For Many Young Advisors, Niche Marketing Is the Path to Success

Let’s face it, younger advisors are at a disadvantage when it comes to attracting new clients to a firm. They generally lack the network, relationships, and experience needed to convince prospective clients to work with them. In my experience, most advisors in their 20s and 30s working at independent firms today just don’t have the killer sales instinct that is stereotypical of financial advisors of the past. Instead, they tend to prioritize servicing existing clients over marketing and business development.

Many firm owners I talk to find this frustrating. They know that for the business to grow outside of their own efforts and to eventually transition the firm to the next generation, the younger advisors must learn the skills to bring in clients on their own. 

In defense of younger advisors, their employers rarely equip them with the marketing skills and knowledge they need. They are expected to pound the pavement in the same way the firm principals did to build the business. This expectation exists even though many of those tactics aren’t as effective today; nor are they a natural marketing style for the younger advisor’s personality type. 

If you are an owner of a financial advisor firm and find yourself in a situation with less-experienced advisors you hope to groom into the future leadership of your business, you would serve them well to coach them into working with a niche.

Why a Niche?

By focusing on a narrow subset of potential clients with similar characteristics and needs, younger advisors will benefit in many ways:

1. Working with a niche directs their time and attention. It guides them in knowing the people to network with, the centers of influence to meet, the events to attend, and the content to create.

2. It gives them a way to stand out from the crowd. When advisors are asked to market as generalists, they sound like everyone else, and younger advisors don’t have the years of experience to back up their claims. Specializing in a niche makes them unique. They can offer expertise that most other financial advisors can’t claim.   

3. When a younger advisor chooses a niche appropriate for their passion and aptitude, they take ownership. They step out of the owner’s shadow and into their own light.

4. They overcome the lack of a large network because they market themselves based on expertise within a niche, not the transfer of trust from long-standing personal or professional relationships.

5. After a year or two of attaining expertise with a niche, they overcome any perceived lack of experience (as measured by years).

6. When any advisor successfully positions themselves as an expert with a niche, they stop seeing what they do as marketing and start seeing it as sharing their knowledge and wisdom. This shift can help them overcome any apprehension around sales and marketing.

7. When an advisor works with a niche, bringing in clients is more achievable. They fish in a smaller pond, which makes it easier to catch the prospects they seek.

Keys to Success

While choosing a niche can be the path to success for a young advisor, it also has to be successful for the firm. Here are some points to consider when guiding a younger advisor toward a niche focus:

1. Make sure the chosen niche can be profitable immediately or in the near term (e.g., surgical residents, employees at companies with prospective IPOs). This may require a new creative pricing model if the niche doesn’t meet your asset minimum but has the income to support minimum fees.

2. The niche cannot contradict the firm’s overall mission and messaging. For example, if your firm has positioned itself as specializing in socially responsible investing, you shouldn’t have a niche focused on Exxon employees.

3. When the advisor starts a niche, do not change your website. Build a landing page dedicated to the new niche. You can link to that page from your homepage navigation or keep the page separate from your website, depending on your confidence level for the niche’s success. The landing page allows the advisor to test out the viability of a niche without the firm taking the risk of alienating current clients or losing out on other new business.

4. Allow the younger advisor the space needed to experiment and iterate. It may take them a little while to figure out the best way to market themselves to the niche. The key is to keep them inspired and motivated to do marketing. Even if the initial niche doesn’t work out, the process will teach them the skills and habits of marketing that can be used in future efforts.

About Kristen Luke

Kristen Luke is the President of Kaleido Creative Studio, a marketing agency specializing in helping RIAs promote their businesses to a niche through an expertise approach. Over the past 15 years, Kristen has consulted with hundreds of financial advisory firms and shared her marketing expertise via industry conferences and publications nationwide.

How to Choose a Niche Market for Financial Advisors: Step 1—Understand Your Options

When advisors hear the words niche market, they often think about a specific type of person, like a business owner, widow, or pre-retiree. This is a misconception, though, because you can choose a niche market based on any of six categories: career, event, expertise, mindset/values, affinity, and demographics.

