Who is Your Ideal Target Market? Three Benefits Of Narrowing Your Focus

Posted By on Feb 9, 2014|2 comments

In 2008 the stock market declined. For most fee-only advisors, this meant close to a 50% reduction in revenue. With this decline, the mental, emotional and economic impact took a toll on financial advisors.

After speaking with 719 advisors, I uncovered that most of them wanted to grow their sales but did not have a plan of action. They wanted to grow through referrals but did not have the procedures to do so.

The instinctual reaction to a decline in the market is for advisors to sell to anyone or anything that moves and is breathing. However, our natural instinct is quite wrong. We need to become more focused and more intentional about the type of clientele we are going after.

Three Reasons To Focus on Target Markets

There are three main reasons why we need to hone in on a set target market of clients. First, being focused and specific helps us better communicate the benefits that we provide. Second, when we are focused on clients, we act with intent and provide a better service. And third, target markets allow us to be more efficient—we can create procedures around selling to and servicing the needs of these target clients.

The whole point for advisors is to create a competitive advantage by providing a service that is simpler, faster, better or cheaper for our clients. But from what I have experienced, this is not the best working method. You can be the cheapest advisor in your area, but if you don’t know who your target market is, how will you capitalize on your competitive advantage?

On Target

We recently updated our target market for AUM in a Box. The outcome we wanted was for financial advisors to engage themselves in what we were doing.

We started out by listing the clients we have and the characteristics they exhibit.

The second step was to narrow them down based on three questions: What geographic region are they from? What are their demographics? What psychographics do they display?

The geography is simple. This is where our targeted advisors are located. The second is the demographic, which includes: age, types of clientele that they cater to, what they are selling and how they go about selling. The psychographic is how the financial advisors think, operate and conduct themselves. We determined that the psychographic characteristics were the best to help us hone in on our target market. You may choose demographic or geographic elements. Or, you could choose a mix of all three.

At AUM in a Box, we seek advisors who appreciate efficiency and believe that efficiencies enable them to create better businesses. We want advisors who are seeking to turn their practice from just a job into a business.

As a team, we came up with the following statement that will help financial planners choose us rather than us choosing our competitors:

We are interested in working with advisors who do what they do best, know their strengths and want to improve what they are doing. Advisors work with us to provide process and procedures to turn their practice into a business with better sales and operations. We want to work with advisors who appreciate a systematic and structured approach to getting things done. Personally, we want to work with advisors who are positive, proactive and driven towards their vision.

Following our target market may reduce the size of the overall population that we are honing in on, but we will make that up in converting more advisors to clients with 100% satisfaction.

Next Steps

Think about who your target market is—where are they from and what are their demographics and psychographics? Once you identify your target market, then you can create processes that specifically meet their needs, saving you time and making your ideal clients more satisfying.

photo credit: Bogdan Suditu via photopin cc


  1. Bull’s-eye!

    I was inadvertently introduced to this “Target Market” concept in the late 1990’s after working with several financial advisor through my custodial services employer. I always assumed the ONLY way for an advisor to grow their business is to work with ANY client who rings their doorbell.

    Niche: Several advisor relationships I oversaw had specific niches. Doctors, dentists, teachers, war veterans, divorcee’s, widows, et cetera. I started to understand that these financial advisors gravitated to a specific niche for various reasons. Some personal reasons like being war veterans themselves or previously in the medical field, or divorcees.

    Language: They spoke the same language and understood people who had similar life circumstances. A financial planner who’s been through a divorce will understand the emotional circumstances a divorcee client will be experiencing. War veterans will probably relate better to clients who are war veterans as well.

    Reputation: Eventually, if an advisor works to build their specific niche they will be recognized as a leader in working with that particular group of clients. Their reputation as being an expert in a particular group will hopefully promote their status within the community and beyond.

    Thanks for posting this discussion Jamie.

    …………….. my .02 cents………….

    Post a Reply
    • Marty, Your insight is helpful. I specifically think your comments on language and reputation are where the true value occur. As this builds over time even more momentum is created.

      Post a Reply

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