Segmentation And The Efficient Practice
It can be unwieldy and inefficient for advisors to try serving a wide variety of clients with different wealth levels and financial needs. According to a recent report by Cerulli Associates, one of the ways they can boost the efficiency and profitability of their practices is by carefully segmenting clients-identifying those who offer the most potential to grow the business over time.

Segmenting clients doesn't guarantee success, says Cerulli. But it should help advisors allocate appropriate resources to the most promising client groups.

According to Cerulli, 37% of all advisors across the RIA, independent B-D, wirehouse, regional and bank channels said they formally assigned clients into segmented groups. Advisors at regional firms (62%) and wirehouses (50%) did so the most, thanks to their home-office-backed business development programs and staff.

At the same time, 17% of all advisors said they currently don't segment clients or plan to do so. The RIA channel had the highest percentage in that category (34%), and RIAs did the least amount of segmenting (26%).

Cerulli found segmenting is most common among the advisors serving investors with a net worth of $5 million to $10 million (64%) or between $1 million and $5 million (48%).

The reason: Clients in these brackets have myriad needs requiring a range of products. According to the report, "The complex, disparately varied financial needs of these clients can drive an advisor to distraction."

For example, folks in the $5 million to $10 million category represent an inflection point where various concerns converge. An advisor serving too many demanding clients with dissimilar desires could become a jack of all trades and master of none, concludes Cerulli.

Segmentation enables advisors to pinpoint the best solutions for their clients' needs. For advisors, that means more efficiency, fewer costs and happier clients (and that could make advisors themselves happier).

Arbitration Awards Are Too Mysterious
(Dow Jones) Securities arbitration cases often involve a lot of complex questions and big sums of money. Judgments, however, come in very few words.

Most arbitration awards give no explanation of a decision. Whether the case involves an investor trying to recoup losses or a brokerage that wants to stop a departing broker from taking clients elsewhere, it often winds up with this sentence: "Claimant's statement of claim is dismissed (or granted)."

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