Advisers have been warned the most common way of segmenting clients is unlikely to be suitable.
Speaking at the Personal Finance Society's conference on Friday (November 23) Mark Polson, principal at the Lang Cat, said Mifid II rules meant advisers would have to segment their clients to make sure they were recommending suitable products.
He said Mifid II's product governance rules stipulated that advisers must identify target markets for each product at a "sufficiently granular level" but the rules did not spell out what this might be.
But he said he saw too many advisers were segmenting their clients by assets rather than by, for example, whether they are in accumulation or decumulation.
Mr Polson said: "If you are segmenting by client life stage, that's a perfectly reasonable way of segmenting clients.
"The one way I think is not a reasonable way to segment your clients is the single most popular way of doing it: by assets.
"That's just nonsense. You cannot do it. It does not work. There is very little correlation between suitability and size of assets.
"I see firm after firm do it. It is easy but it will trip you up."
Mr Polson said he often saw advisers use one platform for clients with assets below a certain figure and another platform for those with assets above it.
But he warned this would lead to the scenario of advisers having to justify why they weren't switching platform when a client's assets grew to above this mark or fell below it.
Mr Polson added that one of the benefits of Mifid II's product governance rules was that it allowed advisers to take service levels into account when deciding which product provider or platform to use.
He said: "You are meant to take the platform's ability to service you and your clients into account and I think it is the first time I have seen that written down in this way and that's a great gift to you.
"The inability to do what they said they were going to do, when they said they were going to do it is absolutely a valid reason for stopping using a provider."