As more and more financial advisors offer comprehensive financial planning services, the pressure is on for advisors to differentiate by choosing a niche specialization. In fact, a recent TD Ameritrade survey found that more than half of all RIAs are planning to target a new niche in 2016!
In this week’s #OfficeHours with @MichaelKitces, my Tuesday 1PM EST broadcast via Periscope, we explore the decision of how to choose a niche, and whether getting the CDFA designation to serve divorcees is a good niche to pursue. Or is the reality that there are already so many advisors serving the divorcee niche, that it’s necessary to pursue something else?
The good news is that for the time being, the shift of advisors towards niches is new enough that few niches are truly saturated, even if pursuing a “popular” specialized niche designation like the CDFA. In fact, soon there will likely be even more post-CFP educational programs for advisors to gain the education and credibility they need to pursue new niches.
In the long run, though, the growth of advisor niches in the next 10-20 years is likely parallel the growth of the AUM model over the past 10-20 years – which means just as the early AUM advisors of the 1990s built many of the biggest “mega” RIAs today, the advisors who begin down the path of niche specialization today are not only ahead of the pack, but may well form the basis for the new “mega” advisory firms in the decades to come!