One of the best ways to structure your practice to be more successful is through creating a target market for your services. In fact, the more specific your niche is, the better!
Choosing a specific niche allows advisers to differentiate themselves, build efficient practices, and develop deep expertise. However, choosing a niche can feel risky. What if you alienate prospects or existing clients? And how do you create and serve a niche?
Read below to learn more about how to choose and validate a niche and how we picked ours.
Step One: Picking your niche requires some thought
Choosing the right niche for your practice requires drilling down into broader demographic or occupational groups to identify ones that share a common financial problem that requires your help to solve. A simple formula recommended by Kitces is the “One Client + One Problem” formula, where you start with a group that resides in one of the following five categories: Career, life event, specialty, mindset and values, or affinity. Then, identify a specific problem that they need your help to solve and that you are uniquely qualified to address.
At Carson Wealth, our niche is “women in transition,” particularly widowed women. Our mission is to help women—throughout all stages of life—confidently forge their financial futures.
Not only is this connected to my personal story (growing up with a widowed mother at a very young age), it is something we are extremely passionate about. We are committed to advising independent, affluent women with life transitions and helping them understand their wealth and navigate their futures. These “transitions” can be changes to family, health, divorce, or death of a spouse.
Unfortunately, women are often left out of financial conversations and therefore struggle with taking control of their finances and understanding them, particularly if the change is abrupt and unexpected. At Carson Wealth, we aim to solve that problem and make financial prosperity more accessible to women and their families. Our objectives come off as very genuine when speaking with prospects, helping us to close women who need our help.
Pro tip: Identify a group of people who may be underserved or have specific needs. Also think about what you are passionate about. What specialty resonates with you?
Step Two: Ten steps to assess the viability of your niche
The next step is to ensure that your niche is viable and whether it is a good fit for you and your practice. To make it easy, we list below the 10 factors highlighted in the Kitces article you should use to answer those questions. While not all of these are equally relevant, the strongest niche clients will have purchasing power, be easy to target, and have complex financial needs.
- Pain: There should be a significant pain point for this demographic in relation to the problem they need solving. You need to be able to offer the solution to this pain point.
- Urgency: There must be an urgent need to solve this problem. Urgent enough that someone is willing to seek you out, pay you, and work with you for years for this solution.
- Complexity: The financial problem must be something complex enough that it requires multiple solutions, strategies, and services to solve. Not only does this give you more opportunity to offer multiple paid service solutions, but it’s a problem the client could not possibly solve on their own.
- Purchasing power: A willingness and ability to pay fees is essential for your target niche. You need to target clients who need your services and have the funds to pay you.
- Growth potential: An expanding niche market is essential. You want there to always be more people who need your help.
- Findability: Your niche needs to be easy enough for you to target and reach.
- Competitive landscape: There should be potential for you to dominate and become an expert in this space. This is key for differentiating yourself from other advisors.
- Advisor expertise: You should possess the basic skills and knowledge to help solve your niche’s problems.
- Credibility: You should possess a minimum amount of credibility to quickly be able to establish trust with your ideal clients.
- Access: Your niche should already be accessible to you through existing networks. Remember, this should be a natural fit and an easy demographic for you to reach.
As Carson Wealth is a women-founded and run business, we found that targeting women and their families came naturally to us. Personally, we have individually experienced the hardships of securing our financial future as women. Plus, as women increasingly become breadwinners, their needs are only growing.
When you also consider the unique challenges, like living longer, that women face when planning for retirement, there is a clear need for an advisor who specializes in meeting their needs.
Pro tip: Assess your niche reviewing the 10 factors listed above. Ask yourself whether you have an unfair competitive advantage in serving your proposed target market.
Step Three: Refine your niche
Advisors should expect to be continuously refining and adjusting their niche based on experience and assessment. The more specific your niche is, the more you will stand out!
For example, at Carson Wealth, we focus on specific life stages or unusual circumstances that women face, like widowhood and addressing complex taxes. Overall, the more you refine, the more you develop a deep knowledge about specific client challenges, positioning yourself as an expert in that target demographic. This will make it easier to develop your firm’s client and marketing strategies and allow you to more effortlessly attract your ideal client!
In addition, by having an appropriate focus to your targeted market, you are able to develop the processes and train your team so that the quality services you provide are also efficiently delivered.
Finally, you can also leverage your niche to create “community,” holding client events centered on building fellowship and educating your clients with similar needs. For example, recently we hosted a women’s Wellness and Champagne Brunch for our women clients to relax, catch up, and connect. We also recently hosted an estate planning attorney who also presented to the women clients.
Pro tip: We have tailored much of our client experience around the women we want to serve. We host monthly client events that serve to educate women and provide a fun and approachable environment for networking and learning. They love getting together and being part of a community. We also offer customized education to women in the form of webinars, newsletters and speakers.
The main takeaway is that advisors who serve a specific, narrowly defined niche, with a specific need, are more likely to build a successful and thriving business.
By catering to the unique needs of their niche, advisors can distinguish themselves more effectively, develop customized and persuasive marketing strategies, become more easily referable, and achieve greater efficiencies in their operations.
Refining your niche will make you an expert and beacon for the people you wish to serve!