As targeting high-net-worth (HNW) and ultra-high-net worth (UHNW) clients becomes pivotal for success in the wealth management industry, many banks have sought to grow their services aimed at these households while maintaining traditional mass-affluent-focused business units. This dynamic has created difficulties for firms without defined segmentation strategies. As service demands continue to increase, especially among HNW clientele, banks must learn how to refine and segment their services across the board.

Despite this increased need, nearly one-quarter (23%) of banks have no notable operational distinction in how they serve clients of different wealth demographics, while another one-third (32%) only have two unique segmentations.

As banks increase their adoption of segmentation strategies, asset managers and other third parties will play an important role, but they must recognize that decision makers and sales processes will shift as a result.

Overall, as demographic shifts, service demand increases, and competitive dynamics put greater pressure on banks to refine their services for clients and find new avenues for profitability, banks will need to consider the benefits of a defined client segmentation strategy.

Leverage Cerulli’s report, U.S. Private Banks and Trust Companies 2023: Adapting Service Models, to gain insight into the products and services banks will need to grow and retain wealth.