The practice management advice is almost ubiquitous - if you run a financial planning practice, you should eventually carve out a specialized niche for yourself. If you don't already have one, look through your book of clients for similarities, and use that common thread to expand on a niche you might have unwittingly already started. The ultimate goal: to have carved out some unique space for yourself, whether that's financial planning for fly-fisherman, working with public school teachers, or having a specialized skillset for doctors running a medical practice. Yet in reality, many (most?) planners seem to resist this advice; "if I specialize, don't I leave a whole lot of other business on the table?" is the most common objection. But focusing on the clients you won't get by specializing completely misses the point - which is significant increase in referrals you can generate by clearly defining a niche and conveying it to the clients and affiliated professionals who might refer you.

The inspiration for today's blog post comes from a recent interaction I had with a to-be-unnamed financial services professional I recently had a conversation with. I think very highly of this individual's work; he has a very wide and deep knowledge pool regarding insurance, and I actually wanted to proactively recommend him to some other financial planners I know. There was just one problem: notwithstanding the fact that he had some specialized knowledge of life insurance, he still didn't actually serve a specialized niche.

As he explained it, "it's difficult to describe what I do and how I work with people, because there are so many variations depending on exactly what my client needs, that my services ultimately are customized for each of my clients." Sound familiar? Although I was talking to him about his business serving the needs of other financial planners, I could have easily been talking to a financial planner about their business and how they serve their (consumer) clients.

It was a very problematic outcome. I wanted to refer him, but I couldn't. I didn't know what kinds of firms were the best fit for him. I wanted to seek out opportunities for him to be brought into a situation where his business model would be an appropriate fit, but I couldn't describe what he did to anyone I wanted to refer him to. I wanted to identify situations where his expertise might be an especially good fit, but his description of his knowledge and services was so broad I still wasn't certain exactly when it was right to refer him.

Of course, I could just try to refer him any time I hear someone mention "life insurance", but realistically I know his business isn't that broad. He can't actually serve everyone, all the time, in any situation. I'm sure that in the end, there's some business he says "Yes" to, and some he says "No" to. But since he couldn't describe it to me, and I don't want to refer him as a solution only to have my referral sources get turned away, the net result is... I just couldn't give him any referrals, even though I wanted to!

And this is the essence of why having a niche is important. It's not necessarily about developing such specialized knowledge in a particular niche that no one else can match your expertise. In point of fact, my friend already had this part mastered. It's about having an easily defined niche so that those who would refer you will be able to easily match you to situations where you are appropriate. In other words, it's not about being focused in the niche, per se; it's about making you more referrable by having a niche that your referral sources can use to describe and refer you! Or viewed another way, doing everything for everyone doesn't make you interesting [or referrable] to anyone!

Again, although this situation happened to occur in the context of a professional who provides advisory services to other financial planning firms, I think it is entirely analogous to what financial planning firms go through in trying to acquire their own clients. When you ask your existing clients to refer you, or your affiliated professional relationships - can they easily and concisely describe who you are, what you do, how you serve clients, and match you to their family, friends, and acquaintances who would be the best fit for you? If you have a clearly defined niche where everyone understands your target client, what they do, what their needs are, and how you serve them, the answer is probably yes. However, if you are the typical financial planner, who "does everything for everyone, customized to the client's individual needs," you are probably making the job far more difficult for your referrers than you realize.

So what do you think? Have you ever experienced this challenge when trying to refer another professional you know? Do you think your clients and other referral sources face this same challenge when trying to refer you? 

  • Susan Weiner, CFA

    I have a similar problem with writers who are generalists. When someone asks me to recommend a writer, I’ll go with the specialist first. Also, lack of specialty means the writer doesn’t stand out in my mind.

  • Dr. David Edward Marcinko FACFAS MBA CMP

    To which we agree about niches!
    Thanks Mike.

    Dr. David Edward Marcinko MBA, CMP

  • Kristin Harad

    There is no marketing topic that I am more passionate about than the need for niche – especially since so many in the financial services industry handicap their marketing efforts by being as broad as possible.

    Most planners (and advisors and insurance brokers) believe that they should cast as wide as net as possible lest a prospect get the impression that you can’t server their needs and move on. (I was just looking at a planner’s Website today that proudly boasted that they best serve clients between 20 – 80 years old.) However, the opposite is actually what happens and it’s exactly as you describe. Instead of clearly communicating who you best work with and why you are the perfect fit for their circumstances, you put the onus on the prospect to figure out what you do and why they should work with you.

    By narrowing down your focus to a niche market, you make it incredibly easy and potent to clearly describe who your ideal client is and how you can contribute tremendous value in working with them. Yes, the client who falls way outside of this niche will probably not be interested in working with you, but you shouldn’t be striving to work with them either. You are not trying to be all things to all people, but to exceptionally serve those who fall within your market.

    A niche strategy may make it feel like you are limiting your market, but you’ll much more effectively market to and serve the niche that you’ve selected. Prospects will be much more excited to work with you and you’ll likely even find the work that you do for them to more enjoyable for yourself. Go small to grow big!

    -Kristin Harad, CFP

    PS I offer a series of free videos on niche marketing strategies for financial planners at

  • Dave Grant, CFP(R)

    Excellent article, Michael!

    I am beginning the journey of acquiring clients and have been lucky enough to work with Kristin. Instead of “casting my marketing net and hoping to catch something”, I have a defined plan of how I will market to my specified niche. The process of defining a niche is not one to be taken lightly as it should be a long, if not lifetime, commitment to that particular field. The reason I chose my niche, teachers within 5 years of retirement, came out of examining where my interests lie, where my natural network is(various family members are teachers), but most importantly, what group of people I could see myself working with in 20 years.

    I know I have plenty of years to put this into practice and am excited to see where it leads.

  • Alan Smith

    John Bowen at CEG Worlwide has some excellent material on this subject

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  • Joshco0752

    This is one of my favorite topics. If you add the concept of persona’s to the niche conversation it’s an easier one to have. I find that when I add a question about persona’s of who your customers are I get a better conversation started. This is a really important concept in website design.

  • Steven Fox

    Thank you for yet another insightful and useful post, Michael. I would also add that when deciding upon a niche to focus on, it can be helpful to first consider your own strengths and unique characteristics as a person. Find groups of people with whom you can relate closely and understand their needs well from your own experience and perspective. For example, as I am now beginning the transition to a new career as a financial planner some of the groups I’m considering targeting are military veterans, members of the millennial generation, or small business owners. I have personal experience in each of these roles, and can serve them more effectively because of that.

    I learned this lesson the hard way in a previous (non-financial) business I started, trying to cast far too wide a net. When searching for prospective clients, it is much better to go deep than it is wide!

    • Michael Kitces

      No disagreement here that ideally a niche should match the strengths of the advisor. In practice, many advisors find a niche based on affinities they already have (though I don’t think that’s actually necessary) so that they can capitalize on existing strengths and relationships. (For some further thoughts, see )

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Michael E. Kitces

I write about financial planning strategies and practice management ideas, and have created several businesses to help people implement them.

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