(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Hilary Johnson
May 2 Bill Moran's career as a financial adviser
with Merrill Lynch blossomed in the 1990s when he came out as a
gay man and started focusing on the needs of the gay and lesbian
He stopped cold calling prospects as he had when he was
building his business in the late 1980s, and began to network
with attorneys and other professionals who were expert in
lesbian, gay, bisexual and transgender issues, and worked with a
local HIV/AIDS related charity.
Moran remembers becoming a "go to guy," for LGBT individuals
and couples looking for financial advice in the Washington area.
Slowly but surely, he began to find clients more easily.
Now, as head of the nationwide LGBT Financial Services Team
at Bank of America's Merrill Lynch, he manages about $200
million in assets and assists other advisers who want to learn
how to better help LGBT clients.
He doesn't think every adviser should follow him into his
own specialty, but he does suggest that advisers find their own
right niches if they want greater financial success and personal
"Find where your comfort zone is, whether you're working
with small business owners, the LGBT space, people with special
needs" or some other target client group.
His firm agrees. Throughout its wealth management
businesses, Bank of America encourages advisers to specialize.
It provides marketing materials to help advisers attract
segments such as women and those with special needs. Advisers
can also target their local communities or focus on a planning
specialty, such as helping clients who want to transfer wealth
to the next generation.
The higher the net worth of the clients served, the more
critical specialization is. BofA's U.S. Trust unit, for example,
requires private bankers to "choose a major" to help attract
ultra high net worth clients.
"All of our advisers are encouraged to narrow," Justine
Metz, head of marketing for Bank of America Global Wealth and
Investment Management, said. "You can't be all things to all
Sophie Louvel Schmitt, a senior analyst at Aite Group, says
her research on wealth management firms and advisers shows that
many are striving to specialize in hopes of differentiating
themselves in a crowded field.
"Now more than ever, it's extremely competitive," Schmitt
said. "If you can relate to a client within the context of their
specific situation, not just help them with their financial
affairs, you're going to stand out."
Michael Kitces, a partner and director of research for
Pinnacle Advisory Group and publisher of the financial planning
industry blog Nerd's Eye View, views specialization as a must.
Advisers who don't pursue a niche because they don't know
which one would be the "right" one are missing an opportunity,
"Virtually any remotely reasonable niche is better than
being a generalist right now," he said, because comprehensive
financial planning is no longer the differentiator it once was.
THE ETHNIC NICHE
Alan Kondo found his niche in his Japanese-American
Growing up, the founder of registered investment advisory
firm Kondo Wealth Advisors in Pasadena, saw his Japanese
grandparents and others in the Japanese-American community were
leery of financial institutions. Many had lost money during
World War II when they were incarcerated and their financial
Kondo saw that his Japanese-American clients were likely to
be ultra-cautious but also loyal. He began to target the segment
by writing a financial advice column in a local
Japanese-American newspaper, and, later, books that addressed
the lingering concerns.
"One of the best pieces of advices I got," Kondo said, "was
to find your niche and pursue it. Don't try to shotgun it; be
very specific about who you want to serve."
Justin Reckers, founder and chief executive officer of
Pacific Divorce Management in San Diego, chose to focus on
divorce as a financial adviser, when at the age of 21 he watched
his parents "go through one of the nastiest divorces" he has
ever seen. Since the children were grown, the divorce became all
about financial matters, Reckers recalled, and it wasn't pretty.
"That definitely gave me my first jolt of ambition, to help
people do this in a better way," he said. He also realized the
field was wide open. "There wasn't really any place to get
financial advice when you were going through a divorce," he
said. Learning as much as he could about local divorce laws, and
networking extensively with divorce attorneys helped Reckers
stand out and build his practice.
Now 33, Reckers oversees about $250 million in assets, and
is expanding his business by offering divorce-planning
franchises to other advisers.
He sees specialization as the only way for advisers to
differentiate themselves in a crowded field. "Being an expert in
something, and doing a deep dive into a field," he said, "is
most definitely the way of the future."
(Editing by Linda Stern and Cynthia Osterman)