Should I … Focus on a Niche?
If you are versed in a genuine specialty, it can be a great way to stand out from the rest of the pack. But it also narrows your potential client universe.
If you are versed in a genuine specialty, it can be a great way to stand out, but in a smaller client universe.
CREATING A NICHE MARKET FOR YOUR PLANNING services can be an opportunity to stand out in a crowded field of advisors.
When Individual Asset Management founder Tom Zachystal turned his focus more internationally, he found his target audience. At his planning firm in Menlo Park, California, 90% of the clients have something big in common: they are either Americans living abroad or foreign citizens living in the United States.
“We specialize in cross-border issues, which is kind of unusual, so clients seek us out,” Zachystal says.
They often find him while looking for solutions to problems that flow from United States tax laws. “U.S. citizens who live overseas have a U.S. tax-reporting burden, and then their brokerage firms do as well, so both local and U.S. brokerage firms shy away from them,” Zachystal says.
Expats often have tax quandaries as well as problems with estate planning, moving money among nations, getting bank accounts and debit cards and wiring funds.
He solves the problem by using custodial firms to hold client accounts and finding discount brokerage firms that will accept their business.
“The key is to have a network of professionals in different countries and areas of expertise,” he says, because a planner can’t possibly be an expert on every country’s cross-border policies.
A niche practice might be right for you, too, if you can develop a genuine specialty.
“Is there anything really different about helping dentists, as opposed to helping physicians?” Zachystal asks. “Not really. You should bring some kind of specific qualifications or knowledge. That’s what’s valuable.”
SLOW AND STEADY
A word of warning is in order: A practice that is designed to serve a particular niche from the very beginning may take awhile to get off the ground.
“It was difficult to get the practice going,” Zachystal says. “I can’t meet most of my clients in person, so they can’t see our offices. There are many weird things going on in unregulated financial markets, so expats of many years tend to be cautious. It took 10 years for my name to really get around the expat community.”
Converting a general practice over to niche is often easier, according to those who have done it. Melissa Ellis, founder of Sapphire Wealth Planning in Overland Park, Kansas, made the conversion gradually.
“My client base was mostly women in their 30s, 40s and 50s, and college planning and divorce were the issues they were dealing with,” she says.
“I was divorced myself at the time and had kids in high school and college, and as I learned about my own situation, I realized that there are a lot of issues around college planning when the parents are divorced.”
Bit by bit, Ellis began to specialize in working with divorced women who are faced with college planning needs for their children. She maintains general clients, but new additions tend to seek her out for her specialty. Of course, some dismiss her as a potential planner because of her specialty, and Ellis accepts that.
“I don’t want to be all things to all people,” she explains. “Some people will look at my website and say, ‘That’s not me.’ But I also attract the people who are right for me.”
DRIVEN BY CHARITY
Personal interests also got Patrick Renn into a niche practice. The founder and president of Renn Wealth Management, based in Atlanta, he became involved with the Special Olympics and over time gained board members and donors as clients.
That grew into a specialization in prosperous clients who are interested in and involved with substantial charitable giving.
“A lot of planners don’t regularly talk with their clients about significant charitable giving,” Renn says. “Either they’re not familiar with the concepts or they aren’t familiar with discussing it, because they don’t feel expert enough. But clients want to talk about it.”
Renn points out a great benefit in developing a niche as a planner. “In the public’s eyes, there’s a great sameness among advisors. Once you figure out what you can really get excited about, it’s very freeing,” he says. “You can focus on becoming the go-to person in that niche” — a powerful position for any planner.
Is helping dentists different from helping physicians? Not really. “You should bring some kind of specific qualifications or knowledge. That’s what’s valuable.”