When starting your career as a financial advisor, your natural tendency is to take on any client who is willing to work with you. But if you eventually work in a niche, you will be able to use your time and skills more effectively to serve a unique set of clients while differentiating yourself in a competitive market.
Also, by serving a narrow market, you can be more selective in choosing clients and establish credibility with a specific group of clients, say George Hartman, managing partner with Elite Advisors Canada Inc. in Toronto.
Although finding a niche is important, becoming established in an area of specialization can take years. Konrad Kopacz, investment advisor with Euro-Pacific Canada Inc. in Burlington, Ont., says establishing a niche shouldn’t be your primary goal when you first set out in the advisory business. First, Kopacz says, you should find a way to stand out in the crowd.
To find your niche, Hartman says, start by looking at the circle of relationships you have had in the past, such as your former classmates or colleagues – people you can relate to.
Your circle of friends
Robert Ruffolo, senior vice president with Franklin Templeton Investments Corp. in Montreal, suggests you also look at your circle of friends, or some area in which you have been an influencer or have some form of connection. For example, he says, you might have worked in the hockey industry and developed contacts there.
“Select an area,” he says, “and strive to learn everything about it.”
Jonathan Rivard, financial advisor and regional leader with Edward Jones in Richmond Hill, Ont., says you must understand the lifestyle and the challenges faced by people in your niche and consider how you’re going to help them.
“Your interests must be aligned with their interests,” Rivard says.
Acquire in-depth knowledge and stay abreast of developments in your chosen niche. You must be able to carry on a sensible conversation with your clients about what they do, Rivard adds. For example, if you develop a niche in the farming community, you must be able to talk about agriculture and tractors, he advises. Clients are more comfortable working with advisors who understand their business.
Raymond Yates, financial advisor and senior partner with Save Right Financial Inc. in Mississauga, Ont., says you must be comfortable and committed to working in your niche and have the knowledge to serve it.
One caveat to selecting a niche, advises Hartman, is to make sure it is not too narrow; you should try to leave room to grow.
Many young advisors view working in a niche as potentially limiting, Yates says, as they believe “they will be limiting the number of clients they have access to.”
But, he adds, although you may have access to a larger pool of clients in the broader market, you will not necessarily attract more clients, especially considering the competitive nature of the general financial advisory market.
“You stand a greater chance of attracting clients in a niche than in the broader market,” Yates says. “Alternatively, you risk losing the opportunity [to attract clients] to those advisors who have a niche.”
Once you’ve identified your niche, Rivard advises, create a personal brand and market yourself. Promote your business using marketing methods that are effective in your niche and based on your knowledge of these clients’ unique attributes, likes and dislikes.
“Treat everyone in your niche like your No. 1 client,” Kopacz says, “and overservice them.”
Providing this level of service, he adds, will lead to an increasing number of referrals.
Yates suggests several methods to expand your influence within your selected niche: make centres of influence aware of your niche; speak at community events; write articles for local newspapers; join associations with which your niche is associated; sit on relevant boards and committees.
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