Find your niche and become a specialized market leader

August 3, 2018

Michael Lovett

Michael Lovett
Head of RIA Group

Last fall I highlighted some best practices I've observed at top firms. In January I followed that with an example—a Houston firm that's doing a great job of building relationships with its clients.

Another best practice I offered was about finding a specific segment of the market to serve and focusing exclusively on being a market leader in that area.

Sharpen your client focus

In other words, don't try to be all things to all people. Top advisors often tell me they focus on serving specific segments or types of clients in the market (for example, high-net-worth entrepreneurs).

By focusing on one type of client, you'll help drive down your costs by creating efficiencies and maximizing the impact of your marketing and client-recruitment dollars. Firms that pursue this strategy quickly become experts in serving their targeted clients, which can really set you apart from your competition.

A firm that's found its niche

One firm that's succeeding with this strategy is right in our backyard here in southeastern Pennsylvania. CBIZ InR, based in Media, is an RIA that specializes in small municipal retirement plans and the needs of their sponsors and participants. They provide customized retirement planning for 457, 401(k), and 403(b) participants as well as individual investors.

With roots dating to 1992, founders Michael Glackin and Jeffrey Hugo identified their niche early on.

There are 2,258 individually managed local government pension plans in Pennsylvania, each with its own unique combination of options and benefits. CBIZ InR simply isn't trying to compete in big markets. Michael and Jeffrey created a highly successful practice focusing solely on a small segment of the financial advice market.

"There are more defined benefit pension plans in Pennsylvania than the rest of the U.S. combined," said Michael, CBIZ InR’s president. "When we started, many pension plans were using banks and insurance companies and taking an active management approach. We initially competed by taking an institutional investment approach and using active managers, but ultimately we determined it was in our clients' best interests to change."

Losing focus can have consequences

In 2005 CBIZ InR revised its investment philosophy to take an all-market index approach. The move allowed the firm to streamline processes, focus more on the unique needs of municipal retirement plans and their participants, and lower management fees, making CBIZ InR more attractive to potential clients.

Michael said the firm has resisted the temptation to stray from its core focus, which has occasionally meant turning away business. For example, one new client wanted to keep an active manager in its plan. But CBIZ InR, confident in the success of its investment process, knew from experience that the exception would be problematic.

"When you deviate from what you're good at and get out of your comfort zone, that puts you at risk," Michael said. "You really start chasing that rainbow and getting off course."

Because of its market specialization, CBIZ InR has built an excellent reputation among plan providers and participants. It has become a trusted expert on the expansive options offered through the patchwork of municipal benefit plans. And they truly understand the unique plan rules and hardships that can occur when serving participants who include first responders.

"It's a very small world. Everyone knows everyone," Michael said of the municipal retirement plan market. "We've gotten a tremendous number of individual retirement clients through our relationships with DB plans. For instance, we had one participant who was a truck driver who came in and met with us every year to go over his finances while he was working. Upon retirement, he had met all of his financial goals, which allowed him to take a long motorcycle road trip. He was so thrilled with the service, he continued working with us as an individual client after he retired."

How to choose your niche

So how do you decide where to focus your efforts? There are so many choices! Here are a few simple strategies for finding your niche.

  • Be self-aware. When deciding what market segment to focus on, start with an evaluation of where your firm has the potential to excel and where you're potentially weaker. By concentrating on a strength, you will have less of a learning curve, and you should be able to create a competitive advantage in serving your targeted clients.
  • Review your costs. Serving specific types of clients should create efficiencies in your service model. Take the opportunity to identify any costs that aren't aligned with the needs of your targeted clients.
  • Seek strategic partners/technology providers. They can enhance your strengths while also performing tasks more efficiently and at a lower cost.

Focusing your practice allows you to build economies of scale, create competitive advantages over your rivals, and spend more time on client acquisition. And most important, keep you more focused!


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  • All investing is subject to risk, including possible loss of principal. Vanguard Marketing Corporation, Distributor of the Vanguard Funds.

Michael Lovett

Michael Lovett is head of the FAS RIA Group and a member of Vanguard's executive team.

Previously, Michael was Vanguard's head of distribution in Australia, responsible for the distribution of Vanguard's managed funds and ETFs to retail and institutional clients and advisors in the Australian marketplace.

Before joining Vanguard, Michael helped build a business at Challenger Limited that seeded boutique fund managers. While there, he managed the institutional and retail sales teams for the Challenger boutiques, and the business grew to more than $15 billion in assets under management by the time of his departure. He also ran combined institutional and retail teams at HSBC.

Michael completed a graduate diploma of applied finance from Finsia and holds a Bachelor of Commerce from Deakin University, where he majored in economics and finance.


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