Finding your perfect niche – the Water Cooler effect at work

Wednesday, February 27th, 2013

At some point, most advi­sors have been told that they should con­cen­trate their efforts on attract­ing clients in a defined niche. There are three rea­sons for this:

• You’ll build unique exper­tise in this group’s needs; as a “spe­cial­ist” in its chal­lenges, you’ll be able to deliver out­stand­ing value that gen­er­al­ists can’t match.
• Depend­ing on the group, you can build cred­i­bil­ity and pro­file by being inter­viewed in indus­try pub­li­ca­tions, writ­ing arti­cles and speak­ing at their indus­try events.
• By focus­ing on a defined niche, you become the “safe choice”   within that group and will see many more refer­rals as a result

Today’s arti­cle on how to find your per­fect niche is a follow-up to “From 0 to 100 clients in 18 months,” a guest arti­cle last month by U.S. indus­try expert Kather­ine Vessenes, which described how she attracted over 100 clients, each of whom paid an annual plan­ning fee of $1200 or more.

Vessenes’ advice on find­ing your per­fect niche is below; to read the first arti­cle on how she went from 0 to 100 fee-paying clients, click here:

The Per­fect Niche:  By Kather­ine Vessenes, JD, CFP®, RFC

When peo­ple ask me how did you man­age to bring on over 100 new clients in 18 months, in a brand new mar­ket, I tell them there were a lot of factors—but close to the top of the list is find­ing the per­fect niche.

In work­ing with multimillion-dollar advi­sors I noticed most of them had clearly defined niches. They knew who their ideal client was and they had a mar­ket­ing plan that worked for their per­fect prospect. Another thing became appar­ent to me early on—only two of the many multi-million dol­lar advi­sors we have assisted, had thought­fully and sys­tem­at­i­cally pur­sued their niche in a business-like manner!

Here is what I mean—only two advi­sors took the time and energy to think about a niche that would be a good fit, and then went about test­ing the mar­ket to see if it would work. One of them (I’ll call him Ted from Seat­tle) actu­ally tested three dif­fer­ent niches. Two were com­plete bombs until he set­tled on the one that still works for him 25 years later.

All the other advi­sors just fell into their niches. Lucky for them, they were in the right place at the right time for their tar­get group. They started work­ing with employ­ees of the local util­ity com­pany, pro­fes­sors at the U, or Boe­ing employ­ees and one good expe­ri­ence led to another—pretty soon a good por­tion of their new busi­ness came from refer­rals in their niche.

I too, tested out a num­ber of dif­fer­ent niches and learned a lot about what works and what doesn’t work:

What didn’t work for us or lessons from the trenches:

Clients who are too far from us in social class, cul­ture, edu­ca­tion and self-confidence.

One of the niches we exper­i­mented with involved mem­bers of a local Evan­gel­i­cal church in the Mid­west. The church is huge and if the niche worked, it would have kept us busy indef­i­nitely. We even had a Bib­li­cally respon­si­ble mutual fund that we thought would appeal to this group.

Even though my own spir­i­tual beliefs were not too far from this group, I was much dif­fer­ent in the other cat­e­gories: with my law degree and CFP, I had much more edu­ca­tion than the prospects did. In fact, I didn’t even know another woman out of the thou­sands of atten­dees of this church who had a doc­tor­ate degree. I didn’t hang out with this group socially and once you’ve been legal coun­sel to a for­mer US pres­i­dent and you’ve started your own busi­ness, you don’t lack in the self-confidence depart­ment, either. Or maybe it was just my sassy Texas her­itage leak­ing through.

Don’t get me wrong. These were all kind, lovely peo­ple. In fact you would prob­a­bly want your chil­dren mar­ry­ing them. There was just one problem—they were so far from my per­son­al­ity, back­ground and char­ac­ter, we just never jelled.

So you can imag­ine how mad­den­ing it was for me to watch some of the women refuse to make any deci­sions about their money, unless their hus­bands gave them the nod of approval. (Inside I am think­ing: “Honey you can do this. You are smart and edu­cated! This is the rea­son we got the vote. It is your money—you can make the decisions!”)

Even­tu­ally it became clear to me that my big Texas per­son­al­ity was just too much for the laid-back Mid­west woman. No mat­ter how much I tried to “pull it in” I was never going to fit in with this group. Short of mov­ing back to Austin, I had to admit this niche was not a good fit, cut my losses and move on.

Solu­tion:

Today we look for clients who do fit with our social class, cul­ture, edu­ca­tion and self-confidence. They are not fab­u­lously wealthy. In fact, they made their money the same way we did—by get­ting a good edu­ca­tion and then work­ing hard.

All of our clients have doc­tor­ate degrees. They actu­ally like that I have a lot of education—it means some­thing to them and they are not intim­i­dated by it. They rec­og­nize that they may be very smart in their area of exper­tise, but they know lit­tle about finances and they appre­ci­ate our expe­ri­ence and depth of knowledge.

We also seem to fit socially. Many of them will ask me to meet them for social events and I have made some deep friend­ships in a state where pre­vi­ous to open­ing the office here, I only knew two peo­ple: my daugh­ter and son-in-law.

Older clients, approach­ing retirement

Yes, I know this is heresy and many peo­ple love this as a niche—I am just say­ing it didn’t work for us.  The rea­son most advi­sors like this mar­ket is this is where the money is—these folks have accu­mu­lated more wealth, so it works out great for a busi­ness model that is based on AUM.

Older clients who are pre-retirement didn’t work for us for a cou­ple of rea­sons: first, because our mar­ket is highly edu­cated, many prospects in this cat­e­gory already had their own advi­sors and weren’t in enough pain to switch to a new one. Sec­ondly, they had no inten­tion of chang­ing their lifestyle so they could save the money they needed for retire­ment.  Typ­i­cally they were in houses that were too expen­sive for them, had high amounts of debt, or were spend­ing a for­tune putting kids through schools they couldn’t afford. In fact, most had so messed up their finances, there wasn’t enough time for me to fix them between now and their retire­ment date.

Our solu­tion:

We found we work well with younger clients who are just mov­ing into their careers. Yes, this may seem like heresy, too, because I was taught when I started in the busi­ness it was impor­tant to find clients who were between 10 years younger and 10 years older than the advi­sor. Although I refuse to put my birth cer­tifi­cate up on line, many of these clients are younger than me, a lot younger.

This actu­ally works out great—they have lots of prob­lems and lots of pain. That means there are many ways we can help them and they are very grate­ful. It also means we can help them set up a good sav­ings strat­egy now that will ben­e­fit them for their entire life. I feel like we are mak­ing a dif­fer­ence in every case.

A few of our clients have asked me how long I will be work­ing as an advisor—I tell them the truth—I will be doing this until I am 95—they will be retired long before me. The rea­son is, this is so much more fun than retire­ment, I can’t imag­ine quitting.

Folks who couldn’t save

Another niche we exper­i­mented with was col­lege funding—we looked for par­ents who wanted a cost effec­tive way to put their kids through school. Yes, this is another niche that works great for some advisors—but it didn’t for us.

One of the things we found was this group, even in the most afflu­ent sub­urbs, was really strug­gling finan­cially. They weren’t sav­ing for retire­ment and they cer­tainly didn’t have any money for col­lege fund­ing. We did some fab­u­lous and time con­sum­ing col­lege fund­ing plans—helped these guys get more finan­cial aid, changed a lot of lives and didn’t make any money. At least some stu­dents will fin­ish col­lege with a lot less debt—which makes me feel bet­ter about the work we did.

Solu­tion:

Our ideal client likes to live on less than they make. In fact many of our two-earner house­holds live on one salary and bank the rest. We find the younger the client, the more likely they will be good savers. They are not wealthy now, but if they con­tinue with our plan, they will be.

What did work for us: The Water Cooler effect at work

We found it was imper­a­tive that our clients not only worked for the same com­pany, but they were phys­i­cally sit­u­ated in the same build­ing. Being in the same build­ing turned out to be a far big­ger fac­tor than I first real­ized. I think this group eats together in the lunch­room every day and hang out in between meet­ings. Even­tu­ally they must run out of things to talk about—and that’s when our name comes up.

This is one of the key fac­tors I encour­age advi­sors to con­sider when select­ing a new niche. This worked much bet­ter for us than col­lege funding—because even though that niche had all the stu­dents attend­ing the same school, the par­ents (our prospects) worked for count­less dif­fer­ent com­pa­nies. In gen­eral, the par­ents didn’t hang out together. If they did hang out, they didn’t spend enough time for the con­ver­sa­tion to turn to finances. I sur­mised that it takes time and trust for peo­ple to start talk­ing about your services.

Another advan­tage of hav­ing them work for the same com­pany is it saves us a lot of time in get­ting up to speed on dif­fer­ent ben­e­fit plans. I can now rat­tle off the match­ing lim­its and dis­abil­ity plans of the biggest employ­ers in our niche. We have so many clients there, this infor­ma­tion comes nat­u­rally and saves us from hav­ing to rein­vent the wheel with each new client. It makes us look like the experts we are—because we know their plans back­wards and forwards.

One last com­ment about the pro­nun­ci­a­tion of the word “niche”. Being from Texas, lov­ing big hair and lots of bling, I don’t use the frou-frou pro­nun­ci­a­tion I hear from my more edu­cated friends around the coun­try. They pro­nounce the word: NEESH.

I much pre­fer NITCH—because it rhymes with itch and that is what we are try­ing to do for our clients—find the itch and then scratch it for them.

Kather­ine Vessenes, JD, CFP®, RFC, is one of the top Prac­tice Man­age­ment con­sul­tants for finan­cial advi­sors. The cre­ator of the No-Sell Sale®, she is con­sid­ered the country’s lead­ing prac­tice man­age­ment con­sul­tant on build­ing a multimillion-dollar busi­ness (Dear­born) and the country’s best known author­ity on the legal and eth­i­cal issues of finan­cial advi­sors (Bloomberg). She has her own prac­tice where she fol­lows the advice she gives other advi­sors. She can be reached at:  952−401−1045, www​.vest​men​tad​vi​sors​.com or katherine@vestmentadvisors.com

© 2013 Kather­ine Vessenes. Per­mis­sion to reprint required.

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Tags: Advice, Cfp, Challenges, Credibility, Generalists, Guest Article, Industry Expert, Industry Publications, Jd, Katherine Vessenes, Marketing Plan, Match, Multimillion Dollar, Niche, Niches, People, Profile, Referrals, Rfc, Water Cooler
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The Three Priorities That Lead to Million Dollar Production

Wednesday, August 10th, 2011

When they enter the busi­ness, many advi­sors aspire to become multi-million dol­lar pro­duc­ers. Unfor­tu­nately, few succeed.

Kather­ine Vessenes is a US based coach for top-producing advi­sors. In this guest arti­cle, she high­lights what it takes to build a multi-million dol­lar book — and the three core tasks that the most suc­cess­ful advi­sors focus on, del­e­gat­ing every­thing else to sup­port staff.

As you read this arti­cle, con­sider what it would take for you to increase your focus on the three activ­i­ties that Kather­ine Vessenes high­lights. To read more of her arti­cles or to sub­scribe to her free online newslet­ter, go to www​.vest​men​tad​vi​sors​.com

3 core tasks to advi­sors’ success

By Kather­ine Vessenes

Finan­cial advi­sors are always ask­ing how they can dra­mat­i­cally increase their busi­ness. The answers are sim­pler than you think. I tell these advi­sors they need to focus on PMC:

1. Prospect­ing

2. Meet­ing with clients

3. Clos­ing the sale

PMC focus in action

Here’s an exam­ple: A few years ago I had the amaz­ing oppor­tu­nity to work with 12 finan­cial advi­sors — each aver­ag­ing $1.2 mil­lion in fees and com­mis­sions. My mis­sion was two-fold: To see from the inside what it is like to be a million-dollar advi­sor and to test out all of the advice I had been giv­ing audi­ences for years. Did my tech­niques for build­ing trust and solid­i­fy­ing rela­tion­ships still work?

Have you ever been in a sit­u­a­tion where one-plus-one added not up to two — but to 50 instead?

That is just want hap­pened when I dusted off my Series 7 to work at Blue Bon­net Advi­sors (to pro­tect their pri­vacy, the names of the firm and its advi­sors are fic­ti­tious) — sit­ting across from investors for the first time in a decade.

Blue Bon­net had an amaz­ing rep­u­ta­tion for cre­at­ing multimillion-dollar advi­sors out of “Middle-America” investors. One advi­sor — not even 30 years old — was gen­er­at­ing more than $750,000 by the end of his sec­ond year there. What makes his story so remark­able is that he did it entirely with “B” leads — prospects with less than $75,000 to invest. His suc­cess depended on a great sales process and stick­ing to the basic for­mula: prospect for new clients, meet with clients and close the sale. That was it.

One of the secrets to Blue Bonnet’s suc­cess was that every­thing that did not qual­ify as PMC was del­e­gated to some­one other than the finan­cial advi­sor. And I do mean everything.

On my first day there, my new assis­tant handed me my cell phone. Nor­mally a new cell is a big drain on my time, caus­ing me no end of frus­tra­tion! I am extremely un-mechanical, and it can take me hours to fig­ure out the most basic func­tions of a sophis­ti­cated phone.

Every­thing was dif­fer­ent at Blue Bon­net. My assis­tant did not just hand me my phone; she also spent 10 min­utes tutor­ing me on how it works. She had even pre-programmed my husband’s and children’s phone num­bers. She took the time to set up the pass code to my voice mail and explained every­thing to me in lan­guage befit­ting a kindly kinder­garten teacher…a sim­ple thing to do, and one that saved me two full hours!

The key to multi-million dol­lar production

Many times I will ask an audi­ence to con­sider why she did this for me. The answer is the key to becom­ing a multimillion-dollar advi­sor. Spend­ing two hours try­ing to fig­ure out a new phone is not PMC. The time I would spend read­ing the instruc­tions was time much bet­ter spent meet­ing with clients, prospect­ing and clos­ing the sale. Some­one else would need to do every­thing else.

In fact, dur­ing the entire time we tested out our sys­tems and the­o­ries at Blue Bon­net, I never made a call to the hair­dresser, den­tist or doc­tor to set up a visit. Sure those calls only take five min­utes each, but mak­ing those appoint­ments was not PMC. If you add up enough of those five-minute calls — along with answer­ing voice mail and e-mail — it eas­ily turns into three or four extra hours each week — hours that should be spent in front of clients. And that can also mean gen­er­at­ing thou­sands of extra dol­lars every week!

Blue Bonnet’s sys­tem was so beau­ti­ful, so ele­gant, so suc­cess­ful, that we have used vari­a­tions of it with every client since.

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Tags: Audiences, Blue Bonnet, Building Trust, Commissions, Core Tasks, Decade, Dollar Producers, Dollar Production, Financial Advisors, Guest Article, Investors, Katherine Vessenes, Middle America, Multimillion Dollar, Pmc, Priorities, Protect Privacy, Relationships, Reputation, Series 7
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The Three Priorities That Lead to Million Dollar Production

Wednesday, June 29th, 2011

When they enter the busi­ness, many advi­sors aspire to become multi-million dol­lar pro­duc­ers. Unfor­tu­nately, few succeed.

Kather­ine Vessenes is a US based coach for top-producing advi­sors. In this guest arti­cle, she high­lights what it takes to build a multi-million dol­lar book — and the three core tasks that the most suc­cess­ful advi­sors focus on, del­e­gat­ing every­thing else to sup­port staff.

As you read this arti­cle, con­sider what it would take for you to increase your focus on the three activ­i­ties that Kather­ine Vessenes high­lights. To read more of her arti­cles or to sub­scribe to her free online newslet­ter, go to www​.vest​men​tad​vi​sors​.com

3 core tasks to advi­sors’ suc­cess
By Kather­ine Vessenes

Finan­cial advi­sors are always ask­ing how they can dra­mat­i­cally increase their busi­ness. The answers are sim­pler than you think. I tell these advi­sors they need to focus on PMC:

1. Prospect­ing

2. Meet­ing with clients

3. Clos­ing the sale

PMC focus in action

Here’s an exam­ple: A few years ago I had the amaz­ing oppor­tu­nity to work with 12 finan­cial advi­sors — each aver­ag­ing $1.2 mil­lion in fees and com­mis­sions. My mis­sion was two-fold: To see from the inside what it is like to be a million-dollar advi­sor and to test out all of the advice I had been giv­ing audi­ences for years. Did my tech­niques for build­ing trust and solid­i­fy­ing rela­tion­ships still work?

Have you ever been in a sit­u­a­tion where one-plus-one added not up to two — but to 50 instead?

That is just want hap­pened when I dusted off my Series 7 to work at Blue Bon­net Advi­sors (to pro­tect their pri­vacy, the names of the firm and its advi­sors are fic­ti­tious) — sit­ting across from investors for the first time in a decade.

Blue Bon­net had an amaz­ing rep­u­ta­tion for cre­at­ing multimillion-dollar advi­sors out of “Middle-America” investors. One advi­sor — not even 30 years old — was gen­er­at­ing more than $750,000 by the end of his sec­ond year there. What makes his story so remark­able is that he did it entirely with “B” leads — prospects with less than $75,000 to invest. His suc­cess depended on a great sales process and stick­ing to the basic for­mula: prospect for new clients, meet with clients and close the sale. That was it.

One of the secrets to Blue Bonnet’s suc­cess was that every­thing that did not qual­ify as PMC was del­e­gated to some­one other than the finan­cial advi­sor. And I do mean everything.

On my first day there, my new assis­tant handed me my cell phone. Nor­mally a new cell is a big drain on my time, caus­ing me no end of frus­tra­tion! I am extremely un-mechanical, and it can take me hours to fig­ure out the most basic func­tions of a sophis­ti­cated phone.

Every­thing was dif­fer­ent at Blue Bon­net. My assis­tant did not just hand me my phone; she also spent 10 min­utes tutor­ing me on how it works. She had even pre-programmed my husband’s and children’s phone num­bers. She took the time to set up the pass code to my voice mail and explained every­thing to me in lan­guage befit­ting a kindly kinder­garten teacher…a sim­ple thing to do, and one that saved me two full hours!

The key to multi-million dol­lar production

Many times I will ask an audi­ence to con­sider why she did this for me. The answer is the key to becom­ing a multimillion-dollar advi­sor. Spend­ing two hours try­ing to fig­ure out a new phone is not PMC. The time I would spend read­ing the instruc­tions was time much bet­ter spent meet­ing with clients, prospect­ing and clos­ing the sale. Some­one else would need to do every­thing else.

In fact, dur­ing the entire time we tested out our sys­tems and the­o­ries at Blue Bon­net, I never made a call to the hair­dresser, den­tist or doc­tor to set up a visit. Sure those calls only take five min­utes each, but mak­ing those appoint­ments was not PMC. If you add up enough of those five-minute calls — along with answer­ing voice mail and e-mail — it eas­ily turns into three or four extra hours each week — hours that should be spent in front of clients. And that can also mean gen­er­at­ing thou­sands of extra dol­lars every week!

Blue Bonnet’s sys­tem was so beau­ti­ful, so ele­gant, so suc­cess­ful, that we have used vari­a­tions of it with every client since.

In short: This sys­tem can turn a $200,000 advi­sor into a million-dollar advi­sor in about 18 months. If you are already at a mil­lion, it can get you to $3 mil­lion, $4 mil­lion — or even more in a rel­a­tively short period of time. Case in point: The woman in the office next to me had been work­ing for another firm. She had never made more than $200,000 a year. Her first year at Blue Bon­net? She made $1.3 mil­lion! All she did was stick to the sys­tem and focus on PMC.

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Tags: Audiences, Blue Bonnet, Building Trust, Commissions, Core Tasks, Decade, Dollar Producers, Dollar Production, Financial Advisors, Guest Article, Investors, Katherine Vessenes, Middle America, Multimillion Dollar, Nbsp, Pmc, Priorities, Protect Privacy, Relationships, Reputation, Series 7
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