Speaking on a recent episode of the Challenge the Standard in Financial Advice podcast, co-hosts Nathan Fradley and Jordan Vaka said there can be both benefits to finding your niche as an adviser as well as anxiety.
According to Vaka, an important part of choosing the right niche is understanding that “it’s not what we do, it’s who we do it for”.
“Here are my 10 most favourite clients, not the most profitable, but my most preferred clients, that when the phone rings I smile. They were all divorced women in their 50s and 60s,” Vaka said.
“It took me time to realise that the niche I want to work in, where I want to spend the rest of my career, is helping people in that 50–65-year-old bracket, financially inexperienced, nervous about making mistakes, going through a big transition.
“The nature of the transition, as any adviser knows … doesn’t make a huge difference to what you’re doing because you’re still holding their hand through something that’s really difficult.
“It took me time to realise that but I’m really glad that I did it because I know for certain that if I hadn’t made that change, I wouldn’t be giving advice now.
“I’m a big advocate for this idea of niching and I think that it’s a really powerful way to increase the value you’re delivering to the people that you choose to serve.”
When speaking on the way niching and specialisation has been approached in the past, the pair noted the fear that can be associated with self-inflicted client scarcity.
“Historically, it’s been specialisations. This mindset of, ‘I do SMSF, or I do insurance, or I do super, or I work with business owners’,” Fradley said.
Vaka added: “Back when people were saying, ‘I just do insurance, I just deal with business owners’, every other adviser was a generalist. And they were all scared of niching because you would be limiting your audience.
“The fear that I had was, by focusing on a niche like this, instead of having 18 million Australians I can talk to, I think, there’s 50,000 divorces a year in Australia.
“So I’ve just narrowed down the number of people I can talk to, but you’re also talking to them about things that are a lot deeper so you’re bringing a great deal more value.”
They added that working as an adviser within an institution developed a mindset of never turning away a client.
“You kind of convince yourself that you should keep doing this work for everybody because you’re doing it in the public’s interest but ultimately, what you end up doing is a whole bunch of work across a whole bunch of different areas that’s really inefficient and causing you a heap of stress,” Vaka said.
“You’re dealing with 3, 4, 500 people and something has to give, and normally from what I’ve seen historically, it’s the planner that comes last in every scenario like that.”
According to Fradley, niching can also help strengthen the relationship between advisers and clients.
“I don’t think we need to get to the stage where every planner picks a single type of thing and just gives advice on that. I don’t think advice is that broad,” he said.
“The kind of people you work with can narrow down as opposed to your skill sets and then what you’re becoming a specialist at is solving the problems for the people you really like working with.
“You’ve got the experience with a certain group of people, from repetition you know the kinds of things to expect, you know the kinds of behaviours, you know the kinds of challenges, you bring more value because you know more specifically about people like them.”
He said that specialising within the industry allows you to speak from experience and say to a client, “I hear you, I understand you, I’ve seen your problem before and I’ve solved it before and I can solve it for you.”
