The financial benefits of a specialised client base

financial advice legal medical clients

18 April 2024
| By Laura Dew |
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Those financial advisers with client specialisation are likely to manage funds which are 15 per cent larger than those generalists, according to Adviser Ratings.

Data from the research house showed 45 per cent of advisers surveyed said they work with a specialised client base, most commonly being senior managers, medical professionals or blue-collar workers.

Those advisers who have a specialisation, on average, manage funds which are 15 per cent higher than generalists. This is particularly obvious among sectors like legal and medical workers. 

Given both types of advisers manage a similar client volume, Adviser Ratings said the higher funds under advice indicate clients in these professions have a higher volume of investable assets. 

Specialised advisers also charge a higher fee volume, with specialists charging fees that are 18 per cent higher than generalised ones. For advisers working with senior management and legal professionals, fees rise as much as 30 per cent compared to a general adviser. 

When it comes to future growth, 83 per cent of specialised firms said they plan to increase their client numbers in the future compared to 78 per cent of generalised firms. 

More than half of specialised advisers plan to grow their businesses by focusing their expansion on specific client categories. 

Adviser Ratings concluded: “These findings indicate that while generalists may reach a broader audience, specialists manage larger funds and impose higher fees, particularly when targeting specific niches like the legal sector or top-level management. This underscores a clear need for and higher degree of differentiation when it comes to client type.

“The choice between a generalist or specialised approach in financial advice services will depend on the individual needs and preferences of clients, as well as the business strategy of the advisers themselves. Whether aiming to reach a broader audience or focusing on specific niches, the key is to align the approach with the desired growth trajectory and client base.”

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