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If you want to improve your business, clearly the focus has to be on doing something different. Whatever you’re doing right now is perfect if you want to stay as you are, but it’s unlikely to get you where you want to go.
If you’re up for that journey then the place to start is by taking a closer look at your existing client base. Your existing client data can tell you a lot about who you really serve and I emphasise the word “really” because often the owners and advisers in a firm believe they serve a wide range of client types.
While that might appear to be true, if you’re looking to identify the clients that are the future of your business, you need to be digging a little bit deeper.
Typically, the top 5 or 10 clients by value, the ones generating the most ongoing revenue, show you what your ideal clients look like.
One adviser I work with, Jonathan Gibson at Wells Gibson, uses the expression, “clients I’d like to clone”. He’s referring to a range of characteristics about these clients that make them ideal; in addition to the fees they pay.
Going Niche Is Good
Niching your business has always been important and in the next decade, I believe it’s going to be even more important.
Serving the at-retirement market is not a niche. All advisers serve the at-or in-retirement market.
So how do you make your business stand out in a very crowded and generic marketplace?
It’s not by saying “we’re different” on your website. It’s by becoming known as the go-to expert for a narrow and focused group of target clients.
“A niche market is a segment of a larger market that can be defined by its own unique needs, preferences, or identity that makes it different from the market at large.” ~ Shopify Blog
And the global pandemic has just made the need to niche your brand even more important. With most advisers mastering Zoom and most clients getting comfortable with Zoom meetings, the world has changed forever.
Instead of searching for clients in your niche who live within about 20 miles of your office, you can now secure clients across the country. That changes everything.
By building a brand that demonstrates specific and niche expertise for a target group of clients, you create the opportunity to be recognised and sought out by more and more clients in that space.
Let’s get real, clients all over the UK are not going to seek you out or want to work with you if you’re just another adviser doing retirement planning. And I don’t care how beautiful your website is either, it’s not going to make a material difference if you don’t come across as a narrowly focused specialist.
However, if you’re known as one of the top financial planning firms serving xyz target group, prospective clients will seek you out.
Clients are not looking for a generalist who says they can do everything. Generalists are scary.
If you got diagnosed with cancer you wouldn’t go and see just any doctor. In fact, you might not go and see just any old Oncologist. If you’ve got the wherewithal to do so you’re probably seeking one of the top people in the field.
Client Case Study
Amyr Rocha-Lima and Simon Ainley at Holland Hahn and Wills were telling me about a study trip to the US where they visited a firm in Washington DC with a very specific niche market; heterosexual couples where the woman was the power earner.
This particular firm had written white papers on their niche and had been picked up by all sorts of media because what they did was different and stood out. As a result, the firm had grown very quickly to having hundreds of millions of assets under management.
What percentage of their clients actually fell into their specific niche, that is couples where the woman was the power earner?
Only 15%.
Amyr and Simon were gobsmacked. But this is the takeaway for all advisers.
By standing out from the crowd and having a unique marketing voice, they were able to get on the radar with more than just their niche. Clearly, lots of other clients liked the cut of their jib when they went to check them out.
They would never have achieved their spectacular levels of growth by saying “we work with the at-retirement market” or “we work with anyone with money who’s nice and will pay our fees.”
How To Choose Your Niche
So how might you choose a niche for yourself?
There’s no need to re-invent the wheel, you’ve already got a niche or two, you just have to identify them. All the information you need to do that is sitting in your existing client data.
By taking a closer look at your top 5 or 10 clients and identifying the types of clients you love to serve, you are effectively identifying a niche or two that you can build your future business around.
It doesn’t mean you have to sack any good quality clients you already have.
However, it does mean that you’ll need to start narrowing your marketing and positioning to tell prospective clients who you work best with.
It means owning who you serve and being loud and proud about it and that’s a shift for 99% of financial planning firms.
If you want standard rates of growth, then do what everyone else is doing.
If you want unusually high rates of growth, then simply build on the rapport, knowledge and experience you already have of certain client types and niche your business even further.
Related: What Do Great Financial Advisors Do?