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People who have trouble focusing see an optometrist. Those with back pain perhaps visit a chiropractor. Similarly, individuals in unique financial situations, who earn money in a special way or belong to a specific social group may have considered consulting not only one of the nation’s 300,000 or so financial advisors but one who specializes in a particular demographic niche, be it professional, social, religious or even hobby-related.
At least one certified financial planner, for example — Jared Reynolds of Wilkerson & Reynolds Wealth Management in Columbia, Missouri — specializes in serving fishing aficionados. He calls himself the “fisherman’s financial planner.”
In addition to their CFP designation, some niche advisors might even boast a specific professional certification and/or affiliation in their chosen area of expertise. Those serving mainly divorced women may, for example, be both certified divorce financial analysts (CDFAs) and members of the Association of Divorce Financial Planners (ADFP).
Top financial advisory firms are finding opportunities every day by targeting certain