Having a good understanding of the market space in which you operate is critical to growing your practice. This knowledge will allow you to put measures in place to deal with competitive challenges, refine the range of products and services you offer and align your resources to take advantage of opportunities.
For example, if you’re prospecting for clients, you should find out who your competitors are, says Jim Vlahos, senior vice president of sales at Franklin Templeton Investments Corp. in Toronto. You should also find out their backgrounds. What do they do? Who do they do it for? How do they differentiate themselves?
You can stay on top of what your competition is up to through industry research, media reports and professional publications such as whitepapers, and by networking with your peers, Vlahos says.
“Your own clients are also a good source of competitive information,” he says.
Here are some tips to help you assess the market space in which you operate:
> Know your competitors
Identify financial advisors who offer products and services that are similar to what you offer, Vlahos says. They are your closest competitors. Find out as much as possible about them, including the products and services they provide, their areas of specialization and any niches they serve.
Learning about your competition is also helpful in retaining your existing clients because you will be kept up to date on issues such as fees, communication trends and product mix. To stay ahead of your competitors, watch for emerging trends you can capitalize on.
> Determine your target clients
Different markets have different characteristics. Determine which segment of the market or niche has the best potential for growth.
Based on your understanding of the competitive landscape, find out whether the segment you are planning to serve is large enough to support your growth plans. Also, look at the capabilities of your competitors who serve the same market, Vlahos says, and how they differentiate themselves.
How do these advisors interact with centers of influence such as lawyers and estate planners? How do they educate their clients? How do they construct their portfolios? Answers to these questions can help you develop appropriate strategies to take on your competitors.
> Put that information to use
The information you gather from your assessment of the competitive landscape should allow you to plan for the growth of your practice. Persuading clients to choose you over existing providers or to switch their business to you can be challenging. But information you gained by analysing your environment might help you locate unfulfilled needs, Vlahos says.
You can capitalize on what you know by building your business around meeting those needs.
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