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
This is the biggest growth barrier for most distributors and advisors
8 May, 2020 | 2 Minute Read
Nano Learning
The Financial Alchemy
I thought of sharing an interesting insight as a continuation of one of my previous posts “Is the Party Over?”
Many of you would have seen Shark Tank India. I saw a few episode ....
Read More
3 June, 2022 | 2 Minute Read
Nano Learning
Someone Who Believes in You
Look at this simple but powerful image.
On one side: discouraged.
On the other side: hopeful.
Between the two? Someone who believes in you.
For so many MFDs and advisors, this is t ....
Read More
1 August, 2025 | 3 Minute Read
Nano Learning
A Few Expensive Things
While I can write an entire longish essay on this subject, the objective of this Nano is to get you to think about a few expensive things in your business.
12 January, 2024 | 2 Minute Read
Nano Learning
Transformation or Transaction
Pretend for a moment like you have not seen the above Sketch.
Which one of the two is truly powerful - Transformation or Transaction?
I am asking this in a general sense.
Whi ....
Read More
15 October, 2021 | 2 Minute Read
Nano Learning
The Difference
There is a common question that I have heard many times – I do exactly what you do, or I say exactly what you say. But my results are different. Why is that? Is it because they r ....
Read More
3 February, 2023 | 2 Minute Read
- 0
- 0
0 Comments