Which financial advisor do you think is more successful in the example below?
- Karen welcomes all types of clients to her practice.
- John specializes in financial planning for attorneys.
While it may sound like Karen has a larger practice because she accepts a broad range of clients, John’s practice is more successful.
Narrow Your Focus
The most efficient way to build a practice which is scalable is to develop an expertise within a niche market. Typically, financial advisors start out as generalists, casting a wide net. But over time, they find they’re competing with too many other financial advisors. They get lost in the crowd.
The key to standing out is to identify an area of expertise. Focus your sights on a particular niche. It can be working on retirement plans – a segment of our business you really enjoy working in. Or the focus may be a natural, unintended niche already in your book, such as physicians or engineers who came through key contacts or referral sources in your personal network. Your niche may be more geared toward groups versus individuals such as providing financial planning and informational workshop services to nonprofit organizations. The possibilities are endless.
Focusing on a niche, allows you to commit your time for professional development and networking energy in a specific direction. You develop a high level of expertise and knowledge regarding your niche market, their needs, their challenges, and their goals. This makes you more attractive to that niche market and raises the barrier of entry for competitors. Specialists trump generalists. Just remember, you don’t become an expert doing a thousand things one time. You become an expert doing one thing a thousand times.
Find your area of specialization. If one isn’t obvious, do an analysis of your business. Look at your list of top clients. Determine what type of occupations or backgrounds represent the highest percentage of your best clients. That category should point you to the niche market that could be the basis for your specialization.
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