Most financial planning firms are still too generalist in nature but they must start thinking like specialists

    I’ve written about this extensively, but it’s worth repeating. To run a successful business you have to know: 

    1. Who you work with
    2. What they want
    3. How to deliver it to them

    Most financial planning firms are still too generalist in nature. Why?

    I believe it’s because they’re scared to go niche. If they’re not generating enough business with their current open-door approach, they struggle to see how being selective will improve that situation. In my experience, however, it will. 

    The problem with being a generalist is that you don’t appeal strongly to anyone. Look at most advisers’ websites and tell me, who do they work with? In most cases you’ll have no clue and they will look like a carbon copy of every other financial adviser.

    How do you overcome this?

    The easiest way to find your niche is to look at your existing client data. All businesses have a niche, whether they recognise it or not. Analysis of your existing client data will reveal it, which is why whenever I start a new consulting job, it’s one of the first things I work through. Start by looking at your top five or ten clients. Typically, these provide an excellent snapshot of who your target clients are and helps you answer Point 1: Who you work with.

    Embrace your target market

    After examining your existing client data, you will find you already have a target market or two. Yes, you may have some exceptions, but if you look closely at who you predominantly work with, who you enjoy working with and who generates most of your business income, you’ll find you’ve already specialised to some extent. This is not an accident; you attract these people because of who you are, what you know and your lifetime of experiences. My advice to all my clients is to embrace the fact you have these target markets and narrow your focus even further. In a small business (and even most large advisory firms are still small businesses), the best strategy for long-run happiness and profitability is to focus on what you do best.

    How this works

    Here’s an example of how having a target market works. You analyse your data and realise that senior business executives are a core group of valuable and fun clients for you. As a next step, you and your team take some time to consider the top five issues facing your senior executives and come up with the following list:

    1. Career management

    • What happens if I get made redundant?
    • How do I maximise my career path and earnings in the lead up to retirement (or semi-retirement)?

    2. How much is enough?

    • What does ‘retirement’ mean anyway?
    • Will I end up consulting or doing some ‘fun’ work as a transition step?

    3. Tax issues

          [endif]Including share options at work

          [endif]Taking bonuses tax effectively

    4. Simplifying finances

          Getting organised

          Making smarter investment decisions

         Making my money work harder

    5. Family issues

    • Helping my kids with property and education funding
    • Looking after my ageing parents
    • Wills, IHT etc

    Taking time to consider your target markets’ issues helps you answer Point 2: What they want.

    How this helps

    The advantages to gaining a deeper insight on your existing client data are many:

    1. You can focus all your marketing energies on finding more of your target clients.
    2. You can develop a proposition that specifically addresses your niche’s key issues and concerns.
    3. You can hire staff that have knowledge of the issues affecting your niche.
    4. You can build all your systems and processes around serving your niche in the way they want to be serviced. You don’t have to flex to accommodate non-target clients.
    5. You can begin to say ‘no’ to other clients who, although appealing on the surface, will end up tying your systems and processes in knots as you try to grow. This is one reason why so many firms are stuck at a turnover of between £250,000 and £750,000 p.a.

    Getting these things right lets you answer, in a comprehensive manner,

     Point 3: How to deliver it to them.

    Clients don’t think in product classes

    You’ll notice that ‘pensions’, ‘insurance’, ‘protection’, ‘mortgages’, ‘managed investments’, ‘unit trusts’, ‘collectives’ and other industry jargon doesn’t feature in the clients’ top five issues. They’re concerned about their real-life challenges. So don’t talk product classes and industry jargon in your marketing and communications.

    Talk to the client in their language about their issues

    Does your proposition to clients actually address their top five issues and concerns? I know this seems blindingly obvious, but where is it happening? I don’t come across many advisory firms who are doing this well.

    Does your range of services show how you can resolve these issues?

    Incredibly, for most advisers the answer is ‘no’. I realise that clients do walk in the door to ‘get jobs done’, for example, moving a pension out of an employer pension scheme, or topping up some life cover. However, nobody actually wants to buy a pension, investment or insurance product. What they’re looking for is an outcome. They want to feel safe and secure; to be able to live the life they have always dreamed of; to take care of their family and to feel fulfilled and alive. By all means allow people to come in so you can take a look at ‘the job they need doing’, but please ask questions that allow the client to see that the issue is far larger than just this ‘job’. You are the expert and it’s your skills in this area that will deliver higher value outcomes for clients and improve your business.

    The benefits

    By putting together a client proposition that addresses the client’s needs more completely, you pick up clients. This happens for two reasons:

    • Clients look at your service and think: “Lead me to the promised land. Finally a financial adviser that deals with the things that have been on my mind.” (Rather than appearing to simply flog financial products).
    • You really start to believe you have something fantastic to offer people and it comes through in every conversation you have.

    Don’t let these three important steps in building a great business pass you by. If you haven’t got them absolutely nailed, you can flounder around for years wondering why things are not happening for you.

    Remember: think specialist, not generalist.

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