Working With Widows

Searching for the perfect niche, an independent advisor in southern Florida thinks she's hit the jackpot widows. But how best to go about cultivating them as clients? To offer her advice, we asked for comments from our panel of experts: Hellen Davis, president of Indaba Training Specialists, a management consulting and training firm in Treasure Island, Fla; Philip Palaveev, president of Fusion Financial,

Searching for the perfect niche, an independent advisor in southern Florida thinks she's hit the jackpot — widows. But how best to go about cultivating them as clients?

To offer her advice, we asked for comments from our panel of experts: Hellen Davis, president of Indaba Training Specialists, a management consulting and training firm in Treasure Island, Fla; Philip Palaveev, president of Fusion Financial, an Elmsford, N.Y.-based network of advisors; and Chip Roame, managing principal of Tiburon Strategic Advisors, a Tiburon, Calif.-based market research and strategy consulting firm for financial institutions and investment managers.


After working on and off as a financial advisor for the past 20 years, Jane Eddy has decided she wants to expand her business — and she thinks she knows how. Based in Ormond Beach, Fla., where the elderly population is high, she figures there are a lot of wealthy widows in desperate need of sound financial help. Trouble is, Eddy's not sure how to go about targeting this potentially lucrative niche without becoming — to use her words — a “hearse chaser.”

After graduating from the University of South Florida in 1981, Eddy spent the first six years out of school working for a variety of local organizations — as a coordinator of social events in the president's office at Embry Riddle Aeronautical University and in marketing at a natural gas company and a hospital. Then, a friend convinced Eddy to try selling life insurance. She got her license and found a job with a small agency connected to what was then Equitable.

Eight years later, however, Eddy and her husband decided to move with their two small children to a tiny town in northern Florida, where he bought a McDonalds franchise. It wasn't a particularly affluent area and Eddy put her practice on hold while she raised her kids. Seven years later, Eddy's husband was able to buy two McDonalds franchises in the Daytona Beach area, and the family moved back. Eddy got a Series 7 and signed on with a financial planning firm, primarily selling life insurance, mutual funds and variable annuities. More recently, she switched to AIG, where she doesn't feel pressured to sell proprietary products.

Then, about a year ago, Eddy got to thinking it was time to step on the accelerator and boost her business, which has $8 million in assets. (Most of her revenue comes from variable annuities, according to Eddy). The likeliest way to do that, she figured, was to develop a niche. And, for a variety of reasons, widows seemed to fit the bill. Not only were there a lot of them in southern Florida, but many of her 200 clients were women who had recently lost their husbands. And, she realized she found the process of helping them to be particularly satisfying. “They walk in and they're completely lost,” she says.

But there's a hitch. Eddy doesn't know how to target the group without seeming heartless. For now, she mails a newsletter to about 250 women in the area every few months, but she finds the process difficult thanks to compliance requirements. She also speaks to local women's groups. Making the effort harder, working with these women is inordinately time-consuming. One client, for example, was the widow of a successful doctor who didn't leave a will. Sorting out their finances took about nine months.

Eddy's growth plans also include looking for larger office space, perhaps buying a building. She has been running her firm as a solo practitioner, and interviewing candidates for a part-time assistant position. Ultimately, she wants to take on a partner — someone with experience who also would like to expand his or her practice. But first she has to win over the widows.


Hellen Davis

I had a client who was in that marketplace for six years. He ended up handing the business over to an elderly associate, who didn't need the money but was just doing it from the goodness of her heart. It was just too time consuming. The typical client left most of the finances to her husband. She might not even have known how to balance a checkbook. So, you have to spend a lot of time on education — and locating the necessary documents.

I think to target this niche she has to really compartmentalize her business. She'll need a team to handle issues she shouldn't have to address. This would include a grief counselor — best is a licensed medical professional — and a life coach who could help the client move on to the next stage of her life. These people would also refer business to one another. If she doesn't do that, for example, she's going to be helping the woman through the grief stages and she's not trained for it.

