Schwab Offers RIAs Help with Segmentation

The program is part of Schwab’s Business Consulting Services, a comprehensive practice management offering for independent registered investment advisers (RIAs). Through an eight-week program, advisers are guided through developing, evaluating and preparing to implement customized segmentation strategies for their firms.

“We have found that advisers who take a strategic and proactive approach to client segmentation are often the best poised for future growth,” said Nick Georgis, vice president at Schwab Advisor Services.

The program also includes an introductory Webcast, in-person workshop and follow-up. Schwab relationship managers, along with a consultant, work one-on-one with individuals from each firm to:

• Help pinpoint which clients drive a firm’s profits and to better align resources to serve a range of clients effectively.
• Explore ways to segment their client base and tailor services to those segments with an eye toward aligning revenue and cost to serve while maintaining great client service.
• Leverage tools and ongoing consultation from Schwab to help them reach their goals.

Schwab’s proprietary Client Profitability Modeling Tool helps to determine client-level profitability and provides advisers with visibility into their firm’s economics and revenue mix.

According to Schwab’s 2010 RIA Benchmarking Study, a small minority of an RIA firm’s clients account for a significant share of revenue: 7% of firms’ clients account for 38% of firm revenue on average (see “RIAs Expect More Growth in Next Five Years“). 

The program has been rolled out to a target group of RIAs in Chicago, St. Louis, Minneapolis, Dallas, Newport Beach, and Seattle and will include several other regions across the U.S. throughout the course of the year, Schwab said.