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.
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.