What You Need to Know about Niches

  Are you confused about niches?

Why do you need one?

What exactly is a niche?

How can you find yours?

Is there an easy way to find your niche?

What You Need to Know about Niches

What's all this excitement about niches? All the thought leaders advise you to get one.

NAPFA recommends advisors increase their growth and profitability by getting a niche.

FPA frequently recommends you should have a clearly defined niche.

Michael Kitces says, " The practice management advice is almost ubiquitous - if you run a financial planning practice, you should eventually carve out a specialized niche for yourself... It's easier to refer to you if you have a niche."

Everyone agrees having a niche is the key for financial advisors to stand out from the crowd. It's the paved highway to a thriving independent financial advisory practice.

When asked, most advisors will say their niche is "retirees and pre-retirees." That's a huge niche. Most advisors like having a big niche because they think it gives them more opportunity. But it doesn't. If that's your niche, you don't stand out from the crowd. You're like everybody else.

Also, you assume that everybody in this you group thinks alike and have the same needs and problems. They don't. You can't possibly address their special problems and needs.

A good niche will make your marketing easy and produce results. A poor niche will make marketing hard and produce poor results.

What a Rich Niche Is

Here's what makes for a niche that makes marketing easy and produces results. It's what I call a rich niche.

A rich niche is an identifiable group who have these characteristics...

• First and foremost, they are easy to find. It takes little effort to locate members and find their contact information.
   
• Next, they have a common need for your services with a history of using financial professionals.
   
• Last but not least, they have sufficient assets to make serving them worth your time.

For instance, a niche of executive assistants would be easy to find, but most would not be affluent. Generally they do not have the assets that would make it worth your time.

On the other hand, Boeing executives nearing retirement would be a rich niche.

Wholesalers have told me their advisors who specialize in serving a specific business or organization are among the most successful.

If you're have a niche and you're still struggling to build your practice, it's probably because they are not easy to find, not affluent, and/or are not the type who hire professional help.

Like I said, you want to specialize in serving a specific, easily identifiable, affluent segment of the market. This can be as clear and simple as dentists, plastic surgeons, or Boeing executives, to name a few.

The above examples meet the criteria of a rich niche...

• They have assets to invest.
• They have things in common – same values, interests, problems and needs. That makes it easy to address these issues.
• They congregate in groups that are easy to find. You don't have to burn up time and energy trying to find your prospects.

Finding your niche

So now that you understand what to look for to have a rich niche, where can you find one? A good place to start is among you present clients. Check to see how many of your best clients have the same occupation or other commonalities and meet the criteria for a rich niche.

Upon examination, one advisor discovered he had several high-level retired executives he enjoyed working with and they were very profitable. He made his niche retired top-level executives. He focused his marketing efforts on this group and was fairly successful.

Another financial advisor discovered he had enjoyable, lucrative clients who were plastic surgeons in his city. This is a much better niche, more specific. It was easier to tune into their thinking, culture and language. They also were very easy to find.

When he wrote his marketing messages he started it by saying he specialized in serving plastic surgeons. That not only got the attention of plastic surgeons, everybody knew exactly whom they should refer.

Imagine the kind of word-of-mouth he had, "My financial advisor specializes in plastic surgeons like us." That really got the interest of his clients' colleagues and positioned him as the go-to advisor for plastic surgeons.

Bottom Line

So there you have it. Carving out a specific niche that meets certain criteria can help you grow your business easier and faster than you ever thought possible.

Do you have a rich niche? If so, how did you find yours? Readers would love to know.

Best,
Stan