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Practice Management > Building Your Business

Enrich Through Your Niche

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At a recent coaching event an advisor from a Western state looked me in the eye and smiled as he introduced himself. “I want to thank you,” he said, “because I’m having the time of my life. The niche works.”

I immediately knew what he meant. Among the most valuable pieces of practical advice that CEG Worldwide offers advisors is to specialize in serving a wealthy market niche. Unfortunately, many advisors fail to establish such a niche for a variety of reasons, including the following:

o Not really understanding the nature and true value of a niche practice

o Not knowing how to effectively identify, evaluate and settle on a niche

o An inability — or unwillingness — to make the necessary leap of faith

o Not knowing how to say “no” and let go of inappropriate (i.e., non-niche) clients

Other than the last bullet point (which I’ll cover in my next column), this article will review all of the information you need to break through these barriers.

As for this particular advisor? Our advice enabled him to rapidly redefine his entire firm around serving wealthy outdoorsmen who are passionate about fishing and hunting. Through his personal participation in and enthusiasm for these sports, he readily identified high-net-worth prospects and turned them into clients. Both professionally and personally, his life is flourishing like never before.

The True Value of a Niche Practice

Most advisors do not serve a specific niche market. Instead, over time they tend to collect a variety of clients with little in common. Yes, advisors might have two or three corporate executives, doctors, or widows, but overall there is no specific need or challenge facing these clients, and therefore there is no unique value proposition for the advisor. What about advisors with declared minimums, who claim they are serving the niche of those wealthy enough to meet their requirements? Well, having enough wealth to meet a minimum doesn’t say anything about who the clients are, their needs or how to best serve them.

You really can’t be an expert in the needs of the wealthy generally. It’s just too big, broad and diverse a segment of high-net-worth humanity to capably handle. Instead, by focusing on the unique needs of those in a specific niche, you can build extraordinary expertise and add tremendous value through your focused services.

The driving force behind establishing a niche practice, then, is that it enables you to become well known and positioned as an expert who offers world-class service and solutions for those in the niche. Having established yourself as expertly serving those in your niche, “pull marketing” becomes easy. Clients reach their own conclusions as to the profound value you add to their lives, and therefore bring you more of their business and make referrals to new clients similar to themselves.

Finding Your Niche: The Abundant, Enjoyable, Value-Add

How, then, do you find a niche — the right niche for you — to serve? Where is your value-add so precisely on-point that you can relatively easily build (and enjoy!) the wealth management business of your dreams? Where and with whom do you best fit in and naturally shine most brightly? Use this four-step method to find your natural niche:

1. Identify several concentrations of wealth in your geographic area.

2. Identify a few potential niche markets where you can add value and are likely to enjoy working with clients.

3. Interview centers of influence (COI) — movers and shakers in the niche — to identify significant potential opportunities.

4. Analyze your opportunities, choose a single primary niche, and make it so!

The First Two Steps: Where, What, and Why

The first of these steps is the easiest: identify several concentrations of wealth in your geographic area. There are concentrations of wealth everywhere, so begin by opening your eyes, ears, and mind to what’s around you. (If you live in the middle of Iowa, your inquiry may need to embrace a larger geographic area than if you live in Manhattan.) If you live in Charlotte, N.C., consider executives from banking and related industries; if you live in Ann Arbor, Mich., consider college professors, start-up scientists or university administrators; if you live in Ft. Lauderdale, Fla., consider retirees, widows and yacht owners.

Having laid out some broad possibilities, identify one or more affluent niches where you can add substantial value and where you’d likely enjoy working with those in the niche. Far too many advisors tell us they simply don’t enjoy their work; by identifying people whose interests you share, the odds that you’ll be energized by work (and even have fun at it) increase dramatically. It may be useful to construct a simple table like the following one, to see if those in the potential niches you’ve identified are likely to share your interests:

The Next Two Steps: Interview COIs

The next step is to speak with centers of influence in the niche or niches you are considering. COI are highly visible people either in, or professionally related to, the niche. Look for trade groups, support groups, professional organizations, and simply those who are in the niche and stand out in terms of success and visibility. By interviewing COI you can determine whether you are correct in your assumptions and estimations of the viability of the niche. In short, COI interviews enable you to determine if your initial understanding of the niche matches up to reality.

The final step is to evaluate all of the information you’ve come up with and then make a determination as to the best niche for you to commit to (one that is financially abundant, and has people you’ll enjoy working with who will benefit greatly from your expertise), and whether you are willing to make that commitment. That is, even if you have the right niche targeted, are you willing to consistently do what it takes to transform your practice into the business you’ve always wanted?

Making It So!

Advisors fail to establish successful niche businesses for a variety of reasons. In some cases, the fatal flaw is an unwillingness to do the necessary work, or to make the necessary leap of faith. For example, many advisors are reluctant to pick up the phone and arrange the COI interviews needed to effectively evaluate potential niches. But showing reluctance or being ill at ease about COI interviews is a guaranteed path to failure; if you don’t ask, you won’t get.

Yes, it may take you a little out of your comfort zone to call up the president of the local university or chamber of commerce, but in our experience the vast majority of those who are approached as being knowledgeable and important in a niche are delighted to share their knowledge, wisdom and perspectives over lunch. (See Keith Ferazzi’s Never Eat Alone [2005] for some networking pointers.)

While a few advisors “fall into” superb niches by accident, it generally takes a lot of hard work to “make it so!” One way to proceed is to effectively split your business into two companies, “Old Co.” and “New Co.,” and make sure that you set aside and work on your “New Co.” niche business a certain number of hours every week. If you don’t, ordinary life and business concerns will inevitably absorb all of your time.

If it turns out that your chosen niche wasn’t robust enough to build the business of your dreams, then you can add a second niche or start over. As Mike Ditka once said, “Success isn’t permanent, and failure isn’t fatal.” So give it a go, make it so, and even if it doesn’t work out, you’ll likely have better luck niche time.


Patricia Abram is a senior managing principal with CEG Worldwide, a research, training and consulting firm.


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