Albeit from 2013, there are some cold truths still relevant today in this excellent post from Michael Kitces, not least of which is that being a Financial Planner is no longer a differentiator.
Having a niche focus in your business does indeed seem to be the way to go, but perhaps highlighting Michael's point, many financial advisers in the UK actually appear to be less niched than they were several years ago.
Going back to the 1980s, almost every 'IFA' I met told me that they specialised in a particular marketplace or occupation - doctors, police, local authority employees, sports people and so on. This became less so in the 1990s, though at that time I could see that many advisers had a strong focus on the corporate market - advising mostly on group pensions, key man cover, and partnership protection.
Today when I ask an adviser what a typical client looks like, it is rare to get the same clear focus on one particular segment - though, if you can call it a niche - "high net worth" is often cited.
High net worth might once have been a niche and conjured up a certain image of what such a person might look like, but that person today is increasingly changing. I know of several entrepreneurs who would fit in the high net worth bracket, yet they are in their late twenties and thirties - a very different kettle of fish from a financial planning standpoint requiring different niche skills.
As a side point, a glance through many financial advisers' websites suggests to many that they all do exactly the same thing and have nothing to differentiate themselves from one another. In fact it is startling how similar financial advisers' websites can be.
We all know that the value of high quality face to face financial planning is immense, but we are at a pivotal moment in how consumers find, assess, choose and refer service providers. That journey almost always starts online and if advisers and planners are doing little to make themselves irresistible, then a robot may yet be a more appealing proposition if you can't find an adviser who appears to be calling to you and your specific needs.
We work closely with financial planners to help them to differentiate themselves online, and run regular workshops. We guide and teach them on how Social Media can support that differentiation, with a wealth of proven tools and techniques.
For example, our workshops highlight the process that one financial planner uses to attract business worth £100,000 in fees each year - just from using LinkedIn. He has a niche and he follows a process on LinkedIn which ensures that his niche market can see him because he has no desire to be the needle in the haystack.
Our next workshop is in London on 10th January 2017 - learn more about how we can help you to differentiate yourself here.
For the advisor who’s starting a practice from scratch, the natural implication of this evolution is to recognize that, from the outset, starting to craft a niche is probably a very good idea going forward. No, that doesn’t mean the new practitioner has to turn down every prospective client who doesn’t fit the niche as they try to build their business; when starting out, any new client and business revenue is often crucial.