Let’s look a little closer at examples in each of those categories:

Career

Category 1, career, includes professions, employers or companies, and industries. Some examples that would fall into this category are attorneys, business owners, physicians, technology employees, health care employees, military personnel, Facebook employees, United Airlines pilots, and federal government employees.  

Event

Category 2, event, includes money-in-motion events, life transitions, and life stages. Some examples include inheritance, death of spouse, kids leaving home, job change, employer IPO, starting a family, and retiring. 

Expertise

Category 3, expertise, is a specific service, product, or solution you offer to solve a problem your niche has. Examples include special needs planning, exercising stock options, and divorce financial planning. 

Mindset and Values

Category 4, mindset and values, includes religion, life philosophies, and cultural mindsets. Examples include Christians, socially responsible investors, and philanthropists. 

Affinity

Category 5, affinity, describes common connections people share. These can be hobbies, interests, or lifestyles—for example, golfers, families who homeschool their children, RV snowbirds, and university alumni. 

Demographics

Finally, Category 6 is demographics. This can be geographic area, gender, age, or generation—for example, residents of Durango, CO, baby boomers, divorced people, and women.

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As you can see, you have many options to consider when choosing a niche market. Some niche markets you may be considering could fall into more than one category.

For example, maybe you are looking at divorcing women as a niche. This falls into the demographics category of gender and marital status. It falls into the event category because divorce is a life transition and a money-in-motion event. And finally, it falls into expertise if you have a specialty in divorce financial planning.  

Not all niches are going to be good options. For example, I generally recommend that advisors stay away from niches solely categorized by demographics, such as geographic region, generation, race, or gender. There is too much variation among these people in their financial needs.

In the next blog, I will discuss how to choose a niche that is right for you from one of the six categories.

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Five Pillars of a Financial Advisor’s Local Search Engine Optimization (SEO) Strategy

Search engine optimization (SEO) techniques are an important part of increasing your company’s visibility in search engine results such as Google. But for most financial advisory firms, unless you focus on a narrow niche, it is not essential to rank nationally in search results. It’s more important to show up in search results in your local communities.

Think of it this way: If you live in Los Angeles and search for “outdoor dining near me,” you don’t want to see results from restaurants in New York. The same is true for people who search for a “financial advisor near me.” They want to find an advisor within driving distance.

That’s where local SEO comes in. Local SEO strategies are those techniques that increase your visibility in search engine results in your local geographic area.

“Local SEO: Strategies that increase your visibility in search engine results in your local geographic area.”

While there is some overlap in traditional SEO and local SEO techniques for optimizing website content, local SEO requires a significant number of strategies not determined solely by your website.

Assumptions Made for this Article

For purposes of this article, all recommendations are directed at increasing your rankings on Google since the site accounts for 92% of the global search market share.

Some of these strategies are not technically considered local SEO in the marketing world (i.e., ads) because they don’t help your website’s long-term organic rankings. From a practical standpoint, I include ads because they show up on the first page of Google results and provide yet another opportunity for a prospect to find you in their search.

Why Should You Have a Strong Local SEO Strategy in Place? 

According to UC Davis, 92% of consumers use the internet to search for local businesses. While many advisory firms have clients spread across the country, most new prospects are within driving distance of a company’s headquarters or satellite office. This is because most firms just do not have the financial resources to make a real impact nationally.

Unless a firm has expertise with a niche that naturally attracts prospects from around the country, local marketing is still the best use of time, money, and energy. If you want to increase leads generated from your website, implementing a comprehensive local SEO strategy is crucial.

How to Improve Your Local Search Rankings

If you want to rank on the first page of Google in your local area when a prospect searches for “financial advisor near me” or “financial planner [your city],” then you need to do more than just have the right keywords on your website.

You need to address five areas to optimize your local search engine presence:

• Local pack (e.g., Google My Business)

• Advisor listings (e.g., NAPFA’s “Find an Advisor,” FeeOnlyNetwork.com)

• Review sites (e.g., Google My Business, Yelp)

• Organic rankings (e.g., website optimization)

• Paid ads (e.g., Google Search ads, Local Services ads)

The best way to understand why you need all five of these areas is to examine the first page of Google results, as shown below.

