CRITICAL BEST PRACTICES FOR THE 21 st CENTURY ADVISOR
The Truth About
Niche Marketing
Niche marketing is a popular term among financial advisors, but the concepts
behind it are often misunderstood. Learn the fundamentals of niche marketing
by reading this essential report from The Short List, our recommended library
of concise, must-know topics that helps you stay on top of your profession.
When it comes to your business, you think big. Your plans are so big, in fact, that you might think niche
marketing is too small-scale to help you reach your goals. Nothing could be further from the truth. As
many advisors have discovered, the key to making your practice big is to cast your net over a smaller
pool. A niche.
Start marketing your services to a niche, and the odds are good that you’ll see your business grow. A
survey of 2,100 advisors revealed that those who work in a niche realized higher production, increased
referrals, easier access to prospects, better and wealthier clients, an enhanced reputation and status,
and many other positive results.1
You’re probably part of a niche yourself. Do you have any hobbies? An advisor named Jared Reynolds
built his practice around serving investors who share his love of bass fishing.2 His father was a
professional bass fisherman and Jared’s an amateur who understands what’s important to bass fisherman
beyond their actual days on the water. He also knows what kind of wealth there is among enthusiasts
and understands that like-minded people are open to advice from one another. By catering to his natural
niche, Jared’s business has experienced considerable success.
There are a lot of misconceptions among financial advisors about niche
marketing. Let’s look at four common concerns and determine what’s true
and what’s false.
1
2
http://www.horsesmouth.com/mktgpage/RNMG
http://www.cnbc.com/id/101945187
FOR REGISTERED REPRESENTATIVE USE ONLY.
THE SHORT LIST : : NICHE MARKETING : : PAGE 1
Belief #1
Specializing in a particular niche will limit your ability to attract
more clients.
False.
Specializing will focus your practice on people who not only need your
services, but will champion your services to others in their niche, people with
whom they spend time. This word-of-mouth advertising is greatly enhanced
among a group of people who have something in common. Network in
wealthier channels and you’ll find that growing your practice within a niche
is much more effective than marketing your services to the masses.
According to a recent Gallup poll, 37 percent of Americans with at least
$10,000 in investments have never sought professional advice.3 That means
37 percent of any niche you target have probably never sought the kind
of financial advice you offer. That’s a lot of people you can bring into your
practice, no matter what your niche.
85%
of advisors surveyed
reported that their
niche clients were more
profitable for their
business, compared to
their general clients.4
Belief #2
A group of people approximately the same age represents
a niche.
False.
Perhaps the most common misperception about niches is that people of a
similar age represent one. Nothing could be further from the truth. Think
about your high school graduating class. Exactly what did you have in
common with everyone else in your class? You were all about the same
age. That was it. Once you graduated, you moved on and pursued your
professional and personal interests, thereby getting in touch with people
of different ages and backgrounds and – voilà! – niches were born.
A niche is a group of individuals with something in common, something
that’s important to them. That thing may be where they’re employed, what
job they perform, what charity drives them to volunteer, what hobbies draw
them during their free time, and hundreds of other factors. Find people
with common interests and you’ve found a niche that can bring great
revenue to your business.
3
4
http://thereformedbroker.com/2014/09/14/63-percent-of-americans-seek-financial-planning-advice/
http://www.horsesmouth.com/mktgpage/RNMG
PAGE 2 : : THE SHORT LIST : : NICHE MARKETING
Niche Marketing by the Numbers
From 2004 to 2012,
the total number of advisors
in the U.S.
fell 9.4%.
5
By 2020,
global assets under management
are expected to
nearly double.
6
Focusing on a niche can help you maximize this opportunity.
Belief #3
There are as many niches as there are interests and professions.
True.
The Colorado Society of Certified Public Accountants® represents a niche, the Women Presidents’
Organization® represents another, and the National Physicians Alliance yet another. These are
groups – both local and national – whose members convene at regular intervals, stay in contact
and seek advice from one another based on their mutual interest.
