The 3 Layers of Clients
Amar Pandit
A respected entrepreneur with 25+ years of Experience, Amar Pandit is the Founder of several companies that are making a Happy difference in the lives of people. He is currently the Founder of Happyness Factory, a world-class online investment & goal-based financial planning platform through which he aims to help every Indian family save and invest wisely. He is very passionate about spreading financial literacy and is the author of 4 bestselling books (+ 2 more to release in 2020), 8 Sketch Books, Board Game and 700 + columns.
August 6, 2021 | 3 Minute Read
There are 3 broad layers of clients in our profession according to Dennis Moseley Williams.
The first layer comprises people who want something special and will invest more time and money. The middle layer is where people want something unique. The third layer is the one that is focused on costs.
Most US Wealth Firms (including solo RIAs) focused on the first layer. This also meant that every client had a certain account minimum for a certain level of service. They have fewer clients, a high AUM per client household and thus a decent revenue per client.
Indian distributors and advisors on the other hand have a portfolio of clients with 10-20% in the first layer, 10-20% in the middle layer and 60-80% in the base layer.
They have too many clients, a low AUM per client household and a low revenue per client. In most cases the top 10-20% of the clients subsidize the base layer clients. Too many clients mean increased costs, inability to give personalized attention to everyone (most of the time is taken by the base layer clients) and many clients who are not happy with the overall service.
The client portfolio is completely skewed towards the base layer of clients. A rebalance of this portfolio is the need of the hour.
A few points to ponder.
- The best firms have the attention of the first layer clients.
- The value of your firm is dependent on whose attention you have.
- If you need to operate in the base layer, you need huge volumes to make this work else your best clients will subsidize them. The key part to remember here is that no one has yet figured out how to work with the base layer profitably (despite spending billions of dollars to acquire users and customers). Needless to say, operating in this space will require huge investments in people, processes, and technology.
- The value for most firms lies in the first and middle layer.
What does your client portfolio look like?
Where do you want to operate?
Similar Post
Nano Learning
The Magic of the Discovery Meeting
The discovery process is a crucial phase in any real financial professional-client relationship. By the way this is different from just a data gathering or fact-finding meeting...
21 June, 2024 | 2 Minute Read
Nano Learning
The Architects of Aspirations
Musician Nick Cave wrote, “The everyday human gesture is always a heartbeat away from the miraculous.
Remember that ultimately, we make things happen through our actions, way ....
Read More
19 January, 2024 | 2 Minute Read
Nano Learning
The 3 important times to schedule
As the headline says, there are 3 important times that we all need to schedule on our calendars.
1.Thinking time
2.Learning Time
3.Creation Time
I even managed an acronym for t ....
Read More
13 August, 2021 | 2 Minute Read
Nano Learning
If You Stand for Something, Act Like It
In a previous post, I asked: What do you stand for?
But here’s the next question - Do your actions reflect it?
Because many founders and advisors say they believe in long-term ....
Read More
4 July, 2025 | 2 Minute Read
Nano Learning
Growth and Change
Matt Haig wrote some powerful lines about growth and change in his book “The Comfort Book.”
“When everything goes well, we tend not to grow. Because to grow we need to cha ....
Read More
6 January, 2023 | 2 Minute Read



- 0
- 0
0 Comments