The Best Ways to Find and Build Your Client Niche

Growing an advisory firm through a niche focus — on a specific profession, age group or gender — isn’t a new business strategy. But increasingly, advisors have honed target groups using their own backgrounds and turned to online-based resources to both build and grow these practices.

Many advisors have focused on doctors, lawyers and engineers as their client niche, for instance, because these professionals usually are high-income earners. Others leverage contacts from prior careers or training.

Computer science grad and former tech pro Mike Zung, CFP, of Java Wealth Planning in Kansas City, Missouri, told Investment Advisor that “I really enjoyed working in tech, loved the people, and the pay and benefits were great. But I wanted to focus my time and energy on work that I could look back and feel that I made a tangible, positive impact on the world.”

Thus, when he decided to open an advisory firm, he targeted what he knew best: nerds.

Nick Giacoumakis, who founded New England Investment & Retirement of North Andover, Massachusetts, and Naples, Florida, grew up and worked in the construction business. As a result, he’s focused his advisory group on clients such as general contractors, subcontractors and their employees.

The advisor says his industry knowledge proved to be invaluable over the years and especially during the pandemic. Giacoumakis’ firm helped some clients cut through red tape to sign up for the Paycheck Protection Program and supported others looking for bridge loans in the face of business hiccups as contract deadlines loomed.

For his part, Zung has clients whose compensation programs include stock options in which “we have to dive pretty deep into their tax situation and job satisfaction along with the usual goals planning,” he says. “And there’s a lot of conversations around weighing the risk and reward that comes with having so much comp tied to your company.”

Having worked in the tech business, he’s comfortable discussing salary and compensation, as well as new job offers, with clients. “And since changing jobs is so common” in tech, Zung explains, “new clients will come to me with old 401(k)s scattered all over the place!”

Building on What You Know

Even niche advisors who don’t have specialized professional backgrounds or lengthy careers in other fields find ways to leverage issues and challenges they’ve encountered to both help clients and grow their practices.

Advisor Chris Chen, for instance, used the research he gained from serving a client 10 years ago to grow his practice, which focuses on retirement and financial planning for post-divorce women over 50. The niche creates operational and marketing efficiencies, as well as strong relations with investors, because “I understand what [clients] are talking about.”

The head of Insight Financial Strategists in Newton, Massachusetts, adds, “You start getting experiences and problems that repeat themselves,” the CFP explained.

This means “you [gain] technical expertise on the issues” in ways that support the growth of the practice, said Chen: “For example, in a divorce situation, you can [help clients] understand how to divide retirement accounts and … follow up when appropriate.”

A more generalist-type advisor might not catch all the nuances of this niche, he points out. Indeed, his firm focuses on women over 50 because this demographic group has different issues than younger women. For example, many may not have had a career to support themselves post divorce.

“They worry, ‘Am I going to be a bag lady under a bridge?’” Chen explained. “There’s a different intensity than those who are younger, usually haven’t had time to accumulate assets, may have their own careers and don’t have children.”

A Youthful Focus

But younger professionals also have common financial issues, and many advisors target this age group, too. For example, Amy Irvine, CEO and founder of Rooted Planning Group of Corning, New York, focuses on Gen X female attorneys.

It was “happenstance” that she zeroed in on this fairly narrow niche, Irvine says. Earlier, she’d worked with attorneys under a great deal of stress and then decided to spin off to provide financial planning to mid-career lawyers.

A Gen Xer herself, who’s been in the business 26 years, Irvine felt comfortable with the focus on women and attorneys. “I really enjoy working with them. They’re organized, very knowledgeable and busy,” so they need to outsource their financial planning, the CFP explained.

“Their personalities also can be similar, in that they are very detailed and communicate [well],” Irvine added. In fact, that common parlance even simplifies the description of how she gets paid, since they understand billable hours and retainers. “Attorneys get it. We don’t have to explain,” she said.

Katie Brewer, CFP and owner of Your Richest Life in Dallas, also gravitates toward Gen X and Gen Y high income earners, usually physicians and business owners. When Brewer started in the business, the company she was with largely worked virtually, so she kept that arrangement — which is attractive to her younger clientele.

“A lot of clients appreciate it,” she said. “For example, a doctor with a day off can meet with me over Zoom and include his wife while at home.” Plus, the pandemic didn’t alter her business plan as her clients already were acclimated to virtual meetings.

Marketing Advantages

Niche advisors also believe it’s easier and very effective to do marketing when focusing on a specific group. To reach divorced women over 50, Chen markets to centers of influence, who are mediators and lawyers handling divorces.

“I can market in a systematic way,” he said, and thus largely grow his business through referrals. Chen also charges by the hour.

Brewer, who’s been in the business for 16 years, markets by generating content on topics that her Gen X or Gen Y investors face — such as juggling multiple financial goals, selecting the right asset allocations in employee retirement savings plans or flipping a house.

It’s all done via her website and social media. She gives her clients the option of an assets under management or retainer/fee payment arrangement.

For her part, Irvine also relies on referrals, as well as works with legal organizations like Ms. JD, a nonprofit organization that promotes women in the legal profession. The group hosts online programs for networking among women lawyers for which Irvine’s done financial planning presentations.

In addition, various bar associations now include financial issues in their wellness programs, and these forums give her the opportunity to share her knowledge and get more referrals.

What Makes a Successful Niche

During a virtual seminar this summer, Koltin Consulting Group CEO Allan Koltin, CPA, shared an overview of what professionals like CPAs and financial advisors need to do to adopt or add a niche business to their practice.

There are common fundamental questions for any size firm to ask when they want to focus on or add a niche practice, according to Koltin, who spoke at the American Institute of Certified Public Accountants’ Personal Finance Planning event in July.

Some of these questions are:

• Why would this be a good service for clients?

• Why would the firm get into the area?

• How will they get there?

• Do they have the passion to become the “famous” person in the niche?

Also, Koltin is often asked about the most profitable niches. His answer: “What are you passionate about? Because if you’re just going through the motions, you probably won’t have much success,” he explained.

Many firms today partner with other professionals, such as attorneys, to fulfill the needs of a niche, and they utilize social media platforms to “broadcast thought leadership,” speak at conferences, join roundtable discussions and make similar efforts to get the word out and become a niche expert.

While such activities can prove beneficial to firms moving into a niche, advisors also have to be very systematic and strategic in their partnerships — and do their homework, Koltin says. He points to a firm in Madison, Wisconsin, that wanted to grow a niche of clients with family businesses.

The group decided to align with a local law firm and the University of Wisconsin and then held educational events focused on financial issues affecting family businesses.

After a few years, the firm had 200 clients in the area, and the partner who headed up the niche became a family business expert. “It was a simple idea that focused on an opportunity in an underserved area,” Koltin said.

Ginger Szala is executive managing editor of Investment Advisor. She can be reached at [email protected].

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