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Practice Management > Building Your Business

To Build a Thriving Niche Practice, Learn When to Say No

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What You Need to Know

  • The defining challenge of a niche practice is saying no to less-than-ideal clients.
  • An inquiry from a near-fit prospect can signal an opportunity to expand to a parallel niche — or a trap.
  • When adding a new focus area, you must be able to continue providing the same level of service you do now.

If you’ve built a niche practice or are working on one, you know that there are a few things you need to consider to be successful. Build specific services for the specific clients you want. Develop ways to communicate that value to your ideal audience. And equip your clients and other centers of influence to echo your value so they refer you to other like-minded and similarly situated people.

But what really defines a niche practice and will regularly present challenges to advisors is saying no to people who are not your ideal client, even if they represent substantial potential revenue.

Sometimes an inbound inquiry from a near-fit but lucrative potential client flags a transition point for your business — an opportunity to expand to a parallel niche. Other times, it represents a very real trap. When you expand into adjacent niches before really owning the initial niche you planned to develop, you dilute your value proposition and push yourself back toward the generalist practice. 

A Couple of Examples

Andrew Sigerson founded and runs Legacy Design Strategies, the largest boutique estate planning law firm in the country. They do estate planning only. Estate planning is a tough business because the revenue stream is irregularly recurring. A client may come in for initial planning work, and then the firm may not see them for five to 10 years until they’ve had significant changes in their lives or until an attorney is working with their heirs to settle the estate. Needless to say, it’s tempting when a high-value, recurring-revenue client comes in. 

I asked him what he does when a near-fit prospective client comes in unsolicited, either by a referral or by a personal connection through one of the many community organizations he’s involved with. His answer was simple: “We do very limited business work. Buy-sells, asset protection, or transitioning the business to the next generation, but no employment law, litigation, ERISA, ADA or contracts. If they need that sort of work rather than estate planning work, we refer it out.”

Andrew hit on a key point. To be excellent, you must actively choose to be excellent. That means limiting your role to where you can be the clear best choice. Andrew’s firm’s position is that they can deliver a higher level of service because they are focused on what they do. They’re not distracted or spread too thin by trying to be all things to all people. That messaging, coupled with how they deliver their services, has helped him create a highly valuable and lucrative business that grows organically. 

Will Andrew choose to take the business in another direction in the future? Maybe, but if or when he does, it will be a conscious decision to do so. My bet is that it will be another niche that parallels the work his firm already does, which means he will still have to tell potentially lucrative clients that his firm is not a fit for what they need. 

This doesn’t mean that there is never a good opportunity for niche financial planning firms to expand. The near-fit client can represent an opportunity to take on a parallel niche and significantly grow your business.

For instance, a business coach I’ve worked with — let’s call him John — began as a coach in a coaching system that was designed for small businesses with 10 to 50 employees. As some of these small businesses quickly grew to over a hundred employees, he realized that some of the tools he was using were built to serve smaller companies where each employee was directly connected to the leadership. John also realized that those tools did not work well for rank-and-file employees in a larger organization. As more clients reached those milestones, he had a choice to make: stick with his original tool set and refer these larger clients away, or supplement his tool set with new tools to begin to tackle an adjacent niche. 

Ultimately, John determined that he would raise his prices. Only the smaller businesses that were well-funded enough to become bigger businesses would be a good fit for his services. By charging more, he was able to develop new tools to successfully serve the larger business clients, and his smaller clients became considerably more profitable to his business. This proved an incredibly effective way to expand the firm’s services. 

When to Expand

Determining whether to expand into a parallel niche and finding the right opportunity to do so can be complicated, but there are a few clear indicators to look for.

  • Do you have the systems, the people, the messaging and the reputation to continue growing at a similar pace without actively marketing to new clients?
  • Can you continue to provide the same level of service you do now, even while adding a new focus area to your practice?  

If you can answer the question above with a quick and easy yes, you’ve done a great job at creating and owning your niche, and it might be the time to consider expanding into adjacent niches if that’s something you’re interested in. Otherwise, focus on building out the systems to enable you to answer yes, so your expansion into parallel niches will be successful.


Joe Elsasser developed his Social Security Timing software in 2010 because, as a practicing financial advisor, he couldn’t find a Social Security tool that would help his clients make the best decision about when to elect their benefits. Joe later founded Covisum, a financial tech company focused on creating a shared vision throughout the financial planning process.

In 2016, Covisum introduced Tax Clarity, which helps financial advisors show their clients the hidden effective marginal income tax rates that can significantly affect cash flow in retirement. In early 2017, Covisum acquired SmartRisk, software that allows advisors to model “what-if” scenarios with account positions and align a client’s risk tolerance with their portfolio risk. In January 2019, Covisum launched Income InSight, an income planning tool.

Covisum powers some of the nation’s largest financial planning institutions and serves more than 20,000 financial advisors.