Finding your perfect niche – the Water Cooler effect at work

Wednesday, February 20, 2013

Wednesday, February 20, 2013
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Business Building Category: 
Niche Positioning
Practice Management

At some point, most advisors have been told that they should concentrate their efforts on attracting clients in a defined niche. There are three reasons for this:

• You’ll build unique expertise in this group’s needs; as a “specialist” in its challenges, you’ll be able to deliver outstanding value that generalists can’t match.
• Depending on the group, you can build credibility and profile by being interviewed in industry publications, writing articles and speaking at their industry events.
• By focusing on a defined niche, you become the “safe choice”   within that group and will see many more referrals as a result

Today’s article on how to find your perfect niche is a follow-up to “From 0 to 100 clients in 18 months,” a guest article last month by U.S. industry expert Katherine Vessenes, which described how she attracted over 100 clients, each of whom paid an annual planning fee of $1200 or more.

Vessenes’ advice on finding your perfect niche is below; to read the first article on how she went from 0 to 100 fee-paying clients, click here:


The Perfect Niche:  By Katherine Vessenes, JD, CFP®, RFC

When people ask me how did you manage to bring on over 100 new clients in 18 months, in a brand new market, I tell them there were a lot of factors—but close to the top of the list is finding the perfect niche.

In working with multimillion-dollar advisors I noticed most of them had clearly defined niches. They knew who their ideal client was and they had a marketing plan that worked for their perfect prospect. Another thing became apparent to me early on—only two of the many multi-million dollar advisors we have assisted, had thoughtfully and systematically pursued their niche in a business-like manner! 

Here is what I mean—only two advisors took the time and energy to think about a niche that would be a good fit, and then went about testing the market to see if it would work. One of them (I’ll call him Ted from Seattle) actually tested three different niches. Two were complete bombs until he settled on the one that still works for him 25 years later.

All the other advisors just fell into their niches. Lucky for them, they were in the right place at the right time for their target group. They started working with employees of the local utility company, professors at the U, or Boeing employees and one good experience led to another—pretty soon a good portion of their new business came from referrals in their niche.

I too, tested out a number of different niches and learned a lot about what works and what doesn’t work:

What didn’t work for us or lessons from the trenches:

Clients who are too far from us in social class, culture, education and self-confidence.

One of the niches we experimented with involved members of a local Evangelical church in the Midwest. The church is huge and if the niche worked, it would have kept us busy indefinitely. We even had a Biblically responsible mutual fund that we thought would appeal to this group.

Even though my own spiritual beliefs were not too far from this group, I was much different in the other categories: with my law degree and CFP, I had much more education than the prospects did. In fact, I didn’t even know another woman out of the thousands of attendees of this church who had a doctorate degree. I didn’t hang out with this group socially and once you’ve been legal counsel to a former US president and you’ve started your own business, you don’t lack in the self-confidence department, either. Or maybe it was just my sassy Texas heritage leaking through.

Don’t get me wrong. These were all kind, lovely people. In fact you would probably want your children marrying them. There was just one problem—they were so far from my personality, background and character, we just never jelled.

So you can imagine how maddening it was for me to watch some of the women refuse to make any decisions about their money, unless their husbands gave them the nod of approval. (Inside I am thinking: “Honey you can do this. You are smart and educated! This is the reason we got the vote. It is your money—you can make the decisions!”)

Eventually it became clear to me that my big Texas personality was just too much for the laid-back Midwest woman. No matter how much I tried to “pull it in” I was never going to fit in with this group. Short of moving back to Austin, I had to admit this niche was not a good fit, cut my losses and move on.


Today we look for clients who do fit with our social class, culture, education and self-confidence. They are not fabulously wealthy. In fact, they made their money the same way we did—by getting a good education and then working hard.

All of our clients have doctorate degrees. They actually like that I have a lot of education—it means something to them and they are not intimidated by it. They recognize that they may be very smart in their area of expertise, but they know little about finances and they appreciate our experience and depth of knowledge.

