When Scott Winslow co-founded his financial advisory firm in Wilmington, N.C., nine years ago, he and his team provided a range of financial services. But that changed as retirees began to relocate at a rapid pace to the area and the team realized they were going to have to shift focus.

“All you had to do was ask a couple of real estate agents … they couldn’t find enough houses because of how the market here is booming,” said Winslow, managing partner of Nabell Winslow Investments & Wealth Management. “So we started realizing that we want to be all things retirement.”

The boutique firm, with three managing partners and five advisors, now focuses mainly on retirement income planning, largely because of this expanding market, Winslow said. But the switch did not happen overnight. He noted that he and his team first had to obtain the retirement income certified professional (RICP) designation from the American College of Financial Services. It also was important for the team to build close relationships with other professionals, including certified public accountants and corporate attorneys.
 
“We get the best team possible and build that up so the client can look around the table and say ‘Hey, I got this covered,’” Winslow said.

As consolidation continues in the registered investment advisory industry and demographics continue to change, many firms have been prompted to develop specialties. Winslow was one of three advisors who recently spoke on the topic during a webcast, discussing the ways their firms narrowed focus to respond to the evolving needs of their clients.

The webcast, titled, “Why Now Is The Right Time For RIAs To Specialize,” was sponsored by the American College of Financial Services and moderated by Michael Finke, a professor of wealth management and director for the Granum Center for Financial Security at the college.

Panelist Heather Welsh,  a vice president at Akron, Ohio-based Sequoia Financial Group, said her firm’s growth has afforded it the opportunity to develop specialty teams. She noted that when she began with Sequoia 15 years ago, there were 20 employees. Today there are 190. “So going from wearing many hats to being able to drill down and really develop specialization has been an incredible benefit of our continued growth,” she said.

Welsh is one of six technical planning experts on the wealth planning team at her firm. Sequoia has also built out an asset management department focusing on areas such as portfolio management and research. Another team at the firm handles just wealthy clients with a net worth of $25 million or more. The firm also has sub-specializations within its wealth planning team that include advisors with the RICP designation, a CPA and an accredited estate planner (AEP).

She said it’s all about getting the best minds together to come up with solutions. “So if somebody has a nuanced question in retirement income planning, they know they can pick up the phone and call the RICP designation, or if we are getting into nuanced estate planning, they can call the AEP, so that everybody can really come together with those best thoughts to have that collaborative approach.”

The advisors said continuing education is essential for advisors who want to stay current on all the different aspects of financial planning, and they credit the American College with helping them. “We have taken a lot of classes. It’s a lifetime learning,” Winslow said. “If you don’t keep up with your credentials and your knowledge base, you will fall behind.”

He added that clients can sense when you are faking it, and Finke added that “Fake it till you make it” is the wrong attitude.

“Clients can smell a lack of capability,” Finke said. “They can tell you don’t know what you are talking about. And as soon as you let that slip, then no one is going to recommend a client to you.” Why? Because other professionals who recommend you are also putting their own reputations on the line.

Finke added that younger advisors usually cast a wide net and take on every opportunity they can, but in many cases it’s better, he said, that they acknowledge what they don’t know and focus on what they are good at, “and then you can get those referrals as opposed to just being in the right place at the right time,” he said.

Another panelist, Terry Parham Jr., a co-founder of the year-old firm Innovative Wealth Building, noted that he heavily subscribes to content from the American College and other external sources like financial planner Michael Kitces and other successful advisors. “I think I have five designations and a few more to go,” he said, noting that the knowledge he has gained has helped him find the most value in his firm, which he said specializes in retirement income planning, primarily for business owners.

His firm is based in Los Angeles, and Parham noted, “It seems like every person in L.A. either [acts] part-time, has a small business or is a musician on weekends. So, we are developing some specialized expertise there.” But Parham, who serves as chief financial officer for the four-person firm, which also has an office in California, Md., said referrals have become a big part of his business. He noted that the firm’s CEO, Warren Brooks, has worked in the same area in Maryland for more than 20 years and “has created a sort of gravity where if someone becomes a client, they refer their sister, brother and cousin. So, we have this continual wave of referrals,” he said. 

The firm also sponsors events such as client appreciation day and monthly educational webinars, and its social media team pushes out a healthy dose of educational content, including one-minute videos. “It’s a whole team effort for serving our clients and just serving the greater population with financial information,” Parham said. “It’s been an exciting journey so far,” he added, noting that the firm has gone from zero assets under management to more than $300 million.

Parham, who has been in the industry for 10 years, said he saw the value of specialization early in his career when he cultivated relationships with active-duty military clients. “I found ways to visually get them involved in the learning process and to help inspire them to move forward, and that’s when my income and my success quadrupled,” he said.

“The firms that deliver the most value are the ones that drill deep,” he said, noting that specialists, whether they are doctors, dentists or other professionals, “typically end up making more money and providing more value than the generalist.”

Finke agreed. The financial planning industry, he said, is a relatively young profession compared to others like medicine and law. “So I think what you are seeing is, as this profession matures, there’s an increasing movement to resemble some of these other more mature professions where you see more specializations,” he said. “Retirement planning seems to be a big growth field for specialization in financial planning, potentially because of demographics.”