Other niches are more informal or come together simply because of a shared experience. An
advisor in Miami named Jill M. transformed her practice after noticing that many of her clients
and prospects were widows. Jill had lost her father at an early age and witnessed her mother’s
resulting emotional and financial struggles, so widows represented a natural niche for her. Jill
knew what questions to ask and what to avoid. She understood the little things widows need
help with around the house, even something as trivial as opening the mail. Most important was
Jill’s genuine emotional connection to each woman, allowing her to serve as a guide during a
trying time.
In subsequent years, Jill would educate members of SHINE (Serving Health Insurance Needs of
Elders) in her community on Medicare, Social Security and related topics. She would also host
events on Valentine’s Day and other holidays, knowing that often, people who’ve lost a spouse
don’t like to be alone. By focusing on this niche and finding many people in need of her services,
Jill has developed a thriving practice.
5
6
http://www.cnbc.com/id/101621040
http://www.pwc.com/us/en/press-releases/2014/pwc-global-assets-under-management.jhtml
THE SHORT LIST : : NICHE MARKETING : : PAGE 3
Belief #4
These niches work as their own centers of influence.
True.
Almost without fail, doctors will tell you that their biggest influencer is
another doctor.7 That’s just one example of the way people respect the
opinion of contemporaries – people in their niche. Take the example of
Mark E. After reading a book called The Making of a Surgeon as a child,
Mark knew his calling. But by the time he got to medical school, he realized
he just wasn’t cut out for the profession and left before graduating. He
never lost his passion for surgeons, however, and continued to read trade
journals and learn about techniques and medical instruments as he started
his career in personal finance. His natural attraction to the profession meant
that he could “speak the same language” as surgeons.
75%
Nearly
of top advisors – those
earning $1 million-plus
annually – focus on
a niche.8
As part of his marketing program, Mark sends the book he loved as a
child to prospective clients. He also affiliates with hospitals near him by
sponsoring charity events and buying tables so his other clients can attend.
In an effort to expand his practice, Mark meets with surgical equipment
wholesalers and hosts webinars for surgeons’ spouses to keep them
informed. Like a group of doctors, these niches are full of people who
have great influence over others.
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http://www.horsesmouth.com/how-i-m-building-my-doctors-niche
http://www.marketingwithintegrity.com/inding-your-niche-leads-to-more-success
PAGE 4 : : THE SHORT LIST : : NICHE MARKETING
Find Your Niche,
Grow Your Business
Lawyers specialize. Doctors specialize. Accountants, too. And these professionals who specialize in a
particular field earn more than generalists.9 The same thinking applies to financial planners. Working in
a certain niche greatly enhances your ability to network, mainly because your clients will do it for you.
“When I see niche advisors who are four or five years out, they’re getting a ton of referrals,” says
Michael Kitces of Pinnacle Advisory Group, “while generalists still have to go out and start relationships
from scratch.”10
Your business is about numbers. The numbers presented here lead to only one very significant conclusion –
that you should focus on a niche when marketing your financial advisory business.
One essential niche. One immense payoff. It’s as simple as that.
Thank you for turning to The Short List for this quick read on big news.
9
10
http://www.fa-mag.com/news/target-clients-and-niche-markets-13377.html
http://www.cnbc.com/id/101938416
This publication has been prepared by National Planning Holdings, Inc. (NPH). NPH is an affiliate of Lansing, Michigan-based Jackson National Life Insurance Company®
(Jackson®) and serves as the holding company for the independent broker-dealers INVEST Financial Corporation®, Investment Centers of America, Inc., National Planning
Corporation® and SII Investments, Inc.®
This publication contains information designed to assist your practice and is provided with the understanding that neither NPH, nor its broker-dealers, provide legal,
accounting, or other tax consulting services. If legal or other expert assistance is required, the services of a competent professional should be sought. The information
contained herein is merely an overview of extremely complex areas of tax, estate planning, and ERISA law and must not be construed as providing legal, tax, or accounting
advice. This material should not be relied upon for any other particular situation without first consulting with an appropriate professional advisor.
This publication is for REGISTERED REPRESENTATIVE USE ONLY and is not meant for distribution to the public.
HMC15635 07/15
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