Financial advisor target market development is key to ongoing financial success. One of the top marketing mistakes financial advisors make is to not focus on a niche, or target market. This lack of focus positions you as a generalist who will take any client walking through the door. While unsophisticated clients will often overlook this lack of tactical expertise, refined clients will not.
Read the full series on marketing mistakes that financial advisors make here.
You can’t please everyone, so why try?
I know it’s tempting to say that you work with everyone who needs financial advice, because working with even 2% of a large market is good, right? No, this is simply not the case. What it really comes down to is that you can’t please everyone all the time, so why try?
As a coach for advisors, one of the first questions I often ask prospective clients is “Who is your target market?” By my unofficial survey, 90% of advisors don’t focus on a niche market, at least not officially in their marketing collateral such as on their website or brochure. I believe this is mostly because they don’t want to risk turning away clients.
I know it’s scary to declare a niche, but it’s a truly effective way to distinguish yourself from thousands of other advisors who offer a dizzying array of services to a wide range of clients.
“In a recent @TDA4advisors survey, niched advisors showed 35% higher client growth, 25% higher revenue growth and 17% higher profit margins than non-niched financial planning practices.”
What are typical target markets for advisors?
- Business owners
- Individuals and families
While declaring a niche in these areas is better than nothing, advisors can go much deeper by getting into demographics and psychographics. Yes, women would be more likely to hire you if you “specialize” in their needs. I encourage you to think of “women” as a broad niche and “single professional women over 40” as a more defined niche.
Example of financial advisors targeting women
Over 15 years ago I worked with an advisor who was passionate about how he could help women with their finances. This advisor had 20 years in the industry, yet he was having a difficult time attracting women clients until he started working with me. We did a deep dive into the WHY behind wanting to work with women. This advisor’s mom had passed away when he was 8 years old and his father was not in the picture. In order to stay out of foster homes, his aunt adopted him. It was not an easy road growing up and his aunt worked two jobs to put him through private high school and university. You can see that his passion was because he wanted to give back in some way and this desire drove him. Your reason for target women doesn’t have to be as dramatic as this, but you do need to be passionate. Read this article on how financial advisors can work with women and the reasons behind the WHY women want to work with you.
What are more defined target markets?
Here is a list of possible niche/target markets that financial advisors can seek to attract:
- Couples (DINK’s – double income, no kids)
- Families with children
- Widowed women over 50
- Divorced women
- Single, professional women
- Women entrepreneurs
- Family businesses
- Business owners or employees in specific industries: agriculture, building, green building, architecture, website design, travel, hospitality, restaurants or food industry, apparel manufacturing, arts and entertainment, retail, mining, the motion picture industry, oil and gas extraction
- Complete list of Industries in the United States
- Physicians and professionals in the medical industry
- Pet care industries such as veterinarians, groomers, and pet products
- Sports celebrities and athletes
- Airline pilots, cabin crew members, and airline professionals
- Technology industry executive or employees
- Military service members or former military
- Teachers or educators
- Public or state service employees
- 401(k) plan-specific participants such as those who work for Motorola, Intel, Merck, etc.
- PANKs: Professional Aunts, No Kids
- Yummies: Young Urban Males
- New or expecting parents
What are under-served target markets?
- Gay or lesbian couples
- Muslim families or businesses
- Hispanic families or businesses
What are the benefits of having a financial advisor target market?
There are many benefits of focusing your practice on a few specific areas where you have expertise and where you can make a real difference. Here are just a few:
Increase your income
When you go deep into the specific issues of a defined target market you learn to overcome challenges over and over again. It’s a no-brainer that you can charge more for intricate expertise.
Increase referrals from your clients
When you can explain how you help clients in specific professions, industries, or demographics you a clearer picture of whom your clients can refer to you.
Increase referrals from centers of influence
CPA’s and estate planning attorneys are approached all the time by advisors wanting to develop reciprocal referral arrangements. When you refine your target market, you stand out from everyone else. When you can explain the sophisticated solutions you have developed for your clients, you stand out even more.
Decrease marketing costs
Rather than sending direct mail to thousands of households, refining your niche and your message can save you printing and postage costs.
Narrow your networking
You can network at the chamber of commerce with hundreds of other advisors or you can network at the local SHRM event and rub shoulders with professionals in the HR department of your chosen niche.
Attract clients with your website
I call this effortless marketing – create landing pages on your website that talk about specific issues faced by your clients and how you have helped them. There is a certain amount of expertise required in this strategy, so do seek the help of experts if you go in this direction.
Now that you see the possibilities of improving your business by targeting a niche, is it time to undergo a change in your strategic direction?
Contact me for a Consultation!
I can help you parlay this tactical strategy into a winning way to acquire new clients. My client Bonnie attracted a $1.2M rollover from this strategy. The client found HER and contacted HER. She did not have to go out and pound the pavement to land a new client. Wouldn’t you rather have clients come directly TO YOU?