Wall Street Journal: Three Words of Advice for Million-Dollar Producers

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives. Dan Richards

In September of 2010, the financial advisor careers section of Wall Street Journal asked 60 advisors from all over the U.S. for suggestions to new advisors starting in the business whose goals were to be million-dollar producers.

Their advice came down to three words: “Narrow your focus.”
 
Why focus is key

This suggestion is hardly new – for at least a decade, advisors have been told that focusing your practice to serve a defined client group is essential to maximize success.

First and foremost, narrowing your focus enables you to develop greater expertise in a specific group’s needs, so you can serve them better.

It allows you to improve the efficiency of your marketing, as you can target your message to a more clearly defined group of prospects and focus on building partnerships with other professionals who serve the same group.

Being a specialist lowers the risks for clients who are considering referring you to friends who belong to the same group.

And in an increasingly competitive world, specializing can be a crucial point of difference, especially in larger urban center. Whether in manufacturing, retailing or professional services, the lesson of the last 20 years is clear: Generalists do just fine when competing against other generalists. As soon as specialists arrive on the scene, however, generalists struggle to compete.

Focused specialists in action

Despite the overwhelming case for focusing your practice, most advisors stubbornly cling to their generalist positioning.

In part, this is because of risk aversion and resistance to change – almost every advisor begins the business with an “every client is a good client” mindset; as a result, five years into the business you have a hodgepodge of clients without consistent needs or themes.  Moving to a focused approach is a departure from what’s comfortable.