Just as a neurologist treats patients by focusing on a particular group of nerves to cure a nervous disorder, IFAs believe that having a focused clientele helps them understand and serve these clients better.
Suresh Sadagopan, Ladder7 Financial Advisors
I think it is important for an advisor to know what type of clients he is comfortable servicing. Dealing with a specific type of profile for a long time helps the advisor fine tune his knowledge regarding the needs and priorities of that group. This will also help in training the team to address the common problems these clients face.
When you are focused on a particular type of clients, you can target your marketing efforts to reach out to these client groups. For example, if you want to service doctors or lawyers, writing in magazines that cater to this niche would be the first logical step.
While most people develop an ideal client base over time, it is better to identify your ideal client base sooner rather than later. This way you will have targeted training and development, client communication and marketing.
Nikhil Naik, Naik Wealth Planners
I think when an advisor is trying to decide what his ideal client type is, he or she must first introspect and see whom he can relate to, the ones he can understand and what type of clients will relate to him. Only through proper introspection can he arrive at an ideal client type.
On arriving at the ideal client type, he/she will have to see the viability of the segment. How far can you expand? Is it profitable? As financial advisors we propagate the benefits of diversification to our clients. We must apply those rules to our practice as well. Advisors should identify varied client segments that they would like to service and have a complete fit with their ideology. This will balance out your portfolio. Keep in mind, having a varied client base does not mean on-boarding anyone and everyone. It means having two or three client types who will suit you and your business.
It is better to choose not to work with a client than work with someone you do not relate to.