Niche Marketing: Focus to Increase AUM

In recent years, the commoditization of investment advice has forced an increasing number of financial advisors into offering more comprehensive financial planning as a way to add more value to the client relationship. As a result, the financial planning space is becoming much more crowded, making it difficult for financial advisors to stand out. That is why financial advisors should consider establishing a niche to more quickly build their businesses, focusing on a more targeted market they can dominate rather than a broader market they can vanish in. The key to differentiation in a crowded field is to become more focused and specialized to become recognized as the best-of-breed for a specific type of clientele that can be served profitably and effectively.

Successfully crafting a niche is not without its challenges and most advisors avoid attempting it for fear of narrowing their field of prospects. However, any advisor who has found success in a niche will tell you that, while you may narrow your field of prospects, you increase the likelihood that a higher percentage of prospects in the niche will choose to do business with you.

That has been the experience of David Rae, CFP™, AIF™, an independent financial advisor in Los Angeles, who has carved out a unique niche – individuals, couples and families in the LBGT community. According to David, who is also a member of the LBGT community, it is largely underserved by “focused” financial advisors, which presents him with substantial upside potential. “Although there is no shortage of high end financial advisors in LA, there’s not enough advisors who understand the specific needs of the LBGT community.”

Specifically, David sees into the wallets of long term couples who never merged their finances. Lack of marriage equality prior to 2015 meant many people in the LGBT community never got serious about money. “Even just a few years less of compounding interest can have disastrous effects on a couple’s finances.”

David has increased his assets under management by an impressive 40 percent, to $50 million, since he went independent in June 2017.

Finding the Right Niche

The first challenge for financial advisors is being able to identify a niche they can confidently pursue – one in which they can effectively differentiate themselves as an advisor with the special skills, understanding or affinity needed to serve that particular niche. David admits that his niche was obvious and that things lined up well for him. His advice to advisors looking for a niche is to “consider groups of people who can relate to you when you’re being yourself. You can build a niche around your passion or whatever it is you like to do. That allows you to put your personality into it and attract people who share the same interest.”

Using Digital Assets

The second challenge is building a credible presence in that niche – one that establishes you as an authority with recognized value to offer. At a minimum, that requires that you have a digital marketing apparatus in place that includes a quality website and an email marketing component. It’s nearly impossible to establish legitimacy in any market without a quality website and email marketing is still a cost-effective way to cultivate prospects and clients.

Building Authority and Visibility

David has deployed both, but he insists that it is his blog that creates the opportunities to engage with his market and drive people to his website. David says his blog has been the key element in growing his firm. “You really need to blog at least once a month. Once a week is better because, the more you do it the more success you’ll have.” For David, his blogging is a way to attract the type of clients he wants because he can tailor his content for his ideal client. He said it is especially effective if you are trying to attract millennials because younger clients are always searching for a good financial blog. “It’s also a way to communicate with my clients and continue to provide value.”

If writing is not your thing, David said it is well worth it to hire a writer who can provide weekly or monthly blog posts. He likes composing his own blog posts because it helps to keep him on his toes and to stay current with issues. He says it doesn’t have to be time consuming and, what time it does take, he can control and schedule around other activities.

Blogs with high quality content is the key to establishing yourself as an authority in your market, but David also tries to inject his personality into his blog by adding humor and trying to keep it light. Through all of his marketing efforts, David feels it is important to come off as “approachable.”

Making the Most of Media

David has added one additional component which he says has been fueling the success of his other marketing efforts, and that is media appearances. If you watch Fox and Friends, NBC or Bravo, there is a chance you may have seen David. In fact, he had just finished an appearance on the Today Show prior to interviewing for this article. While these appearances on national broadcasts are certainly impressive, David says he has more direct success from his appearances on the local stations which are more likely to be viewed by his local target market.

David realizes that media appearances are not practical for many advisors. He just happens to live in one of the largest communications and media hubs in the world. But, he insists that any advisor can reach out and build relationships with local media, including local news and radio shows to the extent they could be invited for an appearance. Getting quoted in local papers and magazines is nearly as good as an appearance because you can point to them from your blog or website. One day a Vogue reporter caught David’s blog and called him for a quote. “Anything you can do to increase your credibility and stature will enhance all of your marketing efforts.” The idea, David suggests, is to “put yourself out there in the media and on your blog.”

Related: How to Allocate Your Budget for Growth in Three Steps

Putting it all Together

David is quick to point out that, without the other components of his digital marketing apparatus – his website, email marketing and blog – the TV appearances alone would not create nearly the amount of business he now generates. His media appearances increase his visibility and add credibility to his other marketing efforts. His video spots point people to his blog where they can get more information. His email marketing point people to his video spots and both of those components point people to his website where they can respond to a call to action.

As a result of all his components working in concert, he gets calls, click-throughs or emails from 10 qualified prospects each week. Nearly 100 percent of his new business comes from these activities.

David says he is approaching a crossroads with his firm where he will need to decide if he wants to grow his firm with additional planners around him or build it out as a smaller boutique. He’s growing his AUM fast enough to consider the former, but he also enjoys being the perfect fit for the clients he wants to serve.