As professions such as medicine and law evolved, we saw greater specialization among their practitioners. The financial planning profession is a younger profession in comparison to medicine and law, but we are seeing an increasing shift toward specialization by financial professionals.
That was the word from Michael Finke, director for the Granum Center for Financial Security at The American College, who presided over a webinar on why this is the right time for registered investment advisors to specialize.
For Scott Winslow, managing partner at Nabell Winslow Investments and Wealth Management, the move toward specializing in retirement planning for the mass affluent came about in response to the prospective client base in his community of Wilmington, N.C.
“At the end of the day when you look at our market and you’re trying to be a business owner, we saw here in Wilmington that retirees are moving here at a rapid pace,” he said. “So we decided we want to be all things retirement. We all got our Retirement Income Certified Professional designations because we wanted to be able to put math and art and science behind what we do.”
Winslow said his clients have between $500,000 and $10 million in assets. “We use a lot of behavioral finance to help keep them in their plans,” he said.
After he decided to focus his practice on its target client, he said, “we started doing everything in our firm from the way we invest, the way we talk, the way we do our marketing, the way we build relationships with other professionals to focusing on mass affluent retirees. Our focus is let’s be the very best in this market for what has the most client potential.”
In a larger firm with multiple advisors each focusing on different areas, specialization means “Let’s get the best minds together to get the best possible solutions,” said Heather Welsh, vice president of wealth planning with Sequoia Financial Group in Akron, Ohio. “There are so many nuances to planning that no one person can know everything.
Welsh specializes in working with small-business owners, and she said they have an array of needs. “Having different members in your firm who can dig into these various areas a bit deeper can help these business owners with all the things they need to know,” she said.
Specialization has led to a “continuous wave of referrals,” said Terry Parham Jr., chief financial officer with Innovative Wealth Planning in Los Angeles. He pointed to an advisor in his firm who has pulled clients from a specific geographic area.
“He has developed this sort of territory where he gets this continuous wave of referrals from those who live in the area he serves,” Parham said. “It’s like a self-licking ice cream cone.”
The key to specialization, Parham said, is “active listening” to the people in your niche market.
“When my career took off, I was working with active duty military,” he said. “It comes down to listening. I had to listen to their concerns, their struggles and what they were good at. Once I was able to package those and create a recipe that led to a good result, I could do it over and over.
“It’s the same active listening process I use when working with other client groups. It’s truly caring about the person across from me and doing it in a way that adds value and doing in a transparent way.”
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.