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 Writer In You
Whether you realize it or not, you are already a writer. Even if you don’t write a book or columns/blog posts, you are still a writer. Because you write messages. You answer ....Read More
5 May, 2023 | 2 Minute Read
Nano Learning
The Beauty in a Burger Bun
Did the headline come across as odd or out of place? Odd as it may be, there is an important lesson in it for all of us. In his book “True Professionalism – The Courage to Care ....Read More
30 June, 2023 | 2 Minute Read
Nano Learning
Five Questions You Must Answer Before It’s Too Late
Most mutual fund distributors rarely ask themselves these questions. They focus on managing client portfolios. They think about returns, AUM growth, and new clients. But very few t ....Read More
21 February, 2025 | 3 Minute Read
Nano Learning
The Way to Price
Pricing is a complex subject (not to mention the creativity that is often required in it) and one that is rarely understood by most people. Knowing the costs of your services is no ....Read More
20 May, 2022 | 2 Minute Read
Nano Learning
A Powerful Lesson
Morgan Housel wrote about an insightful exchange regarding Costco founder Jim Sinegal. When podcaster David Senra asked Charlie Munger why Sinegal rarely gave speeches or interview ....Read More
31 January, 2025 | 2 Minute Read
Nano Learning
The Most Important Skill for You
What sets the best financial professionals apart? It’s not their technical knowledge, investment acumen, or even their ability to predict market trends. Those are important, but ....Read More
27 December, 2024 | 2 Minute Read
- 0
- 0
0 Comments