Identifying a Niche Market

Many in the investment advisory sector think that marketing themselves and their brand to the widest possible audience is the path to success. In 2005, consultants and authors Mark Tibergien and Rebecca Pomering identified eight different strategies a financial planning practice could use to grow and to differentiate itself from the competition.

Identifying Niche Market

Identifying a Niche Market

Their work, conducted in conjunction with Moss Adams LLP, found most advisory firms to be generalists. At the same time, one Moss Adams study revealed “niche market firms” as the most popular growth strategy among the eight differentiators, accounting for 25 percent of growth strategies deployed by advisory firms.

Serving a niche allows independent financial advisors to focus on meeting the needs of a smaller group of customers without compromising their chance to increase the appeal to a broader market. Niche market firms focus on a particular client group – for example, women, divorcees, a targeted association or international professionals. Identifying and building a niche market takes a lot of work and time. Successful financial advisors who identify and service niche markets share a common trait: a deep understanding of their customers and their customers’ needs. And they commit to staying engaged with those customers on a regular basis by producing quality, innovative products and services through various avenues that not just focus on winning the business but provide an education.

For example, we found one financial advisor that proactively addresses the unique financial needs of women by providing opportunities through various events for women to network and expand their understanding of the investment process. The group hosts various educational and social events for clients, their guests and qualified local residents. A past event, for example, included a Valentine’s Day event with famed jewelry artist David Yurman.

If you haven’t identified niche markets in your practice, you may want to consider doing so. After all, a clearly defined market strategy, aimed at a specific demographic, allows you to create a more compelling message than a competitor who is positioned as a generalist.

According to Investment News, having a target-specific practice is not only one of the best ways to build your firm, but being an expert in your target niche will benefit your clients. So whether you refer to it as niche marketing, niche mining, niche pioneering, targeting or specialization, one of the best ways to build your practice is by directing your acquisition strategy, and your advising focus, squarely at a viable niche (or, depending on your geography, possibly two or three). This means finding a niche that:

• Is a true sub-segment of the general market (or the pre-general market, if their assets are currently unavailable)

• Shares common needs and interests (e.g., members of a company or industry with a dedicated pension or defined-contribution plan)

• Is reasonably plentiful (a large company, or an entire sector of an industry that is specific to your region or otherwise geographically desirable)

• Is largely ignored by the competition, ideally because it has barriers to entry

To stay competitive means identifying niche markets and really understanding who the audience is. This opens the minds of your networking partners and makes referrals easier.

For more information on Summit Brokerage Services, an independent broker-dealer, visit or contact us at (800) 354-5528.


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