5 Steps for Advisors to Build a Niche Market

In an earlier post, I made the case for niche marketing. Were you intrigued? Skeptical? Heard some of it before but failed to act?  If you’re on the fence, or ready to dive deeper, this is your chance.

You don’t just pick a niche out of a hat. You need a well-thought-out approach to selecting and targeting a segment that will give you the kind of growth, differentiation, share of wallet and referrals that you crave.

1. Look at your book.

When was the last time you scrutinized your client base, looking for commonalities? Most advisors segment their books by AUM or revenue to the firm.  Take a second look from the client’s perspective, you might already be catering to a niche and don’t even realize it.  Tier them many ways – by profession, life stage, service model, and profitability, just to name a few.

We’ve even got a segmentation worksheet that will let you slice and dice your clients (so to speak) using 17 different factors.

2. Put on your thinking cap.

Once you’ve evaluated your book, what are the potential segments that might be worth your attention? Ask yourself (or better yet, bounce the ideas off someone you trust):

  • Is the niche big enough?
  • Is the focus narrow enough?
  • Is another advisor already cornering this market

Be creative here. “High-net-worth investors” is hardly a niche. Maybe there is a blend of demographic traits that is a good fit:

  • High-wage-earning women within five years of retirement
  • Manufacturing-business owners aged 50 and older
  • Investors within a 30-minute radius from your office who are within 10 years of retirement from a large corporation based in your area
  • Recent retirees who are new to your area

3. Don’t be too quick to decide.

Hopefully, you’ve come up with two or three segments that look promising. Now is the time to do a SWOT analysis (strengths, weaknesses, opportunities, threats). If you’ve never done one, here’s an excellent video on how to do a SWOT analysis. This approach can help you evaluate your selections and make a better informed business decision.

Factor in any of your passions or dislikes (if you are not a particularly religious person, a focus on a particular religious group may be perceived as disingenuous).

4. Go all out.

Once you’ve SWOT’ted (did I just make up that word?), and have settled on a niche to pursue, it’s time to:

  • Learn as much as you can about that segment
  • Identify centers of influence
  • Ask clients for referrals

Make yourself a rock star in that community. Go where they go, host workshops, live and breathe them. As an example, one advisor hosts presentations with the local sheriff on identity theft – something that many non-techy retirees are concerned about these days.

5. Build and be your brand.

Strong niches demand a strong brand identity. You need to be clear about what you bring to the table. You have to define who you are in everything you do – signage, letterhead, proposals, statements, all of it. And you need a succinct value proposition – for example: “I help business owners within five years of retirement transform a lifetime of work into long-term security.” In less than 20 words, you defined your niche, what you do for them and what benefit they get from working with you.

Research shows that advisors who focus on a targeted audience are more successful than advisors who don’t focus on a niche.  Now is the time to get started.

John Anderson

John Anderson

John Anderson is the creator and lead author of Practically Speaking blog and Managing Director of Practice Management Solutions for the SEI Advisor Network.

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