To Niche or Not to Niche? Differentiating Your Advisory Firm
Dear Advisors,
When I launched my RIA (almost 3 years ago!), choosing a niche was top of mind. As a 3rd generation advisor, and being inspired by my grandad’s story, it seemed like an obvious choice to launch the first advisory firm to work solely with advisors on their personal financial plans and exit strategies.
When I chose my niche, there was a fear of turning down clients who don’t fit. Wouldn’t casting a wider net reach more people? Though it may seem counterintuitive, research supports that choosing a niche can be an even more successful growth strategy. As the financial industry continues to evolve, it has become harder and harder for advisors to differentiate themselves. The big question is a familiar one. To niche or not to niche, and how do I start? Here are some important things to consider when niching and how to connect to your ideal clients.
Benefits of Niching
Niching helps you say YES to clients who are the right fit. Turning down prospective clients can be scary, especially if you are just launching your firm! It is important to remember, choosing a niche isn’t saying “no,” but more about saying “yes.” You have limited time and resources. Being intentional to make room to say “yes” to your ideal client and refer out others is a great business strategy to consider!
Niching empowers you to spread the love! You will have prospects reach out to you that might not fit your niche, and you can choose on an individual basis to say yes or no. You may choose to take on clients outside of your niche initially and refer those clients out over time as your firm grows. No matter what, It will be important to have a referral list ready to point prospects you choose not to work with in the right direction. This mindset to share prospects with other vetted planners is essential to the growth of financial planning as a profession!
Niching helps clients FIND YOU. Niching down is also about making it easier for the right clients to find you. It is an ideal way to establish a business in our world where the internet and SEO make it easier to find things when they stand out from the crowd.
Before You Decide to Niche
Do some Soul-Searching and Make a List: Your niche might stand out immediately, but for most of us, it’ll take some soul-searching. Write down all the possibilities you can think of. It’s ok if it’s a long list; you’ll whittle it down.
Examine others in your industry: Who’s got something you want? Who do you not want to be like? This Kitces article on how to find a niche was helpful. It suggests asking your audience about your niche ideas, or asking them to suggest niche ideas, and then asking them to introduce you to someone else whose brain you could pick.
Do your research: Once you’ve met with several friends and/or acquaintances, collect and review all their feedback. Don’t be afraid to ask. People love to lend their wisdom and make connections. You might get a suggestion you’d have never thought of or validation of ideas you already had!
How to Choose Your Niche
First, let’s look at your target clientele. Who do you serve and what are their needs? Target markets are real people, but a niche is something you make. I’ll use Ellevate as an example. Our target market is advisors. Our niche is a subset of advisors who are willing to get vulnerable, make changes with a growth mindset, and see their net worth as a steward.
Next, consider your unique expertise. What standout skills can you bring to the table to serve your target clientele that they won’t get elsewhere? There are no other firms that exclusively work with financial advisors. We also offer exit planning, which means we have add-on expertise for planning with the end in mind. What skills or experience sets you apart?
Last, think of your service/business model. What actual services will you provide using your unique expertise and how will you get paid to serve your target clientele? For example, at Ellevate, we start with an initial financial plan and then transition to quarterly relationship meetings. Our financial planning process is tailored to our clients’ needs and dreams, which will evolve over time. Our periodic meetings will ensure that it evolves smoothly as needs and circumstances change. What could your process look like for your firm?
To niche or not to niche is a big decision, and I hope these pointers help you make the right decision for you and your firm. For me, the decision to niche was about aligning the work I do with the life I love. I enjoy being unique and value making a large impact. When I help an advisor with their own personal financial plan and goals, I know that it positively impacts not only their own family but their business growth and the clients they work with! This passion serves as a guiding light for business decisions and goals. This values-based approach to business is similar to values-based planning. As you consider the right choice for you, start with your values first and build the plan for your life and business around that!
Warm regards,
Brooklyn
At Ellevate Advisors, we believe that advisors deserve to retire too. What does that look like for you, your family, and your business? Let’s figure it out together! Get to know me on my bio here, or schedule your free consultation here.