Kitces & Carl Ep 79: Finding Your Future Specialization By Interviewing Your Current Clients

Kitces & Carl Ep 79: Finding Your Future Specialization By Interviewing Your Current Clients

Traditionally, financial advisors built their clientele by working with anyone who had the financial wherewithal to buy whatever products or services they had to offer. And as advisor platforms have become increasingly open architecture, advisors have had an increasing number of offerings available to work with an ever-widening range of clientele. However, at the same time, the fact that ‘any’ advisor can offer almost ‘any’ product has made it more difficult for a particular advisor to differentiate themselves from other advisors. For many advisors, the solution to this challenge is to get more focused – which means choosing a specific niche or a specialization and differentiating themselves by offering an even more specific offering for their particular clientele. The idea may seem simple in concept, but implementation of a niche or specialization can feel daunting, risky, and even downright scary!

In our 79th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how to begin the process of finding a niche, ways advisors can conduct research to decide if a chosen niche is a good fit for their firm, and, once a niche is chosen, how to begin attracting new clients.

As a starting point, it’s important for advisors to understand the types of clients they already serve. Compiling a list of existing clients and differentiating them through qualifiers such as occupation (and whether they have enough revenue to be financially viable) can give clarity as to whether a potential niche already exists. From that list, advisors can then choose 5-10 (reasonably remunerative) clients they like working with and decide if they would like to work with more of that same type of client. A good way to approach this is to consider whether there is a common problem these clients face, and if the problem would be interesting for the advisor to solve for more prospective clients who face the same challenges.

Once a set of clients has been chosen, advisors can set up meetings over coffee or lunch with the intention of learning more about the types of issues these clients face, and what it would take to attract more clients like them. By interviewing these clients and asking a predesigned set of questions, advisors can gain an understanding of the viability of the proposed niche. Taking this a step further, information gathered can be used to write a white paper that can serve as both a reference for market research, and as a handout back to the interviewed clients so that they may share it with others potentially within the same niche to help attract future clients.

Ultimately, the key point is that financial advisors considering a change in their business focus may not have to look far to find their niche or specialization. Communicating with current clients gives an opportunity for advisors to discover how they can not only help them, but future clients with similar financial planning issues. Which means choosing a niche doesn’t have to be a grandiose declaration that feels foreboding and irrevocable; it can be as simple as just taking a renewed focus on a segment of clients that are already “working” for the business and pursuing more clients just like them!

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