Niche Marketing: How Financial Advisors Stand Out in a Crowded Market

As a financial advisor, it can be challenging to stand out in a crowded market. That's where niche marketing comes in. By focusing on a specific target audience or area of expertise, you can differentiate yourself from the competition and attract clients who are looking for exactly what you offer.

In this blog article, we'll explore the benefits of niche marketing for financial advisors and provide practical tips on how to identify and effectively market to your ideal niche. Whether you're just starting out or looking to revamp your marketing strategy, this guide will help you take your financial advising business to the next level.

What is Niche Marketing? 

Niche marketing is a targeted marketing approach that focuses on a specific segment of the market with unique needs, preferences, or behaviors. For example, financial advisors who specialize in retirement planning for baby boomers or socially responsible investing for millennials are engaging in niche marketing.

Niche marketing helps you stand out from the crowd of other advisors by highlighting the financial services and products best suited for that group. Niche marketing also means gearing your message to resonate with that narrow demographic to help attract new clients. 

If a financial advisor wants to target a niche group, they must understand the audience and create a marketing strategy that focuses on attracting and retaining that demographic. For example, financial advisors could target female retirees or specialize in helping small business owners strategically manage their taxes or plan for retirement. Niche marketing might include hosting special webinars or creating supportive guides that help clients within that group solve a problem they are likely to face.

How Can Financial Advisors Use Niche Marketing to Grow Their Practices? 

Not only does focusing on a niche market establish an advisor as an expert in that area, but it can also help you increase your earnings. Advisors who pick a niche earn an average of 12% more than generalists that don’t pick select groups to target.

It may seem counterintuitive at first; aren’t you alienating more people when you target with a niche approach? However, focusing your attention on a particular segment enables you to become the more obvious choice to that group.

As your reputation grows for your niche approach, you will have an easier time convincing that audience to work with you. And, once you have established your expertise, your existing niche clients will talk to their peers and colleagues, triggering a steady flow of referrals. 

Over time, you should develop a repeatable process that cuts costs, creates efficiencies, and drives growth. For more information and best practices on smart marketing, read AssetMark’sUltimate Guide to Financial Advisor Marketing. 

How Should a Financial Advisor Choose a Niche? 

Which of your clients resonate with you on a personal level? Start there.

Do you have a pilot’s license? Were you a teacher earlier in your career? Are you married to a healthcare worker or veterinarian? Do you spend your downtime gaming? Have you been through a divorce? Do you love sports or classic cars? Do you have grown children?

When you decide to focus on a specific group of people because of your personal interests or stage of life, your shared familiarity and passion will shine through. You may also find that you already know dozens of potential clients within your existing circles that fall into that niche. Work your existing network, and you’ll be prospecting in an area where you are already a known entity.

You can also choose a target market that is relevant to your local community.  If you live near Huntsville, Alabama, target NASA employees. Near Los Angeles? Focus on employees in the film industry—perhaps stuntmen or costume designers. In the Heartland? Farmers and ranchers are a great client segment to target.

One school of thought holds that the more unusual the niche you select, the higher the probability you’ll succeed due to a lack of competition to be the financial advisor for that group. If you don’t want to go in search of the obscure, identify a problem investors are looking to solve, elevate your expertise, and back into the type of person affected by the issue.

5 Examples of Niches for Financial Advisors 

There are many ways to identify niches you could target as a financial advisor. Below you'll find a list of segmentation criteria. As you go through the list, consider which resonate with you or are already a common thread in your top clients. Then consider layering the criteria to create a more fine-tuned niche. For example, choosing a mainstream gender category, such as women or men, means you'll be targeting nearly half the population, but layering that criteria with an occupation or a life event creates a more nuanced and meaningful niche, like women physicians or single dads.

Here are the five general segmentations that can help you find the right niche for your practice.

1. Occupation

Many financial advisors target specific job titles or industries, partially because they are connected to the industry and partially because it's easy to target through centers of influence, networking groups, or social platforms like LinkedIn.

Careers also create common denominators. Doctors, for example, often incur enormous student debt and need to carry proper malpractice protection that requires expertise in debt management and insurance. Business executives require assistance with stock options, deferred compensation, and other perks of their position. 

