In order to be successful, advice practices should target a specific market segment, according to the latest White Paper from CoreData.
The paper, entitled ‘Planning for Success’ follows on from the researcher’s examination of the licensee of the future, issued in late 2011 (see: No Middle Ground for Successful Licensees).
In order to be successful in the new Australian financial advice market, CoreData says practices will need to embrace segmentation.
‘The success of many practices, and their ability to implement many of their chosen fee structures, appears largely driven by an astute and pointed targeting of specific segments of the market,’ says the research firm.
The paper argues that segmenting the market, targeting a specific segment and positioning an offer to suit that segment is a basic foundation of all marketing plans, and that successful practices are already heading down this path.
Successful practices have a clearly defined client value proposition
However, the researcher cautions that simply identifying a niche market to target is not enough to ensure success:
‘Of course, there is more to it than just coming up with a target segment; successful practices have a clearly defined client value proposition (CVP) that provides reasons as to why a client should deal with their business, articulates the benefits and communicates these in a manner which is easy for them to understand.
CoreData also contends that as more sophisticated financial advice clients emerge, there will be a greater demand for the ‘one stop shop’.
‘Acquisitions at the practice level are likely to be horizontal and involve mergers between financial planning firms and non-planning firms as well. We are likely to see more and more accounting functions being subsumed into financial planning firms, or vice versa. The client advisory landscape is much more fluid now, with a number of professions all laying claim to providing financial advice. Financial planners are no longer just facing competition from other planners; competitive pressures are emerging from accountants, business lawyers and stockbrokers as well.’
