There are many reasons why an advisor might consider specializing in a niche market. Among these, one of the top reasons would be to stand out from their competition. While there are many good reasons for financial advisors to consider a niche market, how does an advisor get started?
Consider Your Strengths
Firstly, it’s important to focus on what you are good at. Some advisors may naturally be better at constructing certain products, or serving certain clientele. It’s easier to start to see if you have an inclination one way or the other if you already have a practice. If you don’t, you may need to do some digging and exploring to get feedback from others around you. The last thing you want to do is specialize in something you don’t have much familiarity in. It’s best to start where a path has already naturally started carving itself out.
Focus On Something You Enjoy
This point is arguably the most important thing to consider when starting a niche practice. Why you may ask? Well, if you don’t enjoy what you are doing, you won’t be happy for very long working within that market. In fact, if you did enjoy something that you weren’t necessarily good at, or didn’t have that strength in; you would still be willing to put in the time and effort to become better at it. Whereas, if you don’t enjoy what you are doing, the chances are you will eventually want to get out of it. So be sure you really figure out if there is certain aspect of your profession that you really enjoy doing before diving all in.
Locate Underserved Customer Segments
Another thing to consider is thinking about what kind of segments within your local marketplace may not be being properly served. For instance, maybe there are a great deal of doctors in your area with no advisors catering to that group. Another scenario may be a specific need for education relating to an older demographic in your area, such as Social Security. These kinds of underserved segments can be a goldmine for advisors that learn how to tap into it. The reason for this opportunity exists is because none of your competitors are focusing on them and their needs.
Hone Your Professional Network
If you really want to take building a niche practice seriously, you need to build some great contacts within your industry. Not only do you want clients to see you as a professional in your particular niche, you also want other financial professionals to view you in that same light. More often than not, “would-be” competitors could turn out to be a core asset to your business by bringing in specialty clients that your niche specifically focuses on. If you can build reputation in a certain niche market within your area, eventually competitors can become referrals. For this reason, connecting with other niche professionals can become an extremely valuable resource as you start to dive into complex aspects of your niche market. Don’t undervalue networking in your related niche and as well as outside of it.
These few suggestions should point any financial advisor in the right direction to start in building their niche practice. And although building a niche can be both time consuming, and potentially expensive, the payoff can be equally as great. For more articles make sure to subscribe to our newsletter!