When people think of “getting on the first page of Google,” they think of organic rankings, meaning their website appears in the general search results. But if that is all you are focused on, your firm is missing out on many other opportunities to be found on the same page of search results.

Let’s take a look at all the ways a prospect may find an advisor on the first page of Google search results, starting at the top and working our way down.  

Paid Ads

In most cases, paid ads sit at the top of all search results. Google consistently shows Google Search ads and, in some markets, is testing a service called Local Services ads. Except in the rare instance when no ads target a specific search term, the only way to show up at the top of Google is through paid ads.

Local Pack

The next section of Google search results is the Local Pack. This is the map you see with three businesses listed underneath. To be listed here, your business must have a Google My Business profile. Client reviews on Google and other factors will increase the chances of your business getting listed here.

Review Sites, Organic Rankings, and Advisor Listings

The meat of the search results is what you traditionally think of as search results. They are websites that Google displays because its algorithm has determined that these sites are the answer to your search query.

This is where the search engine optimization work you do on your website comes into play. If you have optimized your site well for a specific search term, it should show up in the search results, though not necessarily on the first page.

Other websites will also appear here and not just those of your competitors. Review sites such as Yelp will often rank. Advisor listing sites will also show up—both general listings such as FeeOnlyNetwork.com or FPA PlannerSearch and paid lead services such as SmartAsset and Zoe Financial.

Having listings on some of these sites provides an opportunity for prospects to find you even when they clicked out of Google Search and onto a different link. It’s usually worthwhile to be on the sites that apply to your business and make financial sense.       

The Three Types of Markets

Today I’d like to talk about the three types of markets your firm could possibly market to. It is important for advisory firms to first identify the type of audience they want to address so that they can adopt the appropriate marketing and messaging strategy.

First, there is the mass market. This is basically serving everyone who could benefit from the service and can pay the fees. This is the marketing the large national firms do. Their service is generally undifferentiated from their competitors. Think of the advertising you see for retail services at Schwab, TD Ameritrade, and Fidelity. Because the market is so big, the message they communicate is very general to appeal to as many people as possible. It is undifferentiated from the competitors, including you. For a boutique RIA, it is very hard to compete for the mass market because you are competing against companies with huge budgets, robust in-house marketing departments, and multiple award-winning advertising agencies working for them.

The second option is a segmented market. With this approach, you take the mass market and then break it down into different segments to market to. I refer to this as the law firm approach because this is the approach large law firms take. They have an overall brand but different practice areas to serve various market segments. For example, law firms will have industry sectors such as construction, real estate, and energy, or practice areas such as family law, mergers and acquisitions, and intellectual property. Visit any large law firm website and you will see how this approach works. Segmenting is an easier marketing approach than mass marketing since it does narrow in more on who you are trying to serve. The pitfall with this approach is that many small RIAs choose five or six different segments, diluting their efforts and message. For example, I commonly see firms segment into these five segments: pre-retirees, retirees, widows, business owners, and divorcees. If you have the staff to pull it off, great! But most firms have not put in enough effort into any one of these segments to pull it off. What ends up happening is they practically end up back in the mass marketing boat trying to capture all potential clients who could benefit from their service. To successfully pull off this approach, you should have one advisor dedicated to just one segment.

Finally, there is the niche market where you basically focus all of your efforts on just one market segment. You are able to differentiate your specialty from firms that are focused on mass markets. And because you are concentrating your efforts on one market, it is a less expensive and less time-intensive way to market. If you are a firm with only one or two advisors, this is generally the best approach to take, though larger firms also benefit from a niche approach.

Now that you know the three types of markets, which one does your firm market to? Would it make sense to change your approach depending on your size, capacity, and marketing budget? If you are considering a niche market approach, I invite you to visit our website at www.kaleidocreative.com to learn more about how we help firms select and market to a niche.