Advisors Must Develop A Niche To Survive and Thrive Hot
“Creating a focused practice provides many benefits to both the advisor and the client, says John Nersesian CFP, CIMA, CIS, a managing director with Nuveen Investments.
For one, it allows the advisor to build deeper skills and competencies in a few areas such as executive compensation, business owners, foundations, and endowments. “These competencies should lead to better advice and better outcomes for the clients that are served,” says Nersesian.
A clearly defined market segment also allows an advisor to develop a more compelling marketing message and value proposition, says Nersesian.
Consider, for instance, some common questions asked by investors either directly or within their thinking: What can you do for me that others cannot? Why should I work with you instead of others who I have access to?
“A focused practice on a specific market or skill set suggests that the advisor has worked with similar clients with similar problems/objectives, and has the experience to provide valued counsel,” says Nersesian. “’This ain't my first rodeo,’ is a valuable statement.”
In her practice, Scottino works with all types of clients, but she has also identified three types of people with whom she identifies and focuses on in marketing. The first, she says, are couples in their mid-30s to late 40s, usually with children, and where both spouses are working as executives or doctors.
Unmarried executive women, many of whom are going through a divorce, newly divorced or have been divorced for some time represents the second niche, for Scottino.
And the third group Scottino targets is what you might call May-December marriages. “They are couples that are older gentlemen – usually divorced – married to younger wives and they have children from former marriages as well as a child together,” says Scottino. “This last group has a very interesting set of circumstances for financial independence planning, survivor planning and there are some great techniques you can use in Social Security planning as well.”
Other advisors have found different niches. For instance, Jeffrey B. Thomas J.D., CIMA, CDFA, CPWA, a financial advisor with Raymond James Financial Services, is plowing entirely different ground. His niche is divorce attorneys in collaborative law cases.
“I developed this niche to gain greater credibility with divorce attorneys,” says Thomas. “They want to extend referrals to someone who understands the particular nuances of a divorced individual before extending a referral.” Find out more about collaborative law here.
Profit margins are munder pressure for many advisors. Differentiating yourself from asset allocation engines run by discount brokers and financial advice websites for do-it-yourselfers requires niche marketing.
Niche marketing is particularly important if you want to find new clients on the Web because search engines will help prospects find you if you post content that's relative to people with special needs.
While many advisors fear specializing will turn off people who don't fit into your niche, the fear is unwarranted. People outside of your niche will respect your expertise in a patricular area and probably be just as interested in you.
Do you agree that advisors need to develop a niche? If so, why? If not, why not? And, if you have a niche, tell us about it in the comment field below.
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