You hear it often: one of the best ways for independent advisors to maintain their competitive edge is to serve a niche clientele. William and Paula Harris can attest that this axiom is dead on. Here’s their story of how serving a niche of affluent women is really paying off.
William started WH Cornerstone Investments in the coastal town of Duxbury, Massachusetts–40 miles south of Boston–in 1996, and built up his clientele while Paula worked in the corporate world as a human resources manager. Three years ago, Paula joined her husband and became the planning firm’s marketing guru and self-proclaimed “people person.” William, a CFP, says he is the firm’s “spreadsheet guy and number cruncher.”
One of their first clients was an affluent businesswoman, and soon after signing on, she started referring her women friends to Cornerstone. The referrals snowballed, and today 80% of the Harrises’ clients are affluent women. Two years ago, the Harrises decided that serving women was just too broad a niche, so they rummaged through their client database and discovered a definite pattern–the majority of their clients are women executives who work in nearby Boston for financial services firms, like hedge fund and mutual fund firms, and big banks like Deutsche Bank and JP Morgan Chase. “It was an overwhelming theme that we saw,” William says. “We said, ‘Wow, there’s a niche, let’s go after it!’”
The Harrises serve a “highly educated and well-informed clientele” of affluent women, says William, who generally are over age 35, earn from $100,000 to $400,000 per year, and have from $250,000 to $1 million in investable assets–which includes their IRAs and home values, which start at $500,000. Dis-covering that their clients worked in financial services was a real “Aha!” moment, Paula says, because both “Bill and I have worked in financial services, so it’s a comfortable spot for us.”
What Your Peers Are Reading
It’s not always so easy for independent advisors that are looking to serve a niche to actually find one. Says William: “I think a niche evolves.” Some advisors may zero in on a certain niche that they know nothing about, for instance, serving telephone workers, he says. But once the advisor starts serving them, he realizes he “really doesn’t want to work with these people.” The Harrises really had to dig deeper into their already established client base of women that they’d been serving for 10 years to narrow their niche. They’re still parsing out that niche today, William says, by refraining from serving certain businesswomen. “You have to say no sometimes to some clients. We’re networking a lot, and we get a lot of single women who start up their own business,” he says. “We’re really going after corporate types, and we’ll also go after [owners of] a well-established business.”
Follow Your Passions
Paula suggests that advisors who are searching for a niche start with something they’re passionate about, like wine, fishing, and so on. Then the advisor can start prospecting for clients at various events that cater to these hobbies. “If you have a passion, it makes it much easier to connect with people,” Paula says. She’s found it easy to create a rapport with women clients because she understands how they want to be treated. During her career as a director of human resources for financial services firms, Paula says she noticed that women weren’t always given the same access to information as their male co-workers. “When I joined Bill in practice three years ago, I thought it was important that we continue to reach out to women; they are very bright, and they just need someone to educate them a little, not talk down to them, not patronize them,” she says. “We’ve had tremendous relationships with our women clients because we treat them that way.” Cornerstone now manages $20 million for about 75 clients.
It’s a good thing that Paula came aboard, because “women want to deal with women,” William says. “If Paula wasn’t here, I’d have a tougher time,” he says, because the majority of women who come to Cornerstone would prefer “to have a relationship with another woman.” For instance, here’s a comment that William got from a prospective client recently: “‘I have enough testosterone at work. I don’t need to deal with you!” Says Paula: “We’re still waiting to hear if she’s going to come with us.”
While William and Paula get most of their referrals from existing clients and local life coaches, they also get a good number of clients through networking, particularly at the Downtown Women’s Club in Boston. Being able to articulate a niche to prospective clients goes a long way in winning them over. Most advisors tick off a laundry list of services that they can help clients with, and the “consumers’ eyes glaze over,” Paula says. “When we tell people our niche, immediately their mind goes to the five people they know in that niche, and it usually expands beyond [that group], and they say, ‘Okay, I’m going to tell this person about you.’”