Without a team, she could also be perceived as having a conflict of interest — trying to sell financial products to people who are at their most vulnerable. It could come back to bite her. Say the market goes down and her client loses a lot of money. She could be sued.

On the financial side, she also needs somebody whose job is to gather paperwork. She should not be in the position of doing that on her own. She can pay the person $15 to $18 an hour and charge the client for a review, at a minimum of four hours. Then she can hire an assistant to mop up all the paperwork — and make sure all the tax-related material is there. Widows often don't know how to pay their taxes. She'd look for a stay-at-home mother who came out of the financial industry or a bookkeeper.

The next person she needs is a really good realtor. The client will probably need to downsize. She should look for someone trusted in the marketplace who deals with widows, so her clients can find a good community without getting ripped off.

For marketing, she's taking the right approach. However, I think she should talk to women's groups about something else. Most people are in denial. It's better to discuss, for example, what you would do in the next hurricane: Do you know where all your financial paperwork is? Then she could advise the women to store their documents at her offices, where they would be scanned for a small fee. That solves two problems. It helps them get all the paperwork together — and she would have started building trust with these women.

One last word of advice: I'm sorry to say she might need to think about changing her broker/dealer. The problem is one of perception. Widows tend to be gun-shy financially.

Chip Roame

To reach any niche market, you need to find the places in which these people gather — for meetings, conferences and so on. And you have to try to speak at those gatherings. If not, you should be an exhibitor or, if that's not possible or appropriate, just attend. The next thing is to find the publications and newsletters they read and write an article in them, or, at least, advertise.

It sounds like she's on the right path. But she can do more. For example, producing a newsletter is fine. But sending out a mailing on your own costs a lot of time and money. Why not tap into newsletters these widows already read? She's near Daytona Beach. There must be a ton of condo complexes. She can find the person who writes the newsletter for each condo and offer to write a column for free or speak at their members' meeting.

She should also go to her current clients and discuss what they think their needs are. Find out what she's done that they've found helpful. After that, she can collect that information and put it in a brochure and a PowerPoint presentation. The brochure she'd send to prospective clients; the presentation she'd share with clients or people who visit her in her office.

She can also look for referrals. I'll bet the widows she works with know other widows. Also, once she starts writing for those condo complex newsletters, she'll be able to get referrals from them. Or, if not, then from someone they know at another complex.

Philip Palaveev

I'm always glad to see an advisor looking to develop a niche, because it immediately gives them more marketing power and provides them with a more satisfying experience. As for how to market to her target client, one idea that comes to mind is to cultivate attorneys. Anyone who is recently widowed and is trying to sort out her affairs will probably seek the advice of a family practitioner or estate planning attorney. I would also hit the local chapter of the Financial Planning Association. A lot of people who suddenly find themselves with a need for a financial advisor go to the FPA.

But while targeting a niche is a good idea, I agree that this one is particularly time consuming. I think she'll need to think about her pricing model. If she spends a lot of time with each client, she should get compensated for it. Usually, an advisor who spends many hours with a client charges a retainer or project fee and doesn't just rely on assets under management.

She also has to address these other issues: hiring an assistant, her office, and teaming up with a partner. Bringing on an assistant is a matter of how much she has in revenues. If she makes less than $100,000, I don't think she can afford an assistant. More than $250,000, she can. But, I don't think hiring someone part time will work. It takes too much time to learn how the broker/dealer operates and so on. As for the question of space, buying a building is a business decision that has nothing to do with the practice. If you want to get into commercial real estate, that's why you do it. Finally, taking on a partner is generally a good idea. But the issue is finding somebody who's a good match in terms of philosophy, as well as experience. This won't happen overnight.

Fix My Business is a quarterly feature that seeks solutions to real-world advisory problems from a group of consultants and industry insiders. Submit your questions to [email protected].

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