How to Narrow Down Your Niche

“How narrow does my niche need to be?” is a question I frequently hear when assisting financial advisors in selecting a niche. The answer? A niche should be specific enough that other financial advisors don’t widely cater to it.

While many advisors focusing on a niche begin with a broad idea of the clients they wish to serve, they often have room to narrow it down. Narrowing down the niche can make it easier to stand out, develop more tailored services, increase client satisfaction, and lead to improved marketing results.

Defining a Niche: Beyond Broad Categories

It’s a common misconception among advisors that broad categories like “women,” “business owners,” and “pre-retirees” are niches. In reality, these categories are too broad and diverse to be niches.

A genuine niche targets a group with shared characteristics and a specific problem the advisor can address. By choosing a broad category, you risk trying to solve multiple issues that may not align with your expertise. The goal is to concentrate on serving only the most ideal clients.

Case Studies: From Broad to Niche

Here are some examples of advisors I’ve worked with, illustrating the shift from a broad category to a specific niche:

• Advisor 1: From “women” to “female caretakers of elderly individuals,” particularly daughters managing their parents’ finances.
• Advisor 2: From “business owners” to “micro business owners (with 1-5 employees),” particularly those in their 30s and 40s, primarily using SEP-IRAs and SIMPLE 401(k)s for retirement savings.
• Advisor 3: From “pre-retirees” to “pre-retirees with complex pension and benefits plans,” specifically employed at large, regionally located corporations.
• Advisor 4: From “business owners” to “family-owned businesses preparing for generational transitions,” especially those transitioning management and ownership to their kids in the next five to 10 years.
• Advisor 5: From “CPAs” to “CPAs working in non-tax-related accounting positions,” especially those who believe they should be more financially knowledgeable than they are and seek a trusted advisor outside their professional network.

Each of these advisors was able to take a broad category and carve out a more narrowly defined niche they were uniquely equipped to serve.

Strategies for Narrowing Your Niche

When helping advisors refine their target market, I encourage them to consider factors unique to them. Here are some ways to re-evaluate your broad category:

• Connection: Do you have a personal link to the niche? For instance, Advisor 1 had firsthand experience caring for her elderly parent, and Advisor 4 had taken over a family business.
• Approach: Do you have a unique financial or investment strategy that would attract a certain client type? For example, Advisor 4 wanted to integrate financial life planning and exit planning.
• Fee structure: Does your pricing model appeal to a specific type of client? For instance, Advisor 5’s fixed-fee services appeal more to CPAs than an AUM model.
• Personality: Do you have traits that resonate with particular groups? For example, a detail-oriented person might be attractive to engineers.

Narrowing your niche isn’t about limiting your potential but about refining your focus to deliver more impactful marketing and client service. With clarity and specificity, you not only address your clients’ unique needs more effectively but also distinguish yourself in a crowded market.

About Kristen Luke

Kristen Luke is the author of Amazon Best Selling Book Uncomparable: The Financial Advisor’s Guide to Standing Out Through Niche Marketing. Eligible advisors can request a free copy at OnNiche.com/book.?

She is also the president of Kaleido Creative Studio, a marketing consulting firm specializing in helping Registered Investment Advisors develop niche-based marketing strategies through their OnNiche? process. For more information, visit OnNiche.com.