Case Study – Advice Niche for a Petrol Head

Darryn Fellowes openly describes himself as a petrol-head.

So it’s not surprising that the first research paper he and his firm researched and published studied the financial complexities of running a successful motor vehicle dealership. He has always loved cars.

Darryn is principal of Skeggs Goldstien, a 10 person financial advisory business in the Sydney hills district suburb of Bella Vista. His paper – aptly entitled “Moving Metal” – describes the financial complexities confronting a defined and growing group of his clients (owners of medium to large motor vehicle dealerships throughout Sydney). His research is particularly pertinent for a sector facing challenges in getting access to credit in the current marketplace.

Darryn’s already considering drafting an updated version of his paper, as the firm continued to research the market’s issues after the paper was published. He says, “Things are moving very quickly in the sector at the moment, and our aim is to deliver the most pertinent advice and range of financial options that address the constantly changing developments regarding access to credit and opportunities that are occurring almost on a daily basis”.

A New Game

While most advisory firms are trying to ride out the current financial crisis, Skeggs Goldstien aims to create a new game in the delivery of advice by continuously researching the financial complexities affecting sectors they wish to be advice experts in.

And it’s working.

They are picking up good new advice opportunities, looking for additional staff and able to maintain and grow their advice fees, when most of their peers are struggling with sagging renewal streams, margin calls, and searching for areas to trim costs.

Whilst the average age of the current advisers within the firm is 35 years, the firm has a successful heritage dating back to the 1970s. With its large and loyal client base, the firm could have taken a much more traditional route, without turning all advisers into researchers constantly searching for the real hard financial complexities being faced by their ideal clients in their selected marketplaces.

But that’s not the game the firm wanted to play. In fact they believe the reasons for their past success will not be the reasons for their future success.

What’s even more interesting than the firm’s continued growth in these times is the fact that Darryn himself was an unlikely ‘game-changer’ even three years ago.

Darryn isn’t new to the advice market.  He’s 36 years old.  This former Paraplanning/Compliance Manager used to describe himself as a back office adviser. He was always keen to have more front office impact with clients but lacked the confidence, the process, and – what he thought was essential – rapport building and sales skills. But he’s turned that all on its head, and says himself that he’s “grown an extra leg” in his ability to attract, service, and satisfy advice clients.

Three things significantly contributed to Darryn’s new productive outcomes.

  1. He had a managing director in Adam Goldstien who knew how to create the ideal environment for Darryn to flourish, and gave him the direction and leadership needed to take advantage of it.
  2. He attended Bill Bachrach’s Academy in San Diego on value-based financial planning. While there he realised that the use of advice scripts to deliver advice were as integral to a consistent and productive performance as music scores are to musicians. Like skilled musicians who learn their music off by heart so they no longer need the score, he learnt the words and phrases he wanted to use to convey his intent, so he could focus solely on the client and their complexities rather than getting tripped up searching for the right words. No one at Skeggs Goldstien intends to shade the truth or deceive their clients with scripted lines like those used by call centre telemarketers, which show little respect for their prospects. The advice scripts used in Skeggs Goldstien are not designed to force clients to do something that doesn’t benefit them, but to explore opportunities for best supporting and solving the client’s complexities.
  3. To effectively create a professional attachment and intimacy with each client, the firm constantly researches the complexities of selected client niches.

Niche Development

Niches are collections of clients with common financial complexities.

Skeggs Goldstien realised that they had two options regarding niche development: they could (a) develop knowledge of their targeted niches slowly and organically, client by client, or (b) commit to constant and ongoing intelligence gathering, going beyond clients to form their views on the complexities for their selected niches.

They didn’t want to waste either their or their client’s time.

Therefore each adviser has a target each month to interview and research relevant sources within their selected niches.

These research interviews:

  • significantly fast-track their understanding of the complexities faced by their niches;
  • provide opportunities to study the many different options available to solve the niche’s financial challenges; and
  • allow them to meet and create research relationships with other professionals (i.e. accountants, lawyers) already working in these niches and seeking like-minded professionals so they can better serve each other’s clients.

Niche Results

When Darryn or any Skeggs Goldstien adviser meets a new prospect from one of their niches, they’ve already researched the complexities of the prospect’s niche.  But they still rely upon what they refer to as their “discovery scripts” to thoroughly understand the values, goals, and complexities of each prospect before concluding that they’re the right partner to help the prospect achieve their financial objectives year in year out.

Niches also have the benefit of a strong “bush telegraph”. Word of expertise travels fast along the established word of mouth communication networks unique to each niche. These communication networks are usually supported by industry and professional forums, publications, events, and associations. (It’s also crucial to remember that word of incompetence flows through the same network just as quickly – if not quicker – when providers are seen as inept or less than genuine).

Their referral rates are good and growing, and their niche work is very satisfying because they never target niches where they don’t enjoy the people and the challenge. Armed with their scripts and research-based understanding, they don’t have to sell anyone anything. They just spend their time determining if the prospects that make contact with them through their growing referral network are the right ones for them to work with.

And, one of the best parts for Darryn – he gets to work with other petrol-heads.

That’s the new game that Skeggs Goldstien is playing and many advisory firms will follow. These are the best of times to be building valuable client-focused advice businesses.

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