Advisors who successfully develop a niche practice design all aspects of their business to serve that niche. A niche is not only the “who” you work with but also the service you specialize in to help your target market. It is the “who” plus the “what.”

A niche is a deeper commitment to your ideal client in that it dictates the brand you select, the message you communicate, the services you offer, the content you create, the technology you implement, and the staff you hire. 

Let me give you an example of what it truly means to niche.

Many firms describe their ideal client as business owners who are 55 to 65 years old, within five years of retirement, and delegators. They have at least $1 million in investable assets, with more assets coming in after the sale of their business. 

Some firms will offer their standard retirement planning and investment management services to these business owners. There isn’t much the firm does differently for business owners than for other clients. The client just happens to be a business owner. The presentations the advisors give are on general economic and financial topics that would appeal to a mass market.

While these firms have a clear idea of “who,” I wouldn’t consider them focused on a niche. They don’t combine the who with the what.  

In contrast, a firm that has designed their entire service offering around business owners would look something like this: They offer business valuation services and exit strategies in addition to investment management and financial planning. Their process and services are intentionally designed to meet the unique needs of their niche. They bring in speakers specific to the topics business owners care about, such as business succession options. They make introductions to business brokers who can help list the businesses. They offer software for business owners to do basic business valuations each year to see how they are progressing toward their goals. And they hire staff who are passionate about and have experience in serving small businesses.

In this second scenario, business owners receive greater value because the solutions are tailored to their needs and concerns.

How do you develop a business model tailored to the exact needs of your niche? There are four elements:

Proprietary Process

A proprietary process is the unique path that your company follows to achieve transformative results for your clients. Most financial advisors take their clients through a similar process: information gathering, goal setting, analysis and recommendation, implementation, and monitoring.

Your proprietary process should offer a unique way of achieving results, even if it is just changing the names of the process steps to speak the language of your niche.

Client Experience

Working with a niche will also give you the opportunity to create a unique client experience. The client experience includes your office, staff, deliverables, and technology.

What type of office environment, if any, does your client want to visit? What skills does your staff need to have? What deliverables does your niche want to see? What special technology will best serve your niche?

Services 

Not all services falling under comprehensive financial planning (e.g., investment management, financial planning, retirement planning, tax planning, estate planning, and risk management) apply to your niche. There also may be some services important to your niche that most advisors don’t offer. For example, if you work with business owners, you may need to provide business succession planning.

Customize your services and how you describe them to be most impactful for your ideal client. For example, if you work with multigenerational families, you may want to include “family legacy planning” instead of estate planning.

Pricing 

Your pricing should reflect what makes sense for your niche. For example, you may have a niche that is high earning but doesn’t have investable assets. A traditional AUM fee model won’t work unless you are willing to take a loss for several years, hoping they’ll eventually have the assets to be profitable.

If you want to get paid for your advice when you give it, you may need to develop a creative pricing model for your niche to be profitable. You may have to consider options outside of AUM, such as hourly, project-based, subscription, commission, flat fee, and percentage of net worth.

Final Thoughts

Your goal as a financial advisor serving a niche is to become uncomparable, meaning no competitors can even compare with you in the eyes of your prospective clients. To achieve this, you need to combine the who (your niche) with the what (how you serve your niche). When designing your “what,” look at your proprietary process, client experience, services, and pricing. By specifically designing these four elements for your niche, you create an uncomparable business model.

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 16 years, Kristen has consulted with hundreds of financial advisory firms and shared her marketing expertise via industry conferences and publications nationwide. This article is an excerpt from her upcoming book, due out in 2023.