We also seem to fit socially. Many of them will ask me to meet them for social events and I have made some deep friendships in a state where previous to opening the office here, I only knew two people: my daughter and son-in-law.

Older clients, approaching retirement

Yes, I know this is heresy and many people love this as a niche—I am just saying it didn’t work for us.  The reason most advisors like this market is this is where the money is—these folks have accumulated more wealth, so it works out great for a business model that is based on AUM.

Older clients who are pre-retirement didn’t work for us for a couple of reasons: first, because our market is highly educated, many prospects in this category already had their own advisors and weren’t in enough pain to switch to a new one. Secondly, they had no intention of changing their lifestyle so they could save the money they needed for retirement.  Typically they were in houses that were too expensive for them, had high amounts of debt, or were spending a fortune putting kids through schools they couldn’t afford. In fact, most had so messed up their finances, there wasn’t enough time for me to fix them between now and their retirement date.

Our solution:

We found we work well with younger clients who are just moving into their careers. Yes, this may seem like heresy, too, because I was taught when I started in the business it was important to find clients who were between 10 years younger and 10 years older than the advisor. Although I refuse to put my birth certificate up on line, many of these clients are younger than me, a lot younger.

This actually works out great—they have lots of problems and lots of pain. That means there are many ways we can help them and they are very grateful. It also means we can help them set up a good savings strategy now that will benefit them for their entire life. I feel like we are making a difference in every case.

A few of our clients have asked me how long I will be working as an advisor—I tell them the truth—I will be doing this until I am 95—they will be retired long before me. The reason is, this is so much more fun than retirement, I can’t imagine quitting.

Folks who couldn’t save

Another niche we experimented with was college funding—we looked for parents who wanted a cost effective way to put their kids through school. Yes, this is another niche that works great for some advisors—but it didn’t for us.

One of the things we found was this group, even in the most affluent suburbs, was really struggling financially. They weren’t saving for retirement and they certainly didn’t have any money for college funding. We did some fabulous and time consuming college funding plans—helped these guys get more financial aid, changed a lot of lives and didn’t make any money. At least some students will finish college with a lot less debt—which makes me feel better about the work we did.


Our ideal client likes to live on less than they make. In fact many of our two-earner households live on one salary and bank the rest. We find the younger the client, the more likely they will be good savers. They are not wealthy now, but if they continue with our plan, they will be.

What did work for us: The Water Cooler effect at work

We found it was imperative that our clients not only worked for the same company, but they were physically situated in the same building. Being in the same building turned out to be a far bigger factor than I first realized. I think this group eats together in the lunchroom every day and hang out in between meetings. Eventually they must run out of things to talk about—and that’s when our name comes up.

This is one of the key factors I encourage advisors to consider when selecting a new niche. This worked much better for us than college funding—because even though that niche had all the students attending the same school, the parents (our prospects) worked for countless different companies. In general, the parents didn’t hang out together. If they did hang out, they didn’t spend enough time for the conversation to turn to finances. I surmised that it takes time and trust for people to start talking about your services.

Another advantage of having them work for the same company is it saves us a lot of time in getting up to speed on different benefit plans. I can now rattle off the matching limits and disability plans of the biggest employers in our niche. We have so many clients there, this information comes naturally and saves us from having to reinvent the wheel with each new client. It makes us look like the experts we are—because we know their plans backwards and forwards.

One last comment about the pronunciation of the word “niche”. Being from Texas, loving big hair and lots of bling, I don’t use the frou-frou pronunciation I hear from my more educated friends around the country. They pronounce the word: NEESH.

I much prefer NITCH—because it rhymes with itch and that is what we are trying to do for our clients—find the itch and then scratch it for them.

Katherine Vessenes, JD, CFP®, RFC, is one of the top Practice Management consultants for financial advisors. The creator of the No-Sell Sale®, she is considered the country’s leading practice management consultant on building a multimillion-dollar business (Dearborn) and the country’s best known authority on the legal and ethical issues of financial advisors (Bloomberg). She has her own practice where she follows the advice she gives other advisors. She can be reached at:  952-401-1045, or

© 2013 Katherine Vessenes. Permission to reprint required.