In today’s competitive marketplace, financial advisors must work harder than ever to develop a compelling value proposition. When traditional tactics fail, advisors may find that identifying a niche to serve will reinvigorate their practice and give them direction. But according to Dr. John L. Evans, Jr., Head Strategist of Knowledge Labs®, finding the right niche is not a quick fix, but an ongoing process of self-discovery.
I’d like to begin by stating the obvious: You are building your business in an extremely commoditized world. While there is nothing surprising or new about this statement, I would argue that the potential consequences behind it are more pressing than ever.
Playing by the old rules and failing to differentiate is increasingly forcing advisors to explore other lines of work. But I believe it is possible to build a compelling value proposition, even in this crowded marketplace. You simply must think differently – and be willing to make a meaningful adjustment in your practice.
Consider my longtime friend Conrad. He was a visionary financial planner based in the Southeast. Years ago, Conrad realized he needed to alter his mode of doing business and to abandon the conventional wisdom of building his book through traditional seminars, letter writing, asking for referrals and cold calling. Early on, he recognized the inglorious trajectory that worn-out marketing schemes would yield (they were a yawn, at best).
So, he made a change.
Conrad had a real affinity for professionals like himself who had elected to move from Puerto Rico to the U.S. He worked to become an expert on the matter, learning every nuance that, say, a doctor would need to make the move. He found himself giving small group lectures (seminar/focus group hybrids that he dubbed “focinars”) on the topic. Word quickly started to spread throughout the Puerto Rican community as Conrad’s credibility – and book of business – grew.
When you talk to Conrad about this, you can clearly sense the passion in his voice. He feels it is his calling to provide this unique service to this specific group of individuals. And because he owns the space, he has developed a sort of magnetism that has allowed him to build a dedicated client base.
I have attended Conrad’s focinars and they are a wholly different experience compared to a typical, humdrum advisor seminar. Yes, he will speak about efficient frontiers and risk-adjusted returns, but not until he’s earned the right by demonstrating his commitment to the betterment of his audience.
The key takeaway from this story is that success is not about who you know; rather, it’s about who knows you and what they say about you when you’re not in the room. And believe me, many, many people say extremely positive things about Conrad when he’s not in the room – that’s why he’s thriving at the top.
Three Keys to Finding Your Calling
I’ll preface this section by acknowledging that it really isn’t possible to offer concrete tips or action items on finding one’s true calling as an advisor. Quite often, it’s a matter of serendipity that leads us to discover who we were meant to serve. That said, I can offer some general guidelines that I believe will at least help you take a different perspective on your business.
- Identify your niche. Again, there is no set method for defining who this group might be. It is not a one-time exercise with one correct answer, but rather an ongoing process of self-discovery. Start by asking yourself who is the differentiated group of individuals about whom you have unique and intimate knowledge? (Hint: It is probably a group you interact with regularly, even if that group currently consists of just a few people.) It could be based on profession, ethnicity or geography. For example, the other day I met with an advisor who works with pistachio farmers in California. I also know someone who built a successful practice advising Vietnamese restaurant owners.
- Be prepared to study. It is highly unlikely you will start out with all the knowledge you need to provide the kind of in-depth, specialized guidance the members of your niche group need. Prepare to make a ritual of reading and studying about them. Trade journals are a great place to start. It takes effort, but when you demonstrate your knowledge of your niche’s industry, you establish credibility and trust, and your star rises.
- Make your seminars matter. Whether or not you decide to adopt the term “focinar,” you will need to make each client presentation, event and seminar memorable. I recommend keeping the group size to under 15 people to allow for individual attention and intimacy. After each event, send a personalized, handwritten note to every attendee (all the more reason to limit the size of your group).
Clearly, it takes a bit more effort to develop a compelling value proposition in today’s competitive environment. But consider the benefits – the most obvious being that people who are specialized are typically compensated accordingly (think specialists versus general practitioners in the medical profession).
Of course, as with most things in life, doing this for the money will not take you far. The true benefit to be found in finding your calling and serving the niche you were meant to serve goes far deeper than simply growing your book of business.
Knowing you are helping a group of people who share common experiences and challenges gives you direction in life. It allows you to immerse yourself in a single, well-defined goal. And seeing those efforts translated into the betterment of your clients is the ultimate fulfillment of that goal.
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