In the roaring bull market of the late 1990s, it was easy for competent advisors to get new clients. In fact, they seemed to be coming out of the woodwork. The most popular marketing technique during this period was the "passive referral," which basically meant that the advisor did nothing. Investors somehow found the advisor because of their strong desire to get into the market.
Today, the market has changed dramatically, and most investors aren't nearly as enthusiastic about tracking down an advisor and diving into the market. In this environment, advisors need to become more sophisticated in the services they offer and the methods they use to attract new clients.
Over the years, I've found that a common denominator among successful advisors is that they all have identified specific market niches where there are high concentrations of people who want and need their services.
If you can find a rich niche of qualified prospects who want and need your services, it will transform your business. If you do not identify specific markets that want and need your services, you will find it more and more difficult to get high-quality new clients.
Let's take a look at what it takes to find rich niches in your marketplace.
Wealth in the Rural Community
Nancy Sash is a financial advisor in Medford, Oregon. For the last couple of years, she has been trying to identify a rich niche in this agricultural center in south central Oregon. She finally found a fairly large medical imaging lab there that is owned by a Fortune 500 company.
She found out about this rich niche from her company, which had a relationship with the parent company and gave Nancy a lead to a key contact within the company. Once she identified a viable target market within the company's employees, Nancy set up a campaign to build relationships within the organization.
Nancy started by offering retirement seminars for the older employees. Over the last year, she has developed strong relationships with influential people within the organization. She has attracted a handful of good clients, but is expecting a stronger flow of even better clients coming from this organization. She is continuing to build relationships within the company and with its retirees. The momentum is building.
Until Nancy found this niche, she had no focus to her marketing. She would get a client here or a client there. Each one was different. Most did not have a major financial event in their lives, so they were more labor-intensive financial planning clients rather than asset management clients.
Now that she has identified this rich niche, Nancy has created an organized process for developing clients within it. Nancy does periodic retirement seminars for this facility and is becoming well known on the campus as the "go-to gal" for people planning to retire from the company.
This is one of the most powerful benefits of niche marketing: People you are already working with can recommend you to other people just like them, and everybody knows you have the expertise to solve the problems that are unique to that segment of the population.
Nancy has gotten some of her best clients ever from her new market segment. Now she is doing research interviews to build relationships and to identify opportunities to provide even better service to them. She is finally developing a consistent flow of qualified, motivated clients who already trust her–and the account sizes seem to be getting bigger and bigger.
Finding Your Own Rich Niche
Every advisor needs to find a specific group of people that they can serve. But how do you go about finding a niche if you do not already know where one exists?
There are two basic kinds of research. One is secondary research, which involves reviewing research conducted by someone else. This is a good method for identifying big-picture economic drivers in your marketplace, the major employers in your area, and other major engines of capital formation. This type of research is best for providing background and establishing context about the demographics of your market.
