Less is More: The Power of the Niche
As a financial advisor, you know that the services you provide are invaluable—they literally serve as a blueprint for people’s lives. But you also know how competitive the industry can be and understand how challenging it is to stand out in such a crowded space. So, how can you as an advisor attract the types of clients you want to serve? The answer is more straightforward than you might expect: By tailoring your services to your niche of ideal clients. You know, the business owners, or growing families, or medical professionals.
On the surface, it might seem like the best way to attract clients is by appealing to a broad range of people. After all, if you’re trying to grow your firm, you likely want to attract as many clients as possible. However, the truth is that if you try to appeal to everyone, you might just end up appealing to no one and costing your firm profitability for the long-term.
Put yourself in the client’s shoes for a moment. Let’s say you were an individual who had just come into an inheritance and wanted to use some of the money to start a business. A smart first step would be to consult a financial advisor and make sure you had your ducks in a row. But which advisor would you choose? If you had the choice between A) an advisor who had industry experience across the board and specialized in overall financial services and B) an advisor who specialized in working with small business owners and understood the challenges of balancing personal and business financial wellness, you’d probably feel more comfortable choosing the latter.
As an advisor, there are several ways to niche yourself in order to better serve clients. Some advisors focus on a certain type of client, such as small business owners or CEOs of major corporations. Others may focus on a specific industry, such as healthcare or education. And still others may choose to focus on a certain stage of life, such as Gen-Xers, retirees, or wealth builders. Regardless of the niche(s) you choose, one thing is true across the board; Choosing to be hyper-specialized in a particular niche can be a very effective way to build your business and better serve your clients in an effective and efficient way. Here are five reasons why.
Personalized Service
When it comes to financial advice, we know that there is no one-size-fits-all approach. Every individual has unique circumstances, goals, and risk tolerance levels. By focusing on a specific type of clientele, advisors can provide more personalized service that is tailored to the needs of their niche. For example, using the scenario from above, an advisor who specializes in working with small businesses will have a deep understanding of the unique challenges and opportunities that business owners face, which will, in turn, allow them to provide targeted advice that can help their clients maneuver their finances and achieve their unique goals.
Trust and Rapport
Advisors who focus on serving certain niches can build both trust and rapport with their clients more easily. When you become known as the go-to expert for a particular industry or life stage, prospects and clients that fit that mold will be more likely to trust your judgment and recommend your services to others. Furthermore, you’ll be more likely to create lasting and mutually beneficial client relationships.
Knowledge of Industry Changes
As the financial services industry continues to evolve, advisors who focus on serving specific niches are able to keep up to date on the latest industry changes and stay on top of how they will specifically affect their clients. This doesn’t mean that you put yourself in a box only serving certain labels of clients. It means truly being able to define and address the needs, wants, and desires of your typical client type.
Specialized Resources and Networks
Advisors that have this level of understanding often access specialized resources and networks that they can tap into for information and insights. To continue with the example from above, an advisor who focuses on serving small business owners may have a network of accountants, attorneys, and other professionals that also serve the same type of client and, through this network, might be able to add more value to the client relationship.
Marketing Success
Many financial advisors attempt to appeal to a wide range of potential clients with their advertising and marketing efforts. However, this approach can be costly and often leads to wasted time and dollars. On the other hand, advisors who focus on serving certain client types can stretch their business development dollars further, as they can be more targeted and intentional with their efforts. By targeting a specific group of people, advisors can not only spend time on their business development in ways that are more likely to resonate with their target client, but also engage more deeply within their client base. In addition, as mentioned above, this allows advisors to build a reputation as an expert in a particular area, which can attract new clients who are looking for specialized advice.
Beyond AUM helps financial advisors identify their ideal clients and then craft personas based on their target clients’ desires, goals, behaviors, and limitations. From analyzing client demographics, the common challenges they face, their professions, and their values, our team seeks to pinpoint exactly who you’re trying to reach and how you can best attract and serve them. Reach out today to get started!