Advisor Mark Pitre of California Financial Advisor put it straight. “In this industry, to be successful, you have to want to help people first and foremost,” he told “Without that being your main objective, you will struggle as an advisor.”

While expanding your offering can help you reach more clients, it can put you at risk of being too broad in your offering. For many FAs, especially those in or near urban centers, the answer is to zero in on a particular client type. The focus could be a profession, or an employer, or a stage in life. Focusing on a niche can muffle direct competition and help you stand out in a crowded market — to become, as they say, a big fish in a small pond.

Competing for Value

With the advent of artificial-intelligence-powered, smartphone-deliverable “robo” advisors, and with the increasing commoditization of investment products, advisors have to offer more value to compete these days.

You might be thinking, shouldn't I expand my offering to as many different people as possible if I want more clients?

There are plenty of garden-variety advisors out there, as a random survey of their websites demonstrate. There's a big difference between a generic value proposition like "We provide financial planning advice customized to the needs of our clients" and a specific statement such as "We help new business owners organize their books and make smart investment decisions based upon personalized advice, curated by our team of specialists who have a passion for helping entrepreneurs."

Establishing a niche may indeed mean chasing a smaller pool of clients, but — for the very reason it's because it's smaller — it's easier to defend and promote. Without a niche, you're competing for value with every other generalist out there.

Why Clients Prefer Specialization


By, for instance, focusing on employees of one company, you’ll learn details such as when they get paid, how their stock options work — perhaps even how much they may be making at that company five or 10 or 20 years hence. Focus on a particular industry, and you’ll recommend investment portfolios with less sector overlap. As further aids to your advice, you’ll start to understand when clients in areas like energy or retail may experience cash-flow shortfalls and surpluses.

In short, you’ll be an expert in your clients’ field as well as your own. This will equip you to have deeper conversations with clients and offer more holistic advice. As clients come to appreciate a personalized approach based on advice adapted to their circumstances, they will:

  • Stick around (client retention)
  • Send more referrals your way
  • Provide glowing reviews (important now that the SEC is thinking about letting RIAs post testimonials, as Finra already does)
  • Enhance your firm’s valuation

How Can Advisors Determine A Target Market?

The bare concept of creating a niche is applicable even to advisors in small towns and rural areas. For advisors in this category, it’s imperative to figure out what employment sectors dominate your region ( can help), examine the issues executives in those occupations tend to face, and get up to speed on solutions. You may have to carve out several niches — say, education and healthcare — but the extra effort can pay off in relatively streamlined business-development efforts.

Building any niche calls for this sort of due diligence anyway, whether your practice is rural or urban. No matter where you are, you have to weigh the niche (or niches) you’re considering to make sure it provides a large enough market for you to stake a claim and carve out a thriving business. 1 With that research done, and a niche selected, it’s time to tailor your service and product offerings to clients within your niche. This requires study and thought, and your “learnings” on these matters must begin to permeate your practice. Over time and with more experience, this work will inform everything from the questions you ask clients and prospects to the decor of your office — it may even help determine if you need an office.

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