It’s an incredible time to be a financial advisor. The current demographic shift means today there are more people than ever needing an advisor’s help to get their financial lives in order.
However, to capture new business and accelerate your growth, you must recognize that new prospecting approaches are necessary. Whether you are a brand new financial advisor or have decades of experience, developing a target market can radically change your growth trajectory.
Consolidated Planning partners with the Weylman Center to train advisors to become the trusted advisor in their target market. We’ve helped dozens of advisors develop highly specialized financial planning practices within these markets using a proven process to identify a target market, cultivate relationships, and close business.
This article will define target markets and why they are valuable to financial advisors. We’ll teach you how to find your target market and give you the steps to becoming the go-to resource for your target market.
What Is A Financial Advisor’s Target Market?
Let’s start by defining a target market. A target or niche market is a specific group of individuals closely aligned by their occupation, recreation, or interests. Specialty dentists are an example of an occupation-based niche, while the Carolinas Region Porsche Car Club of America is an example of a recreation or interest-based market.
The members of a target market share some type of connection. The more defined the target market is, the more connected its members are. For example, dentists could be considered a target market. However, this market is very large and includes a number of specialties and subspecialties.
All dentists have commonalities but likely not as much as a specialized dentist, like an orthodontist has with another orthodontist. Orthodontists are a more clearly defined target market than simply dentists.
A target market should have at least 250 members in order to be a sustainable source of prospects for your practice. Conversely, a target market must also not be too large.
Why Do Financial Advisors Develop Target Markets?
Financial advisors develop target markets to more effectively communicate their value and implement strategies to elevate their client experience. Today’s affluent market requires a tailored value proposition and specialized client experience.
A recent survey conducted by the Weylman Center found that 87% of affluent individuals belong to an organization or network that supports what they do for a living, recreation, or interests. More importantly, 71% of those individuals want to work with an advisor in their network.
Affluent individuals want to work with an advisor in their network because they want someone who knows:
- who they are,
- what they want,
- what they need.
When a prospect discovers that you know and care about these three things, then they have the curiosity and confidence to engage with you.
How Do Financial Advisors Pick A Target Market?
As we’ve seen, becoming the trusted advisor in your target market is critical to serving affluent clients. But how do you pick the right target market for you?
Start by uncovering hidden markets within your existing client base and natural network. Call you 10-12 best clients (or prospects if you are a new advisor) and ask them two questions:
- What SPECIFIC groups, social clubs, industry associations or networks are you a member of currently?
- Ask about the SPECIFIC people they interact with most frequently through work or their industry.
Then, identify the organizations and networks that support your best clients and prospects. Research the organizations to determine the best fit for you by using the following questions as a guide:
- Can you join the group to show your commitment and engage with prospects?
- Do you have an affinity for the organization so you can position yourself as a resource versus a salesperson?
- Does it meet regularly enough for you to build relationships?
- Do the members fit your ideal client profile in an economically viable way?
- Is the size of the organization large enough to be sustainable?
After analyzing and selecting the best market for you, get actively involved in the organization. Meet with the executive director and look for opportunities to assist them and their members. Join a committee and volunteer at events.
Remember, becoming the trusted advisor in your target market means developing trust with your prospects. Pay attention and act on the little things to demonstrate your thoughtfulness and understanding. Be committed because you want to help, not because you want the business. When you engage for the right reasons, the business will follow.
What Will Finding A Target Market Do For My financial Practice?
Finding a target market and becoming the trusted advisor in that space will elevate your practice service model and deepen your client relationships. Instead of aimlessly marketing to the masses, you’ll have a clear marketing vision to execute.
As the go-to advisor for your target market, you’ll have a laser focus that enables you to serve clients in a relevant, thoughtful, and empathetic manner thanks to your unique understanding of your clients. Instead of pushing products or services, you’ll develop relationships by focusing on what matters to your prospects. An established target market will feed your practice with interested and qualified prospects for years.
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