Growing Your Practice

The Importance of Niches as a Financial Advisor

By :
Jacob Shamberger
As a financial advisor it is hard to acquire clients. Naming your niche and becoming a subject matter expert can help propel growth in your practice.

Name Your Niche and Build Your Business

Do your clients fit a certain profile? Do you have an ideal client in your head, and do you make business decisions with this model client in mind? If you don’t, you may be putting more work on your desk and leaving money sitting on the table. 

Simply put, the typical financial advisor doesn’t have a typical client. This is bad news for the typical financial advisor, because generalists could have trouble making their names. Generalists may protest that they have more potential clients, but potential clients doesn’t equal a larger client base or more assets under management. Maybe it is time to consider developing a niche. 


Identifying Financial Advisor Niches

Stephen Wershing, who literally wrote the book on finding financial niches, maintains that there are six kinds of advisory niches: Affinity, Values, Educational, Experiential, Psychosocial, and Technical. As Wershing explains, an affinity niche derives from an interest or a group membership shared with clients; a values niche originates when the financial advisor and the client share principles that they wish to see followed in their investment strategy. An educational niche serves clients looking to learn about sudden changes in their personal life, like inheriting wealth. An experiential niche might offer unusual experiences for clients — they might meet in groups, for example. Psychosocial advisors aid clients going through difficult experiences such as divorce. Finally, technical advisors specialize in clients with particular and unusual circumstances, like tech entrepreneurs. 

Talk of “affinity” and other types of niches might seem dry, but niches offer financial advisors a chance to mix their business with their other passions. A financial-planning.com piece offers eight memorable examples of advisors growing their business by following their passions. One advisor serves fly-fishers, a second serves LGBT clients, a third assists Native American investors, and a fourth reports that 90% of their clients are airline pilots. These examples show that pursuing clients with similar interests or profiles doesn’t just spur growth in your business, but also makes work more satisfying by bringing you closer to your communities 


Benefits of a Niche

As long as there have been financial advisors, there have been specialists. By specializing, financial advisors streamline their operations and have enjoyed the opportunity to take a deep dive into the concerns and needs of their chosen demographic. Then, of course, there’s the matter of referrals: If you become known as the advisor for a group, you’ll win referral and word-of-mouth sign-ups.The more similar clients you work with, the more you become an expert, and the more your community or interest group recognizes you as the expert. If two people in a potential client’s peer group speak highly of your services and of your individual niche knowledge, chances are that third client will come your way. And down the line, she may refer her friends and peers.

The traditional benefits of working in a limited area still apply, but in today’s economy, there are new supplemental benefits. Most importantly, the internet makes life harder for a generalist and simpler for a specialist. If you’re a jack-of-all-trades advisor, you’ll have to fight hard to get your practice to the top of local search listings — distinguishing yourself from colleagues and peers will take much of your time. But if you’re a specialist, the vast trove of data online makes it easier than ever to search for, identify, and contact the clients you can best serve. 


Navigating Niches

Niche-seeking financial advisors should expect that the process of finding and building a niche will be an iterative process. Suppose, for example, that you decide that you will work with local entrepreneurs. “Entrepreneurs” is a broad category, and as a time goes on, chances are that you will concentrate more and more attention on some specific subset of “Entrepreneurs.” If you find success with young entrepreneurs in the technology space, chances are that you’ll soon find yourself acquiring new clients in that demographic. 

Or suppose that one of your entrepreneurial clients has a major success and sees their company expand rapidly. Perhaps you initially handled assets for the co-founders, but after growth, expansion, and fundraising rounds, there are dozens of people with money in the bank and equity in the company. If a junior executive needs a financial advisor, why would they go to anyone but you? 

As the previous example suggests, niche-seeking advisors need to be flexible. The niche you hold at the midpoint or at the end of your career might not exist in your first days as a financial advisor, and it’s possible that over time your focus may change. But if you keep learning and paying attention, the clients will keep coming.

Conclusion

There are many niches available for financial advisors, and as the world changes, even more new opportunities will arise. Whether you distinguish yourself with cutting-edge tech, hyper-specific personalized services, or by knowing all of the ins and outs of a single demographic, some things don’t change. You still need the best tools for your clients, whatever their desires might be. At Vise, we’re committed to giving you what you need to succeed. Whatever details you need to provide, whatever strategies you want to implement, and whatever niches you opt to serve, our platform can help you live up to your potential and your clients’ expectations. 


Sign up to keep up with new updates and content!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
ViseFeatures
1 World Trade Center, Suite 84A
New York, NY 10007
Legal / Privacy Policy
Copyright © 2020 Vise, Inc.. All Rights Reserved

Vise AI Advisors, LLC is an investment adviser in New York, New York. Vise AI Advisors, LLC is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Vise AI Advisors, LLC only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Vise AI Advisors, LLC’s current written disclosure brochure filed with the SEC which discusses among other things, Vise AI Advisors, LLC’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov.

Please note, the information provided on this website is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. Please refer to the disclosure and offering documents for further information concerning specific products or services.

Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

This site may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of Vise AI Advisors, LLC’s or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.

Certain hyperlinks or referenced websites on the Site, if any, are for your convenience and forward you to third parties’ websites, which generally are recognized by their top level domain name. Any descriptions of, references to, or links to other products, publications or services does not constitute an endorsement, authorization, sponsorship by or affiliation with Vise AI Advisors, LLC with respect to any linked site or its sponsor, unless expressly stated by Vise AI Advisors, LLC. Any such information, products or sites have not necessarily been reviewed by Vise AI Advisors, LLC and are provided or maintained by third parties over whom Vise AI Advisors, LLC exercises no control. Vise AI Advisors, LLC expressly disclaim any responsibility for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites.

Any reproduction or distribution of this website, as a whole or in part, or the disclosure of the contents hereof, without the prior written consent of Vise AI Advisors, LLC is prohibited.

Monte Carlo simulations have material limitations. Market movements may be more or less extreme and more or less frequent than those that occur in the model. Certain asset classes and investments have shorter histories than others and may not be as reliable. Market Events and other factors may influence the reliability of the potential outcomes.

All investment strategies have the potential or profit or loss. Changes in investment strategies, contributions or withdrawals, and economic conditions, may materially alter the performance of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will either be suitable or profitable for a client’s portfolio. There are no assurances that the portfolio will match or outperform any particular benchmark.

Back-tested performance results have inherent limitations, particularly in the fact that these results do not represent actual trading and may not reflect the impact that material economic and market factors might have placed on the advisor’s decision-making if the advisor were actually managing the clients’ money.

Nothing provided herein constitutes tax advice. Individuals should seek the advise of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or any other jurisdiction.