Let’s face it, younger advisors are at a disadvantage when it comes to attracting new clients to a firm. They generally lack the network, relationships, and experience needed to convince prospective clients to work with them. In my experience, most advisors in their 20s and 30s working at independent firms today just don’t have the killer sales instinct that is stereotypical of financial advisors of the past. Instead, they tend to prioritize servicing existing clients over marketing and business development.

Many firm owners I talk to find this frustrating. They know that for the business to grow outside of their own efforts and to eventually transition the firm to the next generation, the younger advisors must learn the skills to bring in clients on their own. 

In defense of younger advisors, their employers rarely equip them with the marketing skills and knowledge they need. They are expected to pound the pavement in the same way the firm principals did to build the business. This expectation exists even though many of those tactics aren’t as effective today; nor are they a natural marketing style for the younger advisor’s personality type. 

If you are an owner of a financial advisor firm and find yourself in a situation with less-experienced advisors you hope to groom into the future leadership of your business, you would serve them well to coach them into working with a niche.

Why a Niche?

By focusing on a narrow subset of potential clients with similar characteristics and needs, younger advisors will benefit in many ways:

1. Working with a niche directs their time and attention. It guides them in knowing the people to network with, the centers of influence to meet, the events to attend, and the content to create.

2. It gives them a way to stand out from the crowd. When advisors are asked to market as generalists, they sound like everyone else, and younger advisors don’t have the years of experience to back up their claims. Specializing in a niche makes them unique. They can offer expertise that most other financial advisors can’t claim.   

3. When a younger advisor chooses a niche appropriate for their passion and aptitude, they take ownership. They step out of the owner’s shadow and into their own light.

4. They overcome the lack of a large network because they market themselves based on expertise within a niche, not the transfer of trust from long-standing personal or professional relationships.

5. After a year or two of attaining expertise with a niche, they overcome any perceived lack of experience (as measured by years).

6. When any advisor successfully positions themselves as an expert with a niche, they stop seeing what they do as marketing and start seeing it as sharing their knowledge and wisdom. This shift can help them overcome any apprehension around sales and marketing.

7. When an advisor works with a niche, bringing in clients is more achievable. They fish in a smaller pond, which makes it easier to catch the prospects they seek.

Keys to Success

While choosing a niche can be the path to success for a young advisor, it also has to be successful for the firm. Here are some points to consider when guiding a younger advisor toward a niche focus:

1. Make sure the chosen niche can be profitable immediately or in the near term (e.g., surgical residents, employees at companies with prospective IPOs). This may require a new creative pricing model if the niche doesn’t meet your asset minimum but has the income to support minimum fees.

2. The niche cannot contradict the firm’s overall mission and messaging. For example, if your firm has positioned itself as specializing in socially responsible investing, you shouldn’t have a niche focused on Exxon employees.

3. When the advisor starts a niche, do not change your website. Build a landing page dedicated to the new niche. You can link to that page from your homepage navigation or keep the page separate from your website, depending on your confidence level for the niche’s success. The landing page allows the advisor to test out the viability of a niche without the firm taking the risk of alienating current clients or losing out on other new business.

4. Allow the younger advisor the space needed to experiment and iterate. It may take them a little while to figure out the best way to market themselves to the niche. The key is to keep them inspired and motivated to do marketing. Even if the initial niche doesn’t work out, the process will teach them the skills and habits of marketing that can be used in future efforts.

About Kristen Luke

Kristen Luke is the President of Kaleido Creative Studio, a marketing agency specializing in helping RIAs promote their businesses to a niche through an expertise approach. Over the past 15 years, Kristen has consulted with hundreds of financial advisory firms and shared her marketing expertise via industry conferences and publications nationwide.