This week I am out of the office on vacation, so I wanted to share a guest post from Stan Mann about a topic I’m passionate about: how to become a specialist. I know from experience with hundreds of advisors that our marketing goes from mediocre to explosive when we’re able to capture a true specialization. Stan is a coach to advisors that helps them embrace their unique specialization and get more high-net worth clients they enjoy working with. I hope you enjoy his report and benefit from his ideas. Aloha!
How to Find Your Specialty
By Stan Mann, Coach to Financial Advisors
One of the most powerful strategies for getting more profitable clients is to market to a niche.
There’s statistical evidence that financial advisors who use a niche strategy make more money. They work fewer hours. And they get more and better referrals. Here’s a list of the benefits of targeting a niche:
- It’s easier to find prospects who have common problems you can help solve
- You can learn their language so your messages resonate
- It’s easier to find clients who fit your passions, expertise and personality
- You’re separated from the crowd, seen as the elite company in your industry
- It’s easier to get referrals
- Your marketing plans will be simpler
- You can earn more money with less work
A niche is easier to market to because your clients have the same hopes, dreams concerns, needs and wants. You’ll be able to find out exactly what people in a specific niche want in the way of financial services. Because they will all want pretty much the same thing. You can craft one clear, compelling message.
Yet many advisors shy away from niches. They mistakenly believe offering their services to everyone gives them a wider net and they’ll collect more clients. Most fear if they specialize they’ll lose potential prospects. They don’t realize the opposite is true. You’ll attract more prospects because they’ll see you as a specialist, not just an ordinary run-of-the-mill advisor.
You’ll also be able to get higher fees. People expect to pay more to a specialist. Because of these advantages, many financial professionals decide to choose a niche, but they find the transition very challenging. They just don’t know how to go about it or they don’t understand what a niche really is.
Many consultants and coaches make the process difficult and time-consuming. However, I have a simple system for finding a niche. I’ve found it to be effective for more than 80% of my clients. It goes like this:
First – Review your current client base
One way is to choose from your present clients. Yes, you probably have a rich niche hiding right under your nose. (Not to worry if you don’t. I’ll show you other ways to find it).
Review your clients and grade them A, B, and C. Then select your A clients. These are the clients you love to work with, pay you well and appreciate your advice. Give them an A+ if they also refer to you.
Then – Analyze your best clients
Analyze them and list their characteristics. Identify the following:
- Employment status
- Investable assets
- Socio-economic group
- Geographical location
- Where they congregate
Look for similarities among them. Listing them on an Excel worksheet will help. You can categorize them by industry, place of employment, employment status, position (CEO, owner-retired, near retirement).
Here is an example of how the worksheet might look like:
For instance, you could wind up with something like, male over 50, plastic surgeon in your city. Belongs to the Academy of plastic surgeons. I bet most of you have some great clients you’d love to clone and have dozens more just like them.
Finally – Test your niche
You want to be sure that your niche is rich. You want to be sure that it can support you and make marketing easier, more effective and produce the results you want. You’ll want to make sure that target market is easy to find, willing to talk to you, has the resources to support you, doesn’t have too many strong competitors and is enjoyable to work with.
HOW TO TEST YOUR NICHE
Run your proposed niche through five tests:
Test 1 – Are they easy to find?
Where do they congregate, which organizations, clubs, groups do they belong? You don’t want to burn up your time and other resources trying to chase down prospects. Can you contact them easily? Do you have access to telephone numbers, email addresses?
For example, building contractors belong to organizations such as Associated Builders and Contractors. This makes building contractors easy to find because you can use their site on the Internet to get contact information for builders and contractors.
On the other hand, if you try to market to just anyone who is retired, or near retirement, they’ll be hard to find and you’ll exhaust yourself trying to locate and contact them.
Test 2 – Are they willing to talk to you?
Do they answer the phone? Respond to your emails? Or can you meet them at the golf course or some other activity they engage in regularly?
Test 3 – Can you beat the competition?
Research whom else you have to compete with in this niche. If there’s too much tough competition, you may decide on another niche. If there is no competition, be careful. It might be that this niche is not profitable for anyone.
Test 4 – Will your niche support you?
Evaluate if you can achieve higher earnings from these people. You’ll need to find out if they have adequate assets. For instance, you can look up their occupation on the web and find out their average income. You want them to be high net worth people who are interested in the services of financial advisors. If you are selecting from your current client base, you already know this.
Test 5 – Are they gratifying to work with?
Do they make you happy and excited to go to work every day? For example, a client of mine was contemplating two niches.
One niche was self-employed chiropractors. There were successful, had good business sense, been in business for more than five years, and were trying to grow their business.
The other niche was charitable church foundations. They held $100,000 to $5 million in assets and had long-term goals for these assets. The foundations were open to ideas and willing to create and follow an Investment Policy.
Both niches looked equally attractive and my client wasn’t sure which to choose. Then he checked his feelings and understood he felt more drawn to the churches and the good works they performed. He clearly will have more satisfaction working in this niche.
THE CRUCIAL TESTS
Of the five tests, numbers 1, 2 and 5 are crucial. Your niche must be easy to find and willing to talk to you. This will take the labor out of prospecting. When you enjoy working with them it will motivate you, turn work into fun and make it easy for you to go the extra mile.
What if You Don’t Have Clients You Want to Duplicate?
What if you are part of the 12% that doesn’t have ideal clients to build your niche? Don’t feel bad. There’s plan B. Many lucrative niches have been created using the following methods.
CHOOSE A MARKET THAT SURROUNDS YOU
You may have interactions with a particular group. One financial advisor’s rich niche was a private school her kids attended. The parents had to be wealthy to afford the tuition. She naturally talked to other parents at school functions. The advisor easily got to know the parents personally. She offered them useful financial articles. This positioned her as an expert on their financial needs and helped earn their trust. Then it was fairly easy for her to set up portfolio reviews (a.k.a. sales interviews) and her practice flourished.
CHOOSE AN EXPENSIVE HOBBY
Do you belong to a hobby group such as golfing, sailing, equestrian sports, or flying? You can make this group your niche. This works similarly to the private school niche I described above.
CHOOSE AN ARBITRARY MARKET
Just go for a market that appeals to you for whatever reason. Surprisingly, this can work extremely well. It’s definitely better than trying to market to just anyone. Remember you will test whatever niche you choose.
Use this process to select a niche. Test it to make sure it is rich. Then focus all your marketing efforts on your niche. You’ll be glad you did!
You probably can identify three or four possible niches. You can pursue them all. However, start with just one—the one that resonates with you the most.
Stan Mann is a coach to financial advisors, helping them get more high-net-worth clients. He is a master degree therapist with over 16 years experience helping people clear away negative beliefs and fears that used to stop them from achieving their goals. If you’re ready to learn how to attract more high net worth clients and more money under management, start by grabbing his FREE special report Top Seven Mistakes Advisors Make That Stop Their Growth. It will save you years of struggle.