Mr Percival says somebody in their forties who is still building up their pensions and Isa pots is going to have very different needs compared to somebody going to the decumulation stage, the process by which pension savings are converted into retirement income.
“That is one kind of client with one kind of investment needs which is very different from a client who is at retirement, got a half million pot, or a million pot as pensions investments.”
He adds: “In order to be able to efficiently structure your client propositions, it makes sense to segment your client bank to allow you to map solutions to clients or effectively in groups to create a better framework to deliver services and outcomes to clients.”
Mr Jones says segmentation has become more significant following the implementation of the Markets in Financial Instruments Directive which came into effect in January last year.
Under the new rules, manufacturers - such as fund managers - are obliged to define a target market for every one of their products.
He adds: “Segmentation has obviously now become more important in terms of understanding and being able to match products to the right target.
“This is particularly the case for products with specific or unique features or – in terms of investment business – products that are higher risk.”