Segmenting your book: building a customized and scalable practice

Key takeaways

1. Many factors go into the success and growth of firms, but segmentation, efficiency and tailored solutions have proven to be of high importance.
2. Open dialogue and relatability create trusting relationships.
3. Interest in lifetime income is growing and firms should take the time to educate participants on the long-term benefits.

Creating growth

Two key measures of successful client engagement are customization and scalability. How can you scale a practice while ensuring that each client still feels catered to? The importance of segmentation goes beyond that of the target markets and client growth: it also incorporates how clients can stay informed about their peer group, and the latest industry trends. To identify how best practices are constantly evolving and how to approach segmenting a client book, we spoke to Jeanne Sutton, Managing Director of Strategic Retirement Partners (SRP), Nashville, and Lisa Buffington, Vice President of Retirement and Wealth Services at Marsh McLennan Agency.

“When I joined Marsh McLennan Agency our target market had been predominantly focused on mid-market clients and organizations.” Lisa begins, “but as solutions and opportunities have presented themselves, we’ve evolved. This has led us to having more focus on PEPs and group plans, as well as non-qualified plans and executive benefits. We’ve also invested heavily in financial wellness and employee engagement resources. All of these changes and opportunities leveraged have shifted our client base and how we build relationships and service models to support them.”

Jeanne also speaks to the changing client base, and how that has changed client communication. “We’ve moved up market, which I appreciate, and we added Non-Qualified Plan consulting. We purposefully don’t segment clients based on industry or have a niche market. We focus on services and support needed. Focusing on larger clients, with similar needs, has streamlined our consulting services and messaging. However, we do segment communication based on audience: Plan Sponsor, Plan Participant and Prospective Client. This allows us to scale our messaging across the board, efficiently use and distribute material with as little reworking as possible.”

This scalability has led to broader segmentation in terms of industries served, Lisa states. “We manage clients across a variety of industries, so we aim to provide deep dive insights and reporting that are industry specific, allowing us to tailor our consulting to the specific trends we are seeing. It’s not just about providing thought leadership that resonates with clients; it’s more about the stewardship discussion framework we walk clients through that guides them to determining what strategies would be in the best interest of their Plan, their company culture, and most importantly their employees. In support of this process, we will often provide custom consulting that is highly valued with a deep dive on their top competitors who represent the organizations that they compete with for talent.”

Jeanne speaks on engagement, stating she tries to include current events that cover hot topics while tying that content back to SRP. Jeanne is passionate about making sure the topic is interesting, stating she wants to avoid content that is “evergreen and stale,” which often leads to disinterest. She also produces content that is inspired by client questions, regulatory changes, and industry trends.

Jeanne specifically focuses on operational efficiency. Once a relevant and timely topic is identified, she deploys it through multiple channels. “A single social media video can be used to attract prospects, establish brand, provide participant education, and answer a client question. That topic can then be converted into a webinar for clients and their employees. We build three education presentations a year (often inspired by our videos that receive the most impressions) and we send those to our clients and say, choose one of the three. We then book-end it with specific information about their plan and other benefits. This allows us to efficiently deliver quality education with a custom touch every client wants.”

Lisa also notes that Marsh McLennan Agency has taken steps to build that breadth of content while evolving their team’s service model, adding “When we identify clients that may be engaging with us less frequently, we think about the engagements, resources, and consulting guidance we can provide outside of the formal committee structure. We focus our model on specific priorities to keep their initiatives moving forward, so that the committee meeting can serve as a formal update. One important aspect of our service model is how we are doubling down on engaging with our clients’ employees. We’ve got a dedicated and growing team of financial coaches that support our financial well-being solution that is driving that engagement. The managers on our team are working really hard to continue to evolve our service model and specifically look at the level of engagement required for certain clients.”

Lisa also speaks to repeatable types of events that can be structured for a specific subset of clients, giving the example, “Marsh McLennan Agency has a Life Sciences Practice that I’m very involved in supporting. We often hold events just for our life sciences clients and prospects across our Retirement & Wealth, Employee Benefits, and Business Insurance lines of business. They are designed to be very tailored events specific to prioritized discussions dictated by our clients. We take a similar approach for clients in other industries or markets as well, building those opportunities for increased depth of knowledge and insights sharing through optimized segmentation.”

Setting yourself apart

The process of segmenting books allows for firms to support client needs with proper resources. As the advisor, communication with the client is integral to address comments and concerns. The advisor and committee can then strategize a plan that helps an individual achieve their goals. The goal is to figure out the role the retirement plan plays in corporate culture, and more importantly, the role of that retirement plan in total rewards.

Lisa reiterates the importance of this, saying, “It starts with the conversations we are having with the committee relative to their goals and objectives for the retirement plan and making sure that through those discussions you identify strategies that can be considered and how it specifically ties into their corporate culture.” Lastly, of utmost importance is having a pulse on employees’ feedback and opinions. “When you’re having conversations with a committee and trying to identify strategic opportunities such as retirement income it can be very easy for employers to say, “it’s not a priority because our employees aren’t asking about it, but if they haven’t asked employees about it, how do they know? “We can transform the conversation dynamic with clients, encouraging them to be more receptive to resetting priorities by adopting a more intentional approach to incorporating employee feedback.”

Jeanne emphasized the importance of decreasing formality, saying “Every time we ask a new client why those chose to work with us over other fantastic and experienced advisors, the response is always ‘relatability’. You want the client to feel as though they can come to you with any questions they have. We regularly hear from prospects that their previous advisor was too formal, too technical, and spoke in industry jargon.” Jeanne believes this level of informality increases trust and communication with clients and solidifies a personal relationship.

Encouraging open dialogue around lifetime income

Retirement education is a rapidly growing part of practice segmentation, as some clients are more comfortable and educated on lifetime income solutions than others. Advisors can aid committees and participants to ensure they understand what options are available and how best to utilize them.

Lisa has seen an increased interest by employers in the consideration of lifetime income solutions and resources for their plan participants, not only due to the headlines of the topic, but also because more advisors are beginning to make it a prioritized discussion with fiduciary committees and are making a conscious effort to develop more education and personalized employee engagement resources in this regard. The goal is to avoid making the conversation solely about product, Lisa says. “It’s an ongoing and holistic conversation that we want to have with our clients. As financial advisors, it’s on us to re-frame the conversation with plan sponsors so that they understand how the retirement income product and resource landscape is continuing to evolve, what solutions and resources are available that best align with their specific goals for their organization’s retirement plan(s) and participants, and, most importantly, what implementation strategies and personalized engagement resources should be considered to ensure success. Lisa emphasizes that at the end of the day, “it’s about helping employers make decisions that are in the best interest of their employees, and how it fits within their broader culture and holistic employee benefits and engagement philosophy.”

A holistic conversation that we want to have with our clients, and as financial advisors, it’s on us to reframe the conversation with plan sponsors, so that they understand what the opportunity is and what the specifics need to be for their organization.” Lisa emphasizes that, at the end of the day, “it’s about making decisions that are in the best interest of their employees, how it fits in their broader culture.”

SRP has seen similar levels of interest in lifetime income, “We believe in lifetime income, and the majority of clients have now been introduced to what guaranteed income is and why it is of interest. Every client, except one, said that they are interested and want to hear more.” As a result of this interest, the firm has begun the process of reviewing plan documents and distribution options to make sure that the plan can integrate these options, and that the client journey can then be segmented to allow for streamlining.

The nature of knowing the client base and company culture, and segmenting clients by their knowledge and enthusiasm, can allow for tailored conversations that resonate and help build that client trust.

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