Clients don't demand that advisors have all the answers. Rather, they are looking for something that may be even more difficult: personalized advice that is relevant to their life, genuine in its promise and authentic in its execution.

Differentiation within the wealth management space has become more nuanced than ever. As recently as five years ago, the potential existed for a very different client experience, depending on which channel an advisor occupied-from affiliated to fully independent and everything in between.

These channels were generally defined by strong operating differences: Advisor compensation was either fee or commission based; a practice either took an open-architecture approach or sold items off a prescreened menu that, to varying degrees, included house products; and advisors varied in the extent to which they acted as fiduciaries to their clients. But the client experience was determined by whether a client's advisor was part of a large financial services brand or had a certain degree of independence as an independent broker-dealer or RIA.

This is no longer the case. The yardstick that traditionally measured client experience on these terms has shrunk in size and significance.

Advisors today still operate within a channel, but for the end client the traditional differences among those channels no longer materially exist. For instance, large broker-dealers often have robust open-architecture platforms, and affiliated advisors are increasingly compensated on a fee-based model. On the independent side, RIAs have ushered in new hybrid models of joint fee- and commission-based business to accommodate those "breakaway brokers" looking to earn a greater share of the firm's revenue or even an ownership stake.

So where does differentiation for the end client lie today? In the softer side of client experience.

It's old news to point out that clients expect something different from their financial advisor in the wake of the financial crisis. But the ways in which advisory practices and wealth management firms are responding to this new reality is still in flux. The general trend on the client side is more engagement. Clients are more active participants in personal financial matters, they demand independent research, and they triangulate among sources of information. That makes the advisors' job harder. They are pressed for greater transparency, and their advice is more closely scrutinized. But it is also an opportunity for greater client intimacy.

Generalized marketing communications will not fly with clients today. The key to client intimacy is relevance. And relevance is best achieved by advisors empowered to make personalized responses that are both appropriate and genuine. We see three keys to creating a positive, differentiated client experience:

1. Client Segmentation

It is not possible to be all things to all people, especially given present client demands. In fact, practices that don't spend the time to define their ideal client-one they're equipped to service effectively and profitably-will find themselves distracted and unable to execute according to their core competency.