Diversification May Be a Wise Investment Practice, But It's Lousy for Your Financial Advisor Marketing
From the time you entered into the financial services, you've been told that diversification is good. And you can see the evidence with the explosion of mutual fund investing and the public's desire for and financial professionals' advice for diversified portfolios. But the same concept in your own business will result in your working more hours, enjoying your work less, being less effective, and never being able to streamline your business. With financial advisor marketing, the "winning formula" is just the opposite of diversification: focus for the best results.
Remember the conglomerates of the 60's? They're gone. Just look at what happens when large firms fail to focus--AT&T acquires NCR to get into the computer business and loses a bundle. Kodak acquires Sterling Drug and spins it back to its shareholders six years later. Firms that focus on one business and do it very well have replaced the diversified conglomerates. Look at the corporate leaders of today and how they focus--Microsoft in consumer software, Cisco in Internet connectivity, and Intel in chip manufacturing, Apple in consumer electronics, etc. Each of these firms has a narrow and focused strategy in one industry.
You want to do the same. The winning strategy in financial advisor marketing is to master a niche
Key for the New Economy: Specialize
How do these historical examples translate into advice for your business? Pick a market in which to specialize and focus your entire business on that market. Be fanatical about your Financial Advisor marketing niche.
Here's my own practice, as an example. I work with people age 60 and over. When my clients ask me to help their 40-year-old children with their finances, I politely refuse and refer them to another planner. Yes, you may think I'm crazy to turn down business, but you'll see in a minute how much sense this makes.
By specializing in a particular niche, you get to understand how their mentality works -- so well that you know what your prospects are thinking before they think it! I work all day with a segment of people who are concerned about protecting their assets. My expertise is built around that concern--the way I design investment portfolios, the approach I take in my appointments, how often I am in contact, and the products and services I offer.
My office is in the suburbs, where my prospects live. I am in a small office building with plenty of parking in the front. My office is on a well-known street and is easy to find. The location was picked to match my prospects' ease and comforts. The children of my prospects would probably find me more conveniently located downtown and would be more impressed if I were in a high-rise office building with fancy wood on the walls. I cannot find a location that would be optimal for two different audiences. I cannot serve two masters optimally.
If I were to consult with a 40-year-old, he may want me to recommend some good aggressive growth funds for investment. Or he might want to know how to handle his stock options. I have no idea! That's not my business, and it would be an incredibly inefficient use of my time to learn about products and services outside of my specialty.
If I start working with people outside of my selected niche, I will soon be working more hours to become more expert in other areas, I will need to keep track of more products and develop a presentation for other services. I'd be working more hours, would maybe need more staff, and would probably earn less money. I would be far less efficient. The success in the financial services marketing and practice management is to use the same approach and same building blocks for every client.
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