” I don’t have to be a Jack of all trades. If somebody comes into me and says, “Hey, Micah I heard you were a first responder at one point in time, would you perform heart surgery on me?” No, right? This doesn’t even make any sense. No one would ever ask that. Well, it’s the same thing in the financial services. If my niche is doing comprehensive financial planning with federal employees and somebody comes in and says, “Hey, I got this old term pulse and I need to renew it,” that does not make sense for me to really evaluate that the same way. Yes, we can justify it that I have expertise somewhere in there, but I am not really delivering massive value for them.
Matthew Jarvis: That reminds me of another kind of a warning thing, Micah, which is anytime we think there’s only two options we’re missing a hundred options. And sort of the two that we all outline, which I’ve said myself, which I’ve heard from other advisors, either I take care of that term renewal, or I throw them to the wolves, right? I throw them and some bum is going to rip them off so therefore my moral obligation is I have to take care of them. Well, again, you’re in this two decisions, this false dichotomy. Another option would be for you to find another advisor who that’s what they do, right? So if you’re justifying you are having these weird client segmentations by saying, no one else can help them, A, that’s absolutely not true. B, you have the option to go find another great advisor.
Micah, one of my fee increases I did a few years ago, I was terrified that lots of clients were going to quit. And so I wanted to have someone to send them to, so I called several advisors, and I said, “Hey, listen, I’m raising fees. I think a bunch of these clients are going to quit because of the fee increase. Can I send them to you?” And he said, “Of course. Absolutely.” It’s a great advisor in his own, right? His niche is different than mine. Now, none of those clients quit, and so I didn’t send it to anybody to him, but that gave me the kind of the emotional piece of mind to say, “All right, I can graduate these people,” and I’m not quote, unquote, thrown over the wolves.
Micah Shilanski: Right. So if you’re having that problem, Jarvis’s cell phone is 555… No.
Matthew Jarvis: That’s right. 1212… Yeah.
Micah Shilanski: So really important to find that. And again, it helps. And I think Kitces talks about this a lot as well, finding a new advisor, that your clients that aren’t your ideal fit they’re going to be this new advisor’s ideal fit, right? And of course you don’t want someone that doesn’t know what they’re doing, but there’s plenty of younger advisors, there are plenty of other advisor out there that this is the target that they would like. So, again, this is really going to go back to, it’s not a segmentation question. This is a intentionality question and a niche question that we need to address. And if you’re taking advice from someone who has never done this before and never actually segmented clients, maybe hit the pause button and say, “Really? Is this the best idea?”
Matthew Jarvis: Yeah. Yeah, and ultimately, it’s about being intentional, right? In my case, when you guys started prepping for this podcast, we said, “Oh, it’s about segmentation.” And it’s really about being intentional. What kind of business do I want to have? And where am I being true to that intention and where am I not? And I think whether you have a segmentation or not, hopefully you don’t, you need to have a written down this is what clients get. It’s a great marketing piece by the way, but it’s a great internal piece. This is when we’re going to meet with them. These are the value ads we’re going to deliver. That way you stay true to it on both sides. You don’t underdeliver, you don’t overdeliver.
Micah Shilanski: Clients love it. Clients love it. All right, this podcast is all about action items and taking actions in things. So, Jarvis, you got the first one in here. Kick this off and I’m then I’m going to push back on this one. So, what’s the first action item that our listeners should do?
Matthew Jarvis: Very first action item, be intentional. You’ve got to be intentional about everything you’re doing. Make sure that whether it’s client segmentation, or your fee schedule, or your calendar, or email, or anything, you’re doing it because you think that’s how you’re going to deliver massive value to your clients. And that’s how you’re going to run with a 50% or higher profit margin. That’s how you’re going to be able to spend six months or more with your family each year. But go ahead, Micah, and push back on those things.
Micah Shilanski: I was going to say, “What the hell does be intentional really mean?” I mean, it’s such a vague term, but you just nailed it. It says, what practice are you trying to run? What lifestyle are you trying to have? This is the intentionality question that’s there. What life do you want to have with your family? And are you doing things that line up with that or not? Brilliant. I love it.
Matthew Jarvis: I would say, Micah, a quick note on that. Obviously, we’re big Kitces fans. If you haven’t listened to episode 255 with Cody Garrett, an incredibly intentional practice, not the practice I would want. This is no disrespect to Cody. I’ve met Cody. He’s a great guy, great advisor, but his practice is incredibly intentional. And so there’s examples of being intentional that are different than the perfect RIA model. Again, be intentional.
Micah Shilanski: Yeah, this isn’t a one model solution. It’s a be intentional solution. I love it. The second action item I’m going to throw on there is I want you to define your current ideal clients, and then look to see what niche you’re actually working in. Because sometimes they meet with advisors and they’re like, “Well, my ideal client is 10 million in assets,” and blah, blah, blah, blah, blah, “and your average client has 500,000 in assets.” I’m like, “Look, that’s not your niche.” Right? “I’m sorry, you’re not dealing in $10 million clients, you’re dealing with $500,000 clients.” Which are great. That’s my book of business. I got a bunch of those guys and I love them. They phenomenal. We can add so much value to their lives. So, the question is really what’s your ideal client that you currently have? And then if you’re asking yourself a segmentation question, look at a niche question from that perspective, and do you really need to refocus that niche?
Matthew Jarvis: I love it. Third, actually, I’m going to put out there, Micah, is to attend the power session on Wednesday. These webinars are always packed full of massive value. Now, a quick warning, we have several advisors that will sign up for the power sessions and then they’ll say, “Well, I’m not going to attend it live, I’m going to watch the recording.” When we go back and look at the analytics, you’re not watching the recording. Sign up for it, attend it live, because that’s how you’re going to force yourself to do it. That’s where you’re going to get the interaction, the Q&A, and so forth. So this Wednesday, go to theperfectria.com to get signed up for that and put it on your calendar.
Micah Shilanski: I love it. And quite frankly, I’m thinking about taking down the recordings because people don’t watch them. And if you’re not going to commit to actually showing up and to getting it done, then what was the point of signing up? Random thoughts.
Matthew Jarvis: Yeah, do what works. Do what works.
Micah Shilanski: Do what works. I love it. Well, until next time. Happy planning.
Matthew Jarvis: Happy planning.
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