Finding greater potential in your book

This summer, I wrote about the value of segmenting your book based on customer behaviours. These deeper insights on your clients and prospects improve leads management, conversion rates and present opportunities to earn greater wallet share. Segmenting clients based on assets and revenue is just a first step and doesn’t qualify as insight.

Next, I want to spotlight key insights from the PMG Intelligence 2025 Life Stage Segmentation modelling, designed to help advisors identify the highest-potential clients. Some of these insights haven’t changed from previous model updates. Some have.

PMG’s behavioural modelling reinforces the differences in how decisions are made throughout various life stages and life events. Behaviour changes as people age and their needs change.

From starting to build wealth, to focusing on risk management to preserve wealth, transitioning into retirement and then legacy considerations. It is important for advisors to understand the behaviours that have the greatest impact.

Our research highlights four key differences between low- and high-potential clients:

• engagement in financial concepts;
• financial confidence;
• propensity to save; and
• working with a financial professional.

Early in one’s investing life, engagement in financial concepts is a key differentiator for high-potential clients. These are people generally interested in growing wealth. They engage in financial concepts and ask questions about investment products and strategies. If clients or prospects don’t ask, advisors should lead with questions that gauge interest and engagement. This will draw out those who have a higher potential to build wealth.

Financial confidence is also a key identifier for high-potential clients. This is different from how confident they are managing their own portfolio. Typically, these are investors that demonstrate financial discipline and acumen. Advisors can assess financial confidence by inquiring about the use of strategies that help build wealth, including having a budget, participating in company pension plans or starting to save early.

People who have a propensity to save understand the concept of paying yourself first and typically have been demonstrating this discipline since they were young. They invest a percentage of their income and ensure it is put to work — for the long-term future or to achieve a specific financial goal in the short or intermediate term.

If they are disciplined, they ensure this percentage of income is maintained as their income increases. Having higher incomes is important, but it is the behaviour of systematic saving that makes a difference longer term.

Advisors can start by asking if prospects or clients believe they are natural savers or spenders. If they say they’re a saver, follow-up questions on how they save will uncover their true propensity to do so. Cash-flow analysis will identify opportunities for increasing contributions.

Working with a financial professional is another key identifier of higher-potential clients. We test several behavioural factors and financial outcomes including saving rates, breadth of product use, number of accounts and having a plan and/or documented goals. In every measure, working with a financial professional results in higher usage and better financial outcomes.

Advisors already know this, which makes it more important to discern the other behavioural factors associated with high-potential prospects and clients.

What’s new

We found two important changes in this year’s model update.

First is the emergence of the younger investor. For Canadians under 25, there are distinct financial behaviours emerging. Second is how debt is managed while building wealth. It drives financial behaviors across life stages between 25 and 54.

The rise of the younger investor is something we have been tracking over the last few years. With increasing real estate prices, the traditional dream of buying a home is being challenged. And while Canadians are still holding onto this dream, younger Canadians are looking at different ways to create wealth.

With access to information through social media and digital channels, they are finding different paths to success — one of which is investing. They are transitioning from saver to investor much earlier than previous generations. They realize they have time on their side and they’re putting their investment dollars to work as soon as possible.

Interestingly, they also value advice from financial professionals and may already be working with one. The key challenge for most young investors is getting the attention and support of a financial professional. A lack of income and assets is a deterrent to having an advisor choose to work with them and so they are forced to self-manage.

Understandably, most advisors have concerns given profitability constraints. That said, where behaviours typical of higher-potential investors are observed, consider having those clients served by younger associates. This will bring these engaged higher-potential clients into the fold and help with associate development.

Debt management is a key consideration in building wealth. A lot of advisors counsel their clients to reduce debt as a pathway to building wealth. But sometimes, debt management can be a wealth enabler.

The impact of debt in building wealth is a distinct behaviour that emerged in 2025. Debt needs to be addressed longer term, but it is not a barrier to growing wealth. These younger Canadians are engaged, confident and have a degree of financial acumen. They just do it with higher levels of debt when compared to those who are natural savers. Advisors should not have any concerns taking on clients between 25 and 44 because of debt levels.

There is reason to pause on taking clients between 45 and 54 who have higher levels of debt. They need to improve their financial position.

Three calls to action:

1. Interest in building financial confidence and acumen is paramount. At any life stage, clients who exhibit financial confidence and acumen are going to be your best. If they show interest, help them build it.
2. There is value in working with younger clients. Asking the right questions to understand who exhibits higher-potential behaviours is the pathway to acquiring profitable clients.
3. Debt management should not be a barrier to success. Many clients, particularly between the ages of 25 and 44 may carry large amounts of debt, but also larger asset positions. They typically exhibit higher-potential behaviours. Advisors should work with these clients to manage debt.