In the first part of our post, we discussed the threat of increasing competition from other financial planners and the increasing lack of differentiation between advisors with different business models (like the wirehouses) but who have similar qualifications. Now we’ll discuss what to do about it.
So what’s the solution in a world where financial planners and their services are increasingly similar to each other? It’s time for more advisors to really establish a true Unique Value Proposition.
Yes, the UVP marketing buzzword has been around for a long time, but few advisors seem to have truly internalized its point: if you want to grow your business, you really have to demonstrate the unique value you bring to the table. Just being a financial advisor with credentials and years of experience developing customized, individual financial plans for the needs of their clients just doesn’t cut it. That’s not an end point for differentiation anymore; now it’s just table stakes, or the minimum to get a foot in the client’s door.
So what is truly unique in the world of financial planning? Since the service of financial planning itself is defined by a recognized process and practice standards, it’s difficult to be unique with respect to the delivery of financial planning (though ultimately providing a genuinely unique client experience could be a differentiator). Instead, the key to differentiating is the kind of expertise you have, or the kind of clientele you work with. In other words, it’s all about having a niche.
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The reason why having a niche matters more than ever in this environment is that it creates an opportunity to possess something at which you are unique and the undisputed “best” to serve your target group of clients. Realistically, you’re not going to be “the best” at financial planning; there’s too much competition. While you might be “the best” in your local geographic area, the reality is that geography as a niche will be less and less relevant in the future, as the capabilities grow for online web-based (and especially, video-based) service models and digital search makes it easier for prospective clients to find the best advisors.
If you want to be the best at planning for new parent finances, financially wise women or some other specific, narrow niche, you really can deliver a unique value and service that has no competition by choosing to target a clientele that no one else targets.
Fortunately, in the digital age it will be increasingly feasible to build a narrow niche with a broad national clientele, relying on the power of search engines to help those clients find you, the one best expert to help solve their problems.
Do Niches Make Your Business Smaller or Bigger?