By Joni Youngwirth
Ask any marketing professional: How do you sponsor exceptional, powerful, effective marketing campaigns that deliver results? A quick response is to start with a viable niche. With a defined, specific niche you can:
• Identify particular pain points of the individuals in that niche, then
• Position yourself as having the expertise and experience to address those particular pain points
Without a niche, marketing materials are like pablum: bland and unappetizing. They talk to everyone in general and no one in particular. Yet advisors are often reluctant to identify a niche for fear of losing out on potential business. The reality is that the opposite is true. By specifying exactly whom you want to attract, you increase the probability of cultivating those prospects for your firm.
Being Generic Won’t Cut It
When asked, many advisors will state that their niche is retirees and pre-retirees. Let’s make the math simple and say those are the baby boomers. According to census data, approximately 76 million boomers were born between 1946 and 1964. That means roughly 10,000 of them turn 65 every day. This has been going on for four years already and will continue for the next fifteen. When we drill down, however, not all boomers are viable candidates to become your clients. In a recent white paper, the Insured Retirement Institute reports that 40 percent of boomers have no or insignificant retirement savings and may be more interested in debt consolidation than financial and estate planning.
In addition, only 48 percent of boomers even seek financial guidance from an advisor, per an FPA study sponsored by Wells Fargo. Although the boomer group as a whole is a rich opportunity, with roughly 300,000 financial advisors in the industry, it’s safe to say that those millions of boomers will not be equally distributed among advisors. But advisors who address a particular niche within this market segment have a greater chance of attracting them.
Going back to the generic niche of retirees and pre-retirees, the pain points of individuals in that group go beyond commoditized investment management. Their concerns vary dramatically and can include one or more of the following:
• Tax harvesting
• Estate planning for the ultra-wealthy
• Budget management to ensure that a nest egg lasts
• Evaluation and selection of charitable endeavors for maximizing legacy planning
• Education of the next generations in financial savvy and responsibility
• Preparation for estate taxes
• Management of end-of-life issues
Identify Their Hot Buttons
I used to read a story to my children, titled Wishing Doesn’t Make Things Happen. Wishing you had more retirees and pre-retirees doesn’t make it happen. If that is the group you passionately want to focus on, you’ll need to determine the hot buttons of a specific segment of the group to attract more of them. For example:
• Our niche is individuals at least 50 years old, with plans for a permanent residence in Montana, who need to budget to ensure that their nest egg lasts as long as they do.
• Our niche is client couples at least 50 years old, with a primary residence in New Hampshire, who are committed to ensuring that their estate maximizes wealth transitioned to their children.
• Our niche is 60-year-old clients, retired and with a permanent residence in Florida, whose goal is to maximize contributions to charitable interests.
• Our niche is clients whose permanent residence is in Michigan, who were born between 1946 and 1964, and whose focus is to ensure that their wealth lasts more than three generations.
• Our clients live in California, are within five years of retirement, and wish to plan holistically for retirement, including the establishment of a permanent residence that will minimize estate taxes.
Each of the above groups has different pain points, requiring their advisor to have different types of expertise. It quickly becomes apparent that the website you develop, the e-mails you send to prospects, and the events you hold for clients and their friends will be very different in all these situations. Furthermore, the more the clients of one firm have in common, the more the firm as a whole can concentrate on specific activities to address those clients. The result is a more efficient organization.
Rather than trying to be everything to everyone, revisit the type of client you are most passionate about working with, as well as the type of problems you are particularly well suited to helping clients solve in the future. Define it, be smart about the clients’ needs, and watch your firm grow.
Joni Youngwirth is managing principal, practice management, at Commonwealth Financial Network®, member FINRA/SIPC, an independent broker/dealer–RIA.