Written by: Javi Otero
Why Advisors Should Consider Niching Down During a Transition
When starting or joining an RIA, it’s important to consider all aspects of the process – from real estate and staffing to technology and the transition process. One category that can often be overlooked, or ranked lower on the priority list, is marketing. However, for those interested in creating a solid foundation with immediate success and an effective strategy for future growth, it’s arguably one of the most important aspects to focus on. In this article, we address the significance of having a clearly defined niche for your advisory business and some benefits associated with niching down during a transition.
Advisor Transition Services team members Grier Rubeling and Javi Otero recently sat down with Zeke Silvani of Tango Marketing to discuss the topic of niching down. The conversation was insightful, practical, and (at times) blunt. What follows is a summarized version of what we discussed and why the topic should be a priority for advisors preparing to “launch” a business.
The Advisor Argument Against Niching Down
Advisors in transition, especially those coming from a more traditional wirehouse model, often don’t consider exploring the concept of niching down because they’re concerned with the idea of “leaving money on the table”. Many have an irrational fear of alienating part of their current client base by focusing their marketing and service model on a particular market. The belief that clients will somehow be negatively affected by a more clearly defined niche is a misconception.
Niching down does not have to be about exclusion. Instead, consider it a strategy for establishing clarity. When the target market is clearly defined, marketing strategy becomes easier. The messaging is more specific, content creation is simplified, SEO is stronger, and everything becomes more cohesive. You can speak directly to your ideal client and create solutions to address their specific needs and points of pain.
A direct quote from our conversation sums it up: “If your niche is actionable, profitable, and aligned with your strengths – you win.”
Why A Transition Is the Perfect Time to Refine Your Focus
All too often, we witness an advisor or team fall victim to common transition “blind spots”. Treating the process as though it’s a temporary project or nuisance, instead of the establishment of a new business and an opportunity to be intentional.
Ask yourself, are all the relationships you currently manage going to be a true fit for the new business you’re building? Consider the future. Use the time to clearly define who you want to serve and how you want to serve them. The revenue you generate from a household should not be the only factor taken into consideration. Arguably, that data point should rank low on the priority list. The upside potential you’ll gain from the move will more than make up for some of the revenue left behind.
Study your current book of business. Ask yourself who you enjoy working with. Who values your advice and time? What relationships are the strongest, based on mutual trust and appreciation? Build a practice that will serve those people and others like them.
Questions to Make You Think:
- Who do I serve best?
- What do my best clients have in common?
- What topics do I feel most confident advising on?
- Do I have any special skills or experience?
- What are my biggest differentiators?
The answers to these questions will help you choose a niche, define your model, and craft your messaging from Day 1.
Defining Your Niche
Some advisors are turned off by the idea of choosing a niche because their idea of what a niche is can be narrow and limiting. There aren’t enough “left-handed dentists who collect rare coins” to start building a business with that crowd in mind. A niche is meant to make it easier to find your ideal client, not harder. It should be targeted but also scalable and searchable.
An example we used in our recent discussion was government employees. A segment that has unique benefits, retirement structures, and decision-making timelines. Allowing for an advisor to market to a group of people about pensions, TSPs, and survivor benefits. By creating content that can simplify complicated concepts, one can more easily become a subject matter expert in the field. A clearly defined niche can also make prospecting easier using data tools and more frequent referral opportunities.
Contrasted with a niche that could be considered too narrow, like “wine lovers”. It may be something that aligns with your personal interests but could be harder to scale and tough to target from a value-added aspect. Now, if you took your love for wine and considered a closely related group such as wine collectors, you might be able to broaden your target market and land on something like “collectors”. People who put a great deal of time, effort, and money into something that may bring them joy and possibly generate them future income. Consider the possibilities of marketing to a group of that nature and the ease with which you could find prospects.
Debunking Some Common Myths About Niching Down
MYTH: “I’m going to lose current clients!”
You choosing to define a target market will not alienate your current client base if you craft the message correctly. Your clients are smart. They will absolutely understand your efforts to refine your focus when establishing a new business. Their relationship with you was built on trust. If anything, they could have an easier time referring others to you if they can communicate who you work with and how.
MYTH: “I don’t know how to market because I haven’t done it.”
Marketing doesn’t have to be difficult. You don’t need to know how to build a website or create beautiful content. In fact, a defined niche should help you be able to come up with more ideas. Define who you’re speaking to and the ideas for how to do that will come. A simple blog post or social media post answering a common question your target market has can go a long way.
MYTH: “Unique marketing is too hard to get approved.”
Yes, it was. Which is why you’re considering a transition and choosing a level of independence that allows you to make decisions that are in the best interest of you and your clients. With great freedom comes great responsibility. If you’re starting an RIA, you are the one who decides what gets approved. The more unique, the better situated you will be to stand out.
Practical Steps to Create a Niche-Focused Strategy
Whether you’re starting an RIA or joining an existing one, we recommend you consider adding a few steps to your process:
- Audit your book: Identify trends. Consider average age, occupation, geography, asset size, and personality types.
- Pick a scalable niche: Make sure there’s room to grow. Think in terms of community, profession, or shared financial concerns.
- Consider your messaging: Will you do webinars, posts on LinkedIn, or blog posts that speak directly to your target market?
- Build referral loops: Happy clients in a specific niche will talk to their friends. Encourage introductions.
- Invest in branding: Your firm name, tagline, website, and visuals should reflect your target audience and tone.
Final Thoughts: Reintroduce Yourself
A transition isn’t just a firm change – it’s your grand opening. The messaging you use now, the clients you choose to bring with you, and the community you choose to serve will shape the next decade of your business.
If you’re unsure how to define your niche – or how to market to it – reach out to a professional. This isn’t just about a new logo and established website – you’re creating a whole new brand. In a world full of advisors, be the one who’s known for something.
