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Beyond Niche Marketing: Advisory Firms for All Life Stages

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By now, some 45 years after the creation of financial planning and the independent advisory industry, virtually all advisory firm owners are well aware of the theory of “niche marketing.” The idea is to pick a specific niche or niches of clients to serve, such as doctors or corporate executives, vineyard owners, owners of dry cleaners, etc. — the more specific the niche, the better. Then, learn as much as you can about the financial needs of folks in that niche and focus your services, marketing and networking efforts on that group. The benefits of this approach include more targeted marketing, easier networking, higher referral rates and more efficient businesses due to a smaller number of services offered.

However, like many other widely held theories about managing advisory businesses, my experience working with independent firms has led me to a different conclusion: Marketing niches aren’t all they’re cracked up to be. (That list would include: micro-managing employees, front-loading succession buyouts, recruiting “blue chip” young advisors, skimping on technology, and ramping up during boom markets.) In fact, niches can be unnecessarily limiting to advisory firm growth.

Yes, I know that a number of well-known advisors have built very successful firms by focusing on various niches. What most advisors don’t realize is that those firms are notable due to their rarity, rather than representing widespread successes.

The reason behind the relatively small number of successful niche firms is that they are usually more a product of accident than design. Most often, a firm owner will notice that a significant portion of his client base falls into a particular group and begins to focus more attention on that niche. Or an executive will retire from a large corporation, become a CFP (usually to better manage her own finances) and using her inside knowledge of the former employer’s pension, benefits and stock plans, will start working with former colleagues.

These examples of letting the niche find the advisor are very different from the usual advice to pick a niche with which an advisor has no previous connection. In my experience, that’s an uphill battle, despite the widespread acceptance of this wisdom. Here’s why:

  1. It’s not easy. For starters, breaking into a new group of just about any kind is much harder than stumbling into one. When you’re targeting a group of affluent, successful people, breaking in is that much harder. What’s more, targeting a group usually means you don’t have the same connection that the actual members of that group have with each other: You’re not a doctor, a corporate executive, a college professor, etc. That means you’re an outsider from the start.

  2. There’s increased competition. In the advisory business, niche marketing has been around for at least 20 years. Most groups that make good target clients for financial advisors are well-known, so your chances of picking a group that hasn’t been already targeted by one or more financial advisors is pretty darn slim.

  3. It limits your business. I can’t tell you how many times I’ve seen firm owners busily focusing on breaking into their target niche so hard that they overlook some great groups of prospective clients that they’re already in: social groups, sports activities, hobbies, spouses, co-workers, etc. Opportunities for good financial advisors are all around them, all the time. Niche marketing can narrow one’s focus.

  4. You’ll turn away good clients. Advisors who have built their firms around serving a specific niche have a tendency to turn away clients who don’t fit into their target group. Sometimes it’s because they need additional services, but usually it’s out of concern that out-of-niche clients will water down their niche marketing efforts. This is a mistake for a number of reasons. Obviously, it slows growth, but it also eliminates exposure to new niche groups that could be great sources of clients, essentially preventing new niche markets from finding you.

  5. Focused services are largely an illusion. Yes, some groups may need specialized services, such as trusts or small business benefits, but the vast majority of potential client needs are basically all the same. (I hate to break it to you, but comprehensive financial planning and retail portfolio management aren’t exactly rocket science.) If a new client needs some specialized service, there are plenty of outside experts with whom you can coordinate, increasing your stature through your expert contacts. When a growing number of clients need the same outside service, you can bring it in house. It’s far better to make that decision when you already have the business to support the new service than bet the farm that if you build it, they will come.

Instead of niche marketing, we work with our clients to package their services in a way that works for — and appeals to — virtually everyone. No matter what niche group a prospective client fits into, they will always fall into one of three stages in their financial life cycle.


Sometimes known as the accumulation phase, most clients and prospective clients fall into the growth stage of their lives, when their primary goal is to provide for their family, enjoy a comfortable life, and invest sufficient savings to support themselves and possibly other family members in their later years. Typically, clients in the growth stage don’t have the assets to generate large advisory fees, so advisors who focus primarily on clients in this stage tend to be younger themselves.

With the help of good financial advisors, these client assets will grow substantially over time, enabling advisors to both grow their business and to increase their income along with their client portfolios. To work with growth clients, advisors need to be strong in comprehensive financial planning, particularly projecting future client needs, risk management and budgeting, to strike the right balance between current and future financial needs.

To attract growth clients, especially today, it helps if an advisor is in their own growth stage as well: typically, between the ages of 30 and 45 or 50. At this stage in life, most contact is made socially, with introductions or invitations to join active groups generating more prospective client leads than actual referrals.

Another good source of growth clients are the children of existing clients who are in their transition or maturity stages. Many successful advisory firms offer programs to educate their clients’ children about personal finance and investing, and to get an early start on their growth stage.


This is the stage when most clients turn to a financial advisor for help. They are old enough to start seriously considering their retirement. These are typically the target clients of most independent financial advisors. They are currently affluent and serious about taking action to improve their futures.

Clients at this stage tend to discuss financial matters with their friends more than those in the growth stage, and are much better sources for referrals. Socializing is still a good way to meet new clients, as are formal programs and informational publications aimed at helping prospects work through the issues they face in the transition stage. Again, it helps to have at least an advisor or two on staff who are at this stage themselves to better relate to these clients.


This is the stage when clients are in retirement (or increasingly, semi-retirement), typically known these days as the portfolio depletion phase. While declining client portfolios can be a problem for some firms, we find that they don’t have to be. For one thing, some clients are interested in continuing to grow their portfolios for future generations. However, even clients who are depleting their investments can make great clients: after all, they typically start this stage as the largest client portfolios.

The key to success for firms with a substantial portion of clients in this phase is first to keep their existing clients, and then to create a steady stream of new mature clients from their own client rosters and those of other advisors. Of course, clients in this stage relate best to advisors at the same stage, and they tend to be excellent referral sources. Many of these clients still socialize actively, but formal informational programs and targeted publications also can be very successful at attracting new maturity-stage clients.

Typically, financial advisors have focused on growth-stage clients when they are starting out themselves, and progress through the stages with their clients. Many firms are very successful picking one of these stages to focus on. We recommend that firms focus on all three stages — hiring advisors at each stage — by selling the whole life cycle: “We work with clients for life.” It’s a niche that all prospective clients will belong to.

— Read Marketing: Use What Has Worked and What Is Working on ThinkAdvisor.


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