NICHE MARKETS
NARROW YOUR FOCUS FOR BUSINESS GROWTH:
Benefits to niche practices
In a survey by TD
Ameritrade, niched
advisor practices
showed 35% higher
client growth, 25%
higher revenue growth
and 17% higher profit
margins than
non-niched financial
planning practices.
There has been a significant shift in recent years as more financial advisors move from general
planning to choosing a specific niche on which to focus—with good reason. In an increasingly
crowded industry, one of the easiest ways to make your financial planning practice stand out is
by niching your practice.
Finding your niche
Niching your practice is specifically choosing what kind of client you want to be better at
serving than anybody else in your market.
There are many
practices that
specialize in a
variety of needs.
For example,
some practices
hyper-target:
Divorced women over 50
Generation X or Y
Retirees and people
transitioning into
retirement
High-tech workers
People from a particular
city, county or state
government
Teachers
Doctors fresh out of
residency
Headspace is limited
Those who chose a niche have defined specifically which clients they will work with and
what services they can provide. In addition, advisors who act in the client’s best interest
should recognize that their “headspace” is limited.
When you establish your niche, you experience a mental shift from wanting to solve only
surface issues that enable you to “get the client” and move on to finding the next client.
Instead, you want to find and address greater number of challenges for each client, while
knowing that you are building expertise that will eventually make it impossible for other
advisors to compete with you in that niche. Each client relationship will become considerably
deeper, dramatically increasing the potential for referrals.
Joe Elsasser, CFP
Joe is founder and president of
Covisum, a financial tech company
focused on creating software that
improves lives through better
financial decisions. Covisum helps
financial advisors serving clients
in or near retirement and powers
some of the nation’s largest financial
planning institutions. Contact Joe at
[email protected].
Specializing creates value
Niching your practice allows you to develop specific processes for dealing with the unique
concerns of your specialty. You become more adept at addressing the specific concerns of your
clientele with relevant knowledge and tools, thus providing more value in the market.
Choosing a niche for your practice will help with your marketing efforts as well. It is
expensive and ineffective to market your practice to everybody and anybody. When you
establish your niche, you can tailor your messaging accordingly. For example, if you’ve chosen
to specifically serve retiring railroad employees, you may want to identify processes for
handling the intersection between railroad retirement benefits and Social Security and you
may also want to be familiar with net unrealized appreciation rules as these are issues that
matter to railroad retirees specifically. You can create social media ads targeting specific cities
across the country with a heavy railroad presence.
You can think of niched practices as a game of musical chairs. The advisors who choose a
niche and tailor their practices to serve their niche are claiming a chair. Ultimately, fewer and
fewer chairs will be available, making it so much more difficult for the generalist advisor to
make an impact. You don’t want to be the generalist advisor left standing at the end of the day.
www.nailba.org
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