2. Age

Investors of different ages tend to have different concerns and interests. Focusing on investors who are retiring in the next decade requires knowledge of Social Security distribution options, retirement planning, account withdrawal strategies, long-term care policies, and estate planning. Mid-career clients need support with education preparation, asset allocation, financial planning, and real estate management. Younger clients tend to be more interested in choosing companies that reflect their values and want their advisors to talk to them about ESG investing options.

3. Gender

It’s long been a financial fact of life that women outlive men on average. A longer lifespan, combined with other factors—including lower rates of pay and smaller nest eggs due to time away from the workforce for caregiving—often put women in a precarious financial situation. However, McKinsey reports women are expected to control the future and aren’t a true financial advisor niche at all in terms of a narrow audience:

• Women control one-third of total U.S. household financial assets—more than $10 trillion. 
• By 2030, women in the U.S. are expected to control much of the $30 trillion in baby boomer financial assets.

Yet, not all advisors include wives and adult children in discussions when it comes to investment portfolios and wealth management. If you aren’t targeting this audience, you might stand to lose accounts when the estate and assets transition to someone unfamiliar with your practice. This can especially be an issue for high-net-worth (HNW) clients.

4. Interest

From fishing to science fiction, vintage automobiles, and rare coins, people often hold things in common based on their interests and past times. And social media has provided a forum for aficionados to gather and share their passions on an even deeper level. Joining or creating a group is a surefire means to connect with these potential clients, especially if you share those interests. You can also attend shows or host events that center around these interests to help draw more new prospects into your circle.

5. Life Event

Many life transitions are impactful, requiring the knowledge and guidance of a financial professional to ensure everyone’s interests are protected. Whether it’s marriage, divorce, birth, death, retirement, or something else, major experiences draw people into similar stages in life. Being the acknowledged expert to consult for financial advice in the wake of a specific life event is a business builder and a way to support current clients during important milestones.

4 Ways Financial Advisors Can Incorporate Niche Marketing into Their Marketing Plans

Are you ready to target selected groups and their unique needs? Here are four ways you can appeal to your niche audience.

1. Identify Centers of Influence (COIs)

Your Centers of Influence (COIs) are a great source for client referrals, whether they are recommending their own clients or their peers! Local professionals you work with have associates and colleagues that might be looking for financial guidance as well. Your COIs have a front-row seat to see what you offer on a regular basis and can help you target your niche audience to build up that reputation.

2. Post on Social Media

LinkedIn, Twitter, and Facebook are just a few examples of platforms where people can engage in discussions around shared interests and contain millions of prospective clients. The growth of social media has opened up a broad and deep avenue of engagement.

Join or create a group targeting your niche audience and post items of interest. Share accolades you have received and engage with other members to generate interest in yourself and your business. Don’t just share business-centric content—curate content related to your shared interests to give your members interesting information that matters to them and is relatable. 

3. Appear as a Guest on Podcasts

Participate as a guest in podcasts to reach new audiences. This can help you build your credibility and gain exposure to potential clients who may not be familiar with your brand. By incorporating podcasts into their marketing plans, financial advisors who cater to a niche audience can build their brand, connect with their target market, and position themselves as thought leaders in their industry.

4. Try Community-Based Marketing

Build a community around your niche or participate in the existing community for that group. Pursuing community-based marketing helps you get in front of clients and prospects. Whether it’s supporting the local gardening club or the volunteer fire department, there are pockets of potential clients right in your own neighborhood who are already sorted by interest. Support groups that attract the type of client you are looking to work with to get a head start on engaging your ideal client.

Keep Growing with AssetMark

Your marketing efforts today are largely responsible for your business growth tomorrow. The time you put into developing your brand will pay off when you build a loyal client base and a steady stream of incoming prospects.

There are many components to a comprehensive marketing plan, and yours can be as elaborate or simplistic as you wish. Devoting time and energy to telling your story is important in today’s increasingly competitive marketplace. Finding your niche can be the key to building the business you’ve always wanted and setting yourself apart from other advisory firms as a top financial advisor.

For additional information on some marketing “don’ts,” check out AssetMark’s Financial Advisor Marketing Mistakes.

If you want help with building your business plan or developing a particular niche marketing strategy, AssetMark can help. Talk to one of our business consultants today to learn more about the many ways we can help you scale effectively.