Whether you are currently a financial advisor with a long clientele list or a newbie looking to build your book, have you ever considered focusing your efforts on a particular type of client?
If you have, you may wonder where to start. After all, you'll be dealing with these individuals for the rest of your career, so you had better make the right choices from the outset.
One place to begin is within your client base. We'll show you how to hone in on the type of clients you want.
- As a financial advisor, you may find it tough to compete against a growing field of advisors and planners.
- Financial advisors can make a name for themselves—and a successful business—by staking out a specialized group of clients.
- Here, we provide some helpful tips in starting to plan for getting your niche market.
Sifting for Gold
First, start by printing out a list of your clients. You might want to grab a few highlighters of various colors. We'll use green, yellow and pink. Now, slowly go down the list and stop at each name. Imagine what it's like to work with each person.
Let's say the first one is Ms. Jones. She's pleasant, open to new ideas and committed to following the plan you put together. When the markets take a tumble, she realizes that volatility is just part of long-term investing. She has referred a few co-workers to you and continually puts away money each month. If all of your clients were like her, life would be peachy. She's a gold nugget. Highlight this one: green.
Next on your list is Mr. Smith. When he calls, you reach for the antacids. He complains about your fees, how the neighbor makes more on his investments than he does and how the guy on the radio said your recommendations stink. Do you want more like him? Heck no! Highlight this one: pink.
A number of other clients will likely fall somewhere between the Ms. Joneses and the Mr. Smiths. Highlight these clients: yellow.
Look for Common Traits
Now, let's revisit the clients in the green group. Look for commonalities between these clients. For instance:
The possibilities are endless, and this is just the beginning. Next, you need to fine-tune your results.
Suppose that women, ages 35 to 55, make up most of your "green" group. What do they have in common, beside gender? Some commonalities might be their marital status, occupation, net worth, number of dependents (if any), etc. For example, let's say the majority of this gold-nugget group are unmarried, and they own their own companies. Now you have something to sink your teeth into: Women, ages 35 to 55, single, business owners.
After you've done this exercise with your "green" group, do the same with the "yellow" group. You might uncover a few more great clients who just need some of your time to become "green" clients.
Consider Client Concerns
Your next step will be to consider what financial concerns these clients share.
A few of them could be:
To address these concerns you might offer products such as:
- Medical insurance
- Disability insurance
- Certificates of deposit (CDs)
- Traditional IRAs
- Simplified Employee Pension (SEP)
- Keogh Plans
Clone Your Best Clients
Now that you know whom you enjoy working with, their common problems and how you meet their needs, you'll want more people just like them.
One proactive approach is to find out what organizations they belong to, such as:
- Professional organizations
- Social clubs
- Charitable foundations
A good strategy is to become involved with these organizations. There are a number of ways to do this:
- Write articles for their newsletters. Most organizations have a monthly newsletter and their editors are almost always looking for interesting pieces that relate to their members. Be sure to include your contact number in the article and, if possible, a photo is often beneficial as well.
- Offer to speak. Program chairmen often need speakers. Let them know that you're available, even as a substitute in case the scheduled person doesn't show up.
Either way, networking will definitely take work. However, over time you'll get close to people who are your ideal clients. In some cases, you may be the only financial advisor they know, but even if they never decide to work with you, at least you've contributed to a worthwhile cause.
What if I Have No Clients?
Suppose you're new to the business and have no clients. No problem. You can determine your niche by using the same strategy. For example, what's your No.1 hobby?
Let's say you live and breathe golf and you know the golf pros at every course for miles around. These guys can pair you up for a round of golf with qualified prospects. What generally happens when you're riding around in a golf cart for three to four hours? Sooner or later the other person will ask: "What do you for a living?"
Imagine how great it will feel to have clients who are as passionate about the game as you are.
It won't happen overnight, but after people see you around the club, they'll feel like they know you and will be more likely to choose you when they need the help of a financial professional.
The Bottom Line
Follow these steps and you'll be on your way to developing a productive and satisfying niche market that'll be packed with great clients.