When advisors hear the words niche market, they often think about a specific type of person, like a business owner, widow, or pre-retiree. This is a misconception, though, because you can choose a niche market based on any of six categories: career, event, expertise, mindset/values, affinity, and demographics.
Let’s look a little closer at examples in each of those categories:
Career
Category 1, career, includes professions, employers or companies, and industries. Some examples that would fall into this category are attorneys, business owners, physicians, technology employees, health care employees, military personnel, Facebook employees, United Airlines pilots, and federal government employees.
Event
Category 2, event, includes money-in-motion events, life transitions, and life stages. Some examples include inheritance, death of spouse, kids leaving home, job change, employer IPO, starting a family, and retiring.
Expertise
Category 3, expertise, is a specific service, product, or solution you offer to solve a problem your niche has. Examples include special needs planning, exercising stock options, and divorce financial planning.
Mindset and Values
Category 4, mindset and values, includes religion, life philosophies, and cultural mindsets. Examples include Christians, socially responsible investors, and philanthropists.
Affinity
Category 5, affinity, describes common connections people share. These can be hobbies, interests, or lifestyles—for example, golfers, families who homeschool their children, RV snowbirds, and university alumni.
Demographics
Finally, Category 6 is demographics. This can be geographic area, gender, age, or generation—for example, residents of Durango, CO, baby boomers, divorced people, and women.
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As you can see, you have many options to consider when choosing a niche market. Some niche markets you may be considering could fall into more than one category.
For example, maybe you are looking at divorcing women as a niche. This falls into the demographics category of gender and marital status. It falls into the event category because divorce is a life transition and a money-in-motion event. And finally, it falls into expertise if you have a specialty in divorce financial planning.
Not all niches are going to be good options. For example, I generally recommend that advisors stay away from niches solely categorized by demographics, such as geographic region, generation, race, or gender. There is too much variation among these people in their financial needs.
In the next blog, I will discuss how to choose a niche that is right for you from one of the six categories.
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