If you follow my writing, you know that I generally recommend that RIAs focus on just one niche. However, for some firms, that approach can hinder growth. An RIA managing more than $1 billion in AUM may find it too limiting to market to a single niche. While being a generalist firm is one option, a second solution is to adopt a multiple-niche approach.
A multiple-niche approach can take several forms. The most common strategy is for an RIA to look at its book of business and categorize its client base. For example, here are some common niches I’ve seen when firms pursue a multiple-niche approach: business owners, executives, women in transition, and the health care industry. The firm then begins executing marketing tactics for each niche.
While this approach certainly can work, it is challenging to weave one compelling company message through all the different niches without resorting to something cliché like “Helping Affluent Individuals and Families Achieve Peace of Mind” or “Helping You Achieve the Retirement of Your Dreams.”
A second, less common approach is for the firm to focus on multiple niches that have a throughline connecting them. Let’s say the common theme is helping executives manage their equity compensation. One advisor team can focus on executives in the biotech industry, another may focus on the oil and gas industry, and a third may focus on the telecommunications industry.
Let’s see how you would implement this second approach.
Step 1: Pick a Common Throughline
The first step is to pick a throughline connecting the different niches you will serve. What is the one problem that you want to solve for all your niches? Do you want to help executives navigate the complexities of their equity compensation? Do you want to help professionals with pension plans maximize their benefits as they retire? Or do you want to help people in high-stress careers become financially independent and retire early? You will use this common throughline as the core company message that ties all the niches together.
Illustration by Ana Popović.
Step 2: Identify Niches
With a common theme identified, you want to pick the niches that fall into that theme. If you are helping professionals with pension plans maximize their benefits as they retire, you may work with employees in the federal, state, or local governments and publicly traded companies that still offer pensions. If you are helping people in high-stress careers become financially independent and retire early, you may choose niches such as law, health care, and tech.
Step 3: Assign a Team and a Leader
Once you have defined your niches, assign an advisor team to focus on each niche. The senior advisor on the team usually leads this effort, but it can also be led by a more junior advisor with ambitions of becoming an equity partner. The leader should have some experience with the niche and be dedicated to this marketing effort. They should also receive the time and resources needed to make the niche succeed.
Step 4: Add Niche Webpages
Before you start marketing to a particular niche, add a page to your website dedicated to the niche, and include that page in your main navigation menu. This webpage reinforces your specialty to prospective clients who research your firm. This step should be repeated for each of the niches.
Step 5: Create Tailored Marketing Campaigns
With webpages in place, build tailored marketing campaigns for each niche. This can include creating targeted content, such as blog posts or videos, addressing the specific needs and concerns of the niche. The step can also include social media, email marketing, and direct mail campaigns to reach potential clients in each niche. Finally, you may choose to have live or online marketing events for each of your niches.
Step 6: Network and Build Partnerships
The final step is for each advisor team to network and build partnerships within their niche community. This can include attending industry events and conferences, joining industry groups and associations, and building relationships with other professionals in the niche for referrals.
Final Thoughts
Pursuing a multiple-niche approach can accelerate growth for RIAs managing more than $1 billion in AUM. However, the danger is that the messaging will get watered down. Creating a throughline connecting all the niches will inspire more effective messaging. Once the connecting theme is identified, you can then give your niches the resources they need to succeed. The focused effort becomes a win for your firm as you now stand out from the competition with a profitable multi-niche approach.
About Kristen Luke
Kristen Luke is the President of Kaleido Creative Studio, a marketing consulting firm that positions Registered Investment Advisors and their employees as experts in a niche, making them “uncomparable” to other advisors. Over the past 17 years, Kristen has consulted with hundreds of financial advisory firms and shared her marketing expertise via industry conferences and publications nationwide.