There are two common trends that make most advisors think they're losing it -- and these trends are diametrically opposed.
The first trend is that of wealth management. Wealth management differs from financial planning in that wealth management, by definition, is truly a proactive and holistic type of relationship. Financial planning can be done as a standalone analysis with no follow up or proactive requirement. The wealth manager becomes an advisor and accountability partner for every single element of a client's financial life. So while the wealth manager may not sell insurance or do tax returns, it is the wealth manager's responsibility to see that that work is done by a competent professional in a timely and professional manner consistent with the client's goals and objectives.
The other trend is that of the specialist -- and following are four paths you can take to specialization.
#1: Broad product or service for a broad audience
While this may not seem specialized at first blush, it certainly can be. Most clients do not appreciate insurance agents who hold themselves out as financial planners. If your reality is such that 100 percent of your income comes from the sale of insurance products, then call yourself what you really are -- an insurance specialist. If you are an insurance specialist and you represent life, LTC, annuities, etc., then you offer a broad range of products and services. If your clients come from all walks of life and their needs vary for business, estate, or income replacement reasons, then you have a broad audience.
#2: Narrow product or service for a broad audience
Using the same example as in the previous paragraph, you may be really superb at long term care sales and consulting but not too interested in life insurance or estate planning. In this case, you'd be better off with a narrow product and service. If you don't limit your audience to corporate or group purchases or people only looking to buy a lifetime benefit, then you're serving a broad audience.
#3: Broad product or service for a narrow audience
If your level of expertise and interest runs the gamut from life to annuity to LTC products, you'd be well served by utilizing these strengths. An example of offering these broad services to a narrow audience would be the application of your knowledge exclusively to automobile dealers. While it may seem narrow enough to you to simply deal with business owners, you may be much better served if you can truly narrow down your audience to the least common denominator and become a market leader or dominator.
#4: Narrow product or service for a narrow audience
This category is about as specialized as you can get. Your offerings are very limited, such as insurance or estate planning for non-U.S. citizens. Many of today's top financial professionals have these narrow offerings and client bases.
Why specialize?
For any practitioner, young or seasoned, the most difficult part of your branding and marketing campaign is differentiation from the masses who say they do the same thing that you do. You can pay thousands of dollars for a marketing consultant, and not have noticeable results if you don't get this part nailed down. So spend some time, take a look at what you do currently, what you like to do, and what your natural market needs from you, and then make a decision to specialize or not.
This may be a radical departure from where you are today, but if you believe from the heart that you will be happier and that your clients will be better served by deciding to specialize, do it.
The transition doesn't need to be cold turkey for your clients. For the services that you used to do and no longer wish to provide, find someone to take your place. Perhaps you can refer these clients to someone that you already know who is also capable of referring you clients for your new specialty. If you go across the board, and find that you need several other specialists to fill in for your former areas of service, then you have the potential for many team players who can help your new specialized offerings thrive.
Specialization can take many forms, and you'll find that when you stop trying to be all things to all people, you can focus on what you're best at and be more successful than you ever thought possible.
John Napolitano, CFP, CPA, PFS, MST is the founder and CEO of U.S. Wealth Management, LLC. He can be reached at 781-849-9200 or jnap@uswealthcompanies.com.
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