Top tips on finding a niche

Maria Merricks on how to stand out in an overcrowded market.

Finding and targeting a niche is a great way of getting your firm noticed. Becoming the expert in a field boosts profile, improves efficiency and ensures a steady stream of clients. And as the pressures of RDR continue to affect the industry, you should be doing everything in your power to stand out from the crowd.

Peter Dunn, director of Heritage Financial Advisers, says having a specialism makes him part of a community where referrals are rife. Focusing on financial planning for the dental profession, Dunn says 95 per cent of his business comes in the form of referrals from close links such as dental accountants, lawyers and practice sales and valuers.

“What we have created is a network of businesses around us, so we act as facilitators to help introduce dentists to other specialists and vice versa,” he says.

“Having a niche is also beneficial because it means we can focus very much on one sector, become specialists in it and therefore have a really strong understanding of all its unique features. It means we have tremendous client loyalty.”

Reaping rewards

Dunn admits success has not come easily and the firm has worked hard on its business model. He assures, however, it is worth persevering: their income went

up by 40 per cent last year and is on target to grow by 30 per cent this year.
Meanwhile, Ray Prince, certified financial planner at Rutherford Wilkinson Limited, specialises in advice for doctors and dentists and agrees there were challenges at first. He initially only focused on the medical profession, but crossed into the dental market after noticing similarities between the two: for example, both have NHS pensions.

“When we started out and created a brand no one had heard of us, we had no dental clients and we did not know anyone in dentistry,” says Prince.

“It is really hard work making the initial contacts but you have just got to start getting the snowball rolling down the hill. It can be slow at times too; sometimes people want fast results but it does not work that way.”

Prince reinforces the fact hard work will pay off. He says discovering a niche will better a business, not just in terms of money coming in, but in improving efficiency too:

“For simple things like income protection, I only need to know the providers for two occupations. If all your company resources are geared up to serve only two types of people you become efficient internally and externally, and your niche will identify you as the person to go to,” he says.

Geraint Davies, managing director at Montfort International, says his niche discovery was extremely hard to get going, but has now ‘changed the shape of UK financial planning forever’.

After a decade in Australia, Davies returned to the UK in 1992 and created QROPS:
“No one thought it could be possible and everyone thought it was a load of gobbledegook. I stuck my neck out but I knew I was right and technically spot on: if you are going to break new ground you have got to be 100 per cent sure about what you say,” he warns.

Finding a niche

Advisers looking to find a niche have to find something new. According to Davies, it is important to think of something that will not be overtaken by legislation or tax and will stand the test of time. Do the research, he says, and make sure it is backed with confidence.

For many, however, a niche finds them. Following a diagnosis of throat cancer in 2007 George Emsden, senior consultant at in2 Consulting, now specialises on giving financial advice to people with cancer.

With around 90,000 people a year diagnosed with cancer Emsden was concerned about the meagre amount of financial planning information on the web. In particular, he says not enough people know about the options the terminally ill have to free cash in their pensions early:

“About 40 per cent of people do not know you have this open market option and you can shop around for the best annuity. The level of ignorance is rather depressing,” says Emsden.

“If someone has got less than two years life expectancy it can be paid out in cash directly to the client, and that can make a huge difference to the quality of the rest of their life.”

Liz Faye, managing director of Palm Financial Care Limited, realised her specialism just as organically. At the same time her own grandmother had to be taken into care Faye noticed an influx of older clients coming to her for help with long term care fees planning.

She realised there was a need for a specialist company to offer help and advice to families in the same situation.

She says: “I found my niche because I felt a real sense of not just purpose, but achievement in helping these people at a time when I not only knew what they were going through, but I could really help them too.”

Agreeing with Dunn and Prince, Faye admits it was hard work getting the firm’s name noticed at first. Wrongly expecting to approach care homes and receive referrals from there, she says most clients actually come from solicitors and fellow IFAs who do not specialise. She also recommends press work in niche publications as an extremely useful marketing technique.

Faye says the key in finding a successful niche is to be passionate about it and enjoy the work: “If you can find out what your natural strengths are you will have a far more enjoyable and successful practice. For us, it was a real learning curve in the first few months but one we have not looked back from.”