A new report from Inside Information and Dialektic Consulting, entitled New Frontiers in Wealth Management, highlights niche planning as one of four main drivers pushing the wealth management industry to its next level of success.
Chen, who recognized some of the challenges unique to people going through a divorce, didnt set out to focus on women. But once he started focusing on divorce, all the people coming to him for help were women, he said.
I guess it goes back to the idea that men will never stop to ask for directions, he said. It seems men also wont ask for help when theyre going through a divorce.
The fact that Chens niche evolved to focus primarily on women supports his advice to other planners looking for a group of clients to target.
Do not overgeneralize when creating a niche, he said. I learned that even divorce as a niche could be overly general.
Chen recommends identifying a niche and then proceed to narrow it down as much as possible.
My niche is now not just women going through a divorce, but essentially retirement planning for women after divorce, he said.
As Chen sees it, potential niches are everywhere you look and the more specialized, the better the service the adviser will be able to provide.
What makes it a good niche is that the problems encountered, such as retirement asset division, Social Security, alimony and child support, and so on, are unique to the population, he said. As a result, they are not addressed effectively as a whole by mainline financial planners. Specialization allows me to be a better fiduciary, and for the client to get much-needed advice that they would not otherwise be able to get.
A key element in developing a strong niche, Chen added, is drawing hard lines for when the business starts drifting beyond the specialized focus. If something is outside of my expertise and experience, I will not address it.
Specializing also comes with business development and marketing challenges and opportunities, Chen said. It allows you to narrow your focus and makes a lot of things clearer.
For marketing, Chen has connected with centers of influence among mediators and divorce lawyers. He also serves on the board of the Massachusetts Council on Family Mediation, and he recently started a podcast called Friday Divorce.
Because his clients are often in a state of financial uncertainty when he first meets them, Chen has found that hourly fees work best for his niche.
Divorce is uniquely suited to hourly fees because when people have a problem, they just need it fixed, he said. Niches come with specific sets of problems that when youre a generalist you dont come across all the time, and there will be some issues that dont exist elsewhere.
The post How one adviser came to specialize in serving divorced women appeared first on InvestmentNews.
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