As a financial planner, building your own advisory practice requires hard work and hustle. There is plenty of competition. According to the Bureau of Labor Statistics, an estimated 263,000 personal financial advisors were employed in the United States in 2019, and an additional 11,600 are expected to join the ranks by 2029.

So what's the best way to stand apart from the crowd and establish a successful practice? Try these tips from advisors who have years of experience in the fieldand who have learned via trial and error what works and what doesn't in the financial planning industry.

Key Takeaways

  • One way financial planners can establish themselves is by finding a market niche, be it female entrepreneurs, widows or dentists.
  • It also helps to understand each client's mission, vision, values and goals.
  • Volunteering in the community is a great way for financial planners to build relationships that may one day turn into a client relationship.
  • Finally, financial planners should not overlook the needs of young people, who stand to inherit trillions of dollars in assets in the coming years.

Find Your Market Niche

Pamela Plick, a Certified Financial Planner (CFP) with more than 25 years of experience, found success as a "money mentor to women." Her practice focuses on providing women with the education, strategies and tools they need to become more financially confident and secure.

"As financial planners, we cannot be all things to all people," Plick says. "By targeting a niche, you become an expert in the providing solutions for this particular group."

For example, Plick says you can choose to work with female entrepreneurs, widows or dentists, or the niche can also be based on location. "Or, you could target retirees in a certain gated community or country club," she says.

Plick also advises financial planners to concentrate on what's important and what you are good at and delegating or outsourcing the rest. "Focus on important tasks like marketing, networking and meeting with clients," she says. "If you can, outsource the administrative tasks."

Understand Your Client's Mission, Vision, Value and Goals

Leonard Wright, wealth management advisor at Northwestern Mutual, has been a financial planner since 1995. He realized his calling after a one-hour conversation helped a former employee save for a home and retirement.

Good financial planners, Wright says, get to know their client's mission, vision, values and goals. "While they may not know them specifically, it is our job to bring them out," he says.

"If the planning and advice related to the planning does not connect to the client's mission, vision, values and goals, the client will migrate away. If the client does not understand why the advisor makes recommendations for their benefit, they will wonder why the advisor does what they recommend and have an instinctive emotional reaction to seek someone that understands them."

Get Involved With Your Community

Steven Kolinsky, who founded Kolinsky Wealth Management in 1982, focuses on the client relationship and not the investment product. He advises getting to know your community and getting involved in your town.

"Being generous with your time and talent in your community raises your profile and lets you get to know the people around you," Kolinsky says. "We recently had a meeting with a young couple who was not ready to invest, but was looking for advice about their financial parameters in buying their first home."

Kolinsky says that connecting with local Certified Public Accountants (CPAs) is a great way to improve your assets under management.

"A great deal of business has been referred to us through the genuine relationships we have cultivated with CPAs, showing them how we do business and that they can entrust their clients to us. These relationships have taken time to build, but have been mutually beneficial."

Aim for Younger Clients

There's a dramatic shift in assets underway, and it's trending toward younger investors. Coldwell Banker Global Luxury estimated that Millennials will inherit $68 trillion in assets by 2030, increasing their wealth by five times what it is today.

"The key takeaway is servicing the younger generation doesn't have to dramatically change an advisor's practice management and recommendations," says Jill Jacques, global financial services lead and partner at North Highland. "Instead, it's all about incorporating engaging online and in-person tools that will create a two-way conversation to stay relevant to evolving audiences."

Jacques recommends that financial advisors build a younger audience by courting them on social media.

Prune Your Client List

When it comes to maintaining a roster of clients, more clients doesn't necessarily translate into more income. While it's true that financial advisors just starting in the business need to add clients to grow their revenue, the highest-income earners serve fewer clients, not more.

Financial advisors who earned less than $150,000 annually had 167 client households on average, according to 2012 study from CEG Worldwide. Those earning between $150,000 and $500,000 annually had an average of 225 clients, while those earning between $500,000 and $1 million had 240 clients on average. But once financial advisors top $1 million in annual earnings, the number of clients they serve drops off significantly, to 179 on average.

Having fewer clients allows financial advisors to give high-net-worth individuals special attention. And as the numbers suggest, less is actually more: the highest-income earners had an average of 83 clients who had at least $1 million in assets invested with them.

The Bottom Line

As the above experts show, working as a financial planner can be both personally and financially rewarding. Building a better financial advisory practice is all about focusing on a few game-changing steps and doing them well.

"If you are knowledgeable about the products you recommend, continue to educate yourself on the investment industry, and always put your clients needs above your own, that's a great head start," Kolinsky says.

Beyond that, be creative, get out there in the community and online, and build your own unique financial advisory brandone that keeps you a step or two ahead of your competition.