Specialization is everywhere. We see it in medicine, dentistry, law, even technology; seemingly everywhere we look, some company has cultivated a carefully marketed niche within their profession, and limited their expertise to just that service or specialty.
In the 23 years that I have been in financial services, I have seen many an advisor become overwhelmed by trying to be all things to clients of all ages and incomes. As fast as our markets are changing, this has rapidly become an unsustainable business model. It's challenging enough to keep up with product improvements across a dozen companies in the same product line each month. Keeping pace with changes in the equities markets, mutual funds, variable annuities, ETFs, index funds, index annuities, VA and IA income riders, long-term care solutions (both traditional and asset-based), life insurance (term, permanent and as an asset class), health and disability insurance, Medicare supplements, trusts, wills and estate planning — and now also tax preparation — strikes many seasoned niche advisors as the definition of insanity and a sure recipe for career burnout. Staying abreast of the ever-changing regulatory landscape in just one of those areas is challenging enough. Doing so in each area would require a full-time staff person, weekly staff meetings and regular psychotherapy.
The preferred model
Specialization is a much-preferred and simpler career model. Practitioners cite fewer headaches, contented clients with more reasonable expectations, streamlined business flow, efficiency and profitability, and even happier staff. Repeat after me:
"We are a boutique firm in a niche market, serving risk-averse retirees and pre-retirees, specializing in guaranteed income-for-life, guaranteed legacies to children and charities and tax-favored yields without market risk."
It's simple. It's focused. It's guaranteed. You can say it in an elevator, on the golf course or at a dinner party. It's intriguing and invites further inquiry. (Did I mention that it's guaranteed?) You may want to elaborate:
