FP Specialization

[Peterb6086]

I am a new fee only generalist start up. .
I have been giving a lot of thought to the subject of Specilizing and which way to do it.

I am interested in the various ways people specialize and which ways are most successful :

- type of client - unions, doctors, teachers, etc

- geographic - specific local rather than entire county

- area of expertise - IRAs, estates planning, divorce

- industry - auto, steel - depending upon which factories are local



I am wondering if specialization is really a marketing ploy since I would assume a planner would talk to anyone who is referred to them.

[Bradly T.]

Peter, while it is true that most planning issues are common to most people in most circumstances, it is also true that specialization helps the advisor to develop more specific expertise most appropriate to specific people which simplifies your life and brings more value to others. It also helps you present that specialized expertise to targeted markets and centers of influence for referral and marketing. What does "fee only" mean? Are you an investment advisor or planner? Or both? Where's your interest for professional development and practice? Do you just want to know how you can make the most money or where the greatest need is?

[Lucullus]

I would not want to refer an extremely wealthy client who needs estate planning to an attorney who doesn't specialize in estate planning. Some parts of the financial advisory business are very complicated (e.g.: estate planning, qualified plan distribution planning, qualified plan design, Medicaid spend-down strategies, etc.) and a "generalist" probably cannot do the job properly - and may not know that.

I don't sell group medical expense insurance, because I don't know nearly enough about the products or the way to fit those products to a client's specific needs. But I have a guy who knows that stuff cold.

Some practitioners may believe that they can learn enough to be competent in all areas of financial planning and can keep up with development in all those areas. They may even believe that they've done all that. And that they're better off marketing themselves as advisors who "do it all".

They are welcome to the consequences of those beliefs.

[Graeme Woods]

I'm a start up as well. I'm leaning toward middle class blue and white collar African Americans, and Hispanics. I do best with professionals and with those of faith. This is my background so these are the people I understand most and can help the most. I'm also interested in veterans, and small business owners (entrepreneurs) who are like me.

I am establishing a generalist service program with a focus on Credit, Budgeting, Cash Flow (Short term planning), Retirement planning, and home ownership, and education planning. These are the services my market needs. I am prepared to do everything else but these are the service areas I am offering.

Professionally my background is in finance, international business, real estate and economics. I am an Army Veteran and am African American. I grew up a Baptist but consider myself a non denominational christian. I still, however, maintain my membership at my church. I have some law school under my belt (enough to get into trouble) and I should complete my MA in Applied Economics and Financial Markets shortly. I've been self employed since before I turned 18 and am now in my mid 30's. I am politically active in my community as a campaign supporter both with my presence and financially.

I used that profile above to determine my niche (my "core" business model). There's more but you get the point. I wish you luck.

[Peterb6086]

Graeme
Thanks very much.

So what type of marketing plan have you developed to find Middle Class prospects in your locale? How have you gotten your name out there and manage to get in front of them or to have them contact you? Are you concentrating on a particular type or field of "Professional".

I have a lot of competition in my locale, especially in Investment Management. My town is solid Middle class, however my town is wedged between two towns that are much more upscale and where most of the Planners and Investment firms have their offices. I can't compete with them in those towns - I am a solo practice and I can't afford an office there, and people in those towns would not look outside for FP (I know that since I grew up in one of those towns).



I am thinking about Specialization and I have certain areas of experetise ie spent 30 years as Trustee of corporate pension/401k plans for large bank. However, all of that experience was very impersonal as I dealt with the Corporate Finance and HR people and rarely spoke to employees.

So, I am mainly considering very small businesses - 5-10 employees- to use some of my background and interact with the employees themselves. I have not developed a marketing plan for this yet as I do not know if I want to go this route. I get more personal reward from general financial planning with the middle class people who really need my services.



It has been slow going with my marketing efforts thus far. I hand out approximately 100 brochures per week to whomever I meet, will be teaching a number of Adult Ed courses in spring, contacted all local newspapers trying to get myself known with the business columnists, last week I went door-to-door handing out 200 brochures, website is up and running, now joining several local organizations, next week I start contacting local attorneys for referral purposes.

I need to refine and focus my marketing efforts more than I have. I am not meeting enough prospects every day and this is what is causing me concern.

[Bradly T.]

No one contributes more to the American ideal than small business owners....and no one else has as many issues of risk and wealth and tax management either!! They need you most if you have the expertise. They also have cash flow, depend on professional expertise and are "dead dog" loyal to those who help them succeed!! Target them and work with the rank and file as a secondary focus. Key person, benefits, entity choice, transition, estate, taxes, insurable risk, all very exciting stuff for a planner!! Best marketing is the old meet and greet...drop by to introduce yourself, leave material, and ask for future appointment. Take good care of the gatekeepers!! Most are family operations and provide endless referrals to other like minded folks. Related professionals like CPAs and attornies and group benefit providers are excellent centers of influence for you too!! Style is secondary to impact and reputation in this market. It sounds like you have the credentials and expertise to be appealing...and small business owners are EVERYWHERE. Once you're established locally, you might be surprised how well you do in the more "upscale" communities and how little competition you will have. A very small percentage of us advisors are actually qualified to call ourselves family wealth managers, even fewer of us have business owner expertise. Remember this critical distinction...you are NOT a small business consultant, you are a small business OWNER consultant, helping transfer business success to personal wealth. It's a wonderful world!

[Graeme Woods]

So what type of marketing plan have you developed to find Middle Class prospects in your locale? How have you gotten your name out there and manage to get in front of them or to have them contact you? Are you concentrating on a particular type or field of "Professional".

My strongest route is through networking. I am approaching Church leaders. I have an in through my church and through my father who is a minister. His name is known in my community politically. He ran for Congress way back when. I also have an ongoing real estate sales business (I started planning and RIA in '04/'05 before the crash). I found that a lot of boomers and elderly have excess cash when they downsize. I have also Branded my name in the area. That is why I use my full name in these discussions.

My target audience reads the newspapers, church bulletins, christian yellow pages, and they have an online presence. I'm building a presence online for marketing and information dissemination.

The military is my easiest group in that they are looking for help, they are the hardest because pride keeps them from asking for help. I'm targeting an audience through my former unit which was disbanded and spread across the states. I have friends who are like family and who have spent time with me overseas. Military Officers and NCO's are a great target for small business owners because they have huge savings after coming back from combat and they have leadership and entreprenurial spirit.

I have a low net worth requirement because I prefer to grow with my clients and I know that in my target group investment and retirement planning has been severely neglected. I understand I may have to provide business consulting services, such as business plan development, as well.

I have stretegic alliances that I developed as a Realtor and former Commercial Mortgage Broker and Business Consultant. I hope to build a few more alliances to fill gaps. I have my brand and package I want to use palm cards (like politicians) to accompany my business cards and followup trifold brochures fro when people ask for something to read or file. I also need my product packaging (Folders/organizers for clients etc.).

My biggest difficulty is coordinating my efforts, and developing a cost and effort efficient marketing plan. Efficiency is key when you are a solo and run on a tight budget. I want to accurately track results so I don't get caught in the next down market with a mamouth marketing budget and not clue which part reallty works. I can't wait untill I can afford and assistant...

Oh yea! Realtors (Brokers and Salespersons) are all business owners with serious cashflow and savings (and retirement, health, life, budgeting...) planning issues. Wink wink. I'm very active in my local board and have had a very good reaction to my feeler statements and questions (market research).

Church, political, business, realtors, and military - Middle class/blue collar - minorities (and anyone else) - with post secondary education. My best group is 25 - 50 but my most attractive ($$$) is the boomer generation.

Love this stuff!!!

[Graeme Woods]

Decided to save both comments for my records. They're a good start (outline) for a Strategic Marketing Plan Executive Summary.

[Maria Marsala]

Peter,


Niching, target marketing, creating an ideal client profile isn't just a marketing ploy. What it does is makes a segment of the popuplation special and folks love being special. And it gives you 1 market to market to and become an expert dealing with.



Creating an ideal client takes thought, time and monitoring. What you look at are:



Technographics

DemographicsGeographics
Psychographics






I have an article here to get you started www.coachmaria.com/articles/idealclient.html