Read this today's Wall Street Journal and had to share. So who here is focusing on a niche market and how has your experience so far? Feel free to comment below.
More than half of advisers in a survey said they plan to add new niches as part of their growth strategy
More financial advisers plan to target new groups of potential clients this year.
According to a survey released Wednesday by TD Ameritrade Inc., 53% of advisers plan to add new niches this year as part of their growth strategy. When TD Ameritrade asked a similar question a year ago, only 31% of advisers planned to add a new niche in the following six months.
The company surveyed 302 independent registered investment advisers at firms managing an average of $265 million in client assets.
For advisers, targeting a particular group of clients can be “an enjoyable way to grow their practice,” says Vanessa Oligino, director, business performance solutions at the TD Ameritrade Institutional unit in Jersey City, N.J. For example, she knows of an adviser who played college-level hockey and who carved out a niche working with other former college hockey players. Not only did he become more passionate about his work, the focus also provided him with a steady stream of referrals, she says.
Stephen Wershing, president of a consulting and coaching firm for advisers in Rochester, N.Y., has seen an increase in advisers who want to focus on particular client groups.
Mr. Wershing says advisers who wish to do so should look through their client base for “themes.” For example, advisers will want to see if many clients work in a single profession or went to the same school. This will help the adviser identify niches they may already be working in, possibly without being aware of it.
Get as specific as possible when deciding on your niche, says Al Depman, a practice-management coach in Rochester, Minn. Instead of targeting doctors, narrow it down to pediatricians, for example. Each subgroup within a broader population is likely to have specific needs, he says. The better the adviser understands the needs of a smaller group, the better he or she can serve those clients and appeal to others in the same group.
Advisers will also want to consider the type of clients they like to help. If advisers enjoy the niche, they are more likely to be successful, Mr. Wershing says.
Don’t target a niche—say, widows—just because that group may be growing or is wealthy, says April Rudin, a branding consultant in New York who works with advisers.
She recently counseled two young female advisers to focus on young entrepreneurial women instead of older widows, as they had initially planned. “They knew nothing about widows, and widows wouldn’t have taken them seriously,” she says. It helps to focus on a cohort that the adviser is a part of, she says.
Taylor Schulte is a 30-year-old adviser who is doing just that.
He plans to target high-income young professionals in their 30s and 40s this year. The founder of Define Financial in San Diego says he is targeting this group in part to “inject youth” into his practice, which has a lot of retired clients.
Mr. Schulte felt this younger market wasn’t well served by the big brokerage firms. Plus, “I can relate to where these individuals are in their lives,” he says.