New Kasina Study is First to Segment Financial Intermediaries by Behaviours

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Identifies �The Six Segments� based on detailed industry survey and analysis by @RISK � cross-channel intermediary segments that define investment preferences and attitudes

NEW YORK, March 4, 2004 – Traditional methods of predicting financial intermediary investment preferences based on distribution channel segmentation provide little insight into underlying behavior and may actually be counter-productive, according to the results of a new study announced today by kasina.

The study, �The Six Segments: A Comprehensive New Look at Intermediary Behavior� is the first-ever examination of the investing behavior and product preferences of financial intermediaries across the full range of distribution channels, including wirehouse and regional brokers, registered investment advisors, independent advisors, accountants, and bank- and insurance agency-based agents. For the study, kasina worked with @RISK, a leader in developing customer analysis and decision support systems. Multivariate data about intermediary demographics, attitudes, and behavior were used to analyze intermediary behavior and identify the inherent segments, or groups, that naturally exist in the marketplace.

�Historically, asset managers have assumed that the intermediary channel was the key determinant of financial intermediary behavior and product choice,� said Steven K. Miyao, CEO at kasina. �What we have discovered with this study is that simply knowing that an intermediary works for a wirehouse or is an independent advisor tells you very little about their client base, their investment product choices, or the assets they control. In order to more effectively interact with intermediaries, firms must first take a step back and understand what determines intermediary behavior,� Miyao added.

The survey of 1,033 intermediaries provided a unique glimpse into the behavior and attitudes of the 500,000 U.S.-based financial intermediaries.

The study identified the Six Segments of financial intermediaries:

  • Advice Seekers � 39.3% of intermediaries, 29.3% of intermediary-advised assets
    • Looking for help in running their business and receptive to wholesaler support. They have an above-average number of clients with below average assets.
  • Mom and Pops � 18.0% of intermediaries, 11.4% of intermediary-advised assets
    • Act as a one-stop shop for their few clients. Have limited relationships with asset management companies.
  • Self-Sufficients � 17.1% of intermediaries, 22.6% of intermediary-advised assets
    • Rely mainly on performance, portfolio management, and fee structure to make investment decisions. Are not interested in wholesaler support.
  • Order-Takers � 13.0% of intermediaries, 13.5% of intermediary-advised assets
    • Have a very large number of clients (448 on average), but low average assets. They demonstrate no particular brand loyalty, but sell whatever they can.
  • Indiscriminants � 11.1% of intermediaries, 5.7% of intermediary-advised assets
    • Have the lowest average client size of any of the segments, with a higher percentage of client assets in annuities than other groups. They are unsure of what factors influence their investment decisions.
  • Rainmakers � 1.6% of intermediaries, 17.9% of intermediary-advised assets
    • The �Big Kahunas,� with an average account size more than ten times the industry average, and total assets under management nearly ten times the industry average. These individuals are primarily in urban locations. Their clients are, on average, the oldest of those surveyed (58 years old vs. an industry average of 52 years).

The study found that intermediary channels are distributed almost equally among the Six Segments: roughly 55% of each segment consists of independent financial advisors, 16% were wirehouse brokers, 11% national and regional broker/dealer representatives, 7% insurance agents, 4% accountants, 3% bank employees, and less than 1% were attorneys. An additional 4% of each segment consists of other intermediaries.

Other findings from the study include:

  • Portfolio management and product performance were the top two factors influencing investment decisions across the Six Segments;
  • Order-Takers invest with an average of 16 asset managers, compared to only 7 for Mom and Pops, nearly 10 for Indiscriminants, Advice Seekers, and Rainmakers, and 13 for Self-Sufficients;
  • American Funds was by far the top manager choice across all segments, sold by 67.7% of intermediaries. Other companies, however, have established significant in-roads in certain segments: 92.3% of Self-Sufficients, for example, invest with Franklin Templeton Investments, and more Rainmakers (41.2%) invest with the Vanguard Group than any other asset management company.

�By understanding the Six Segments, asset management firms can significantly improve the efficiency and effectiveness of their sales and marketing programs,� said Lee Kowarski, Senior Consultant at kasina. Accordingly, in addition to an in-depth look at each segment, the study also includes a discussion on the implications of the Six Segments. Part of this discussion touches on how firms can use Macro-Segments and Sub-Segments to better understand their customers, as well as a guide for firms to map their existing customers to the Six Segments. According To Bob Hull, VP of @RISK, Inc., real opportunities exist for firms who wish to leverage these data by assigning a segment designation to each intermediary. By doing so, he states, �asset managers can deliver products, services, and messages in a highly targeted and customized fashion.�

About kasina

kasina is a management consulting firm that is focused on helping financial services companies create intelligent relationships with their investors and intermediaries. By combining knowledge of distribution trends, technological innovations, and marketing strategies, kasina aids leading asset management firms with front-office efforts and publishes a regular schedule of cutting-edge industry research. kasina�s client list includes 18 of the 20 largest asset managers in the United States and leading firms in Canada, France, Germany, and the United Kingdom. An overview of services offered by kasina is available at

About @RISK

@RISK, Inc. is a pioneer in the development of systems that predict and manage customer and intermediary behavior, driving significant dollars to their clients� top and bottom lines. Whether it’s building loyalty, establishing cross-sales programs or acquiring new customers and/or intermediaries, @RISK, Inc. provides profound and measurable value. Their predictive engines and decision support tools can operate as stand-alone CRM systems or become part of existing CRM or campaign management systems. More information about @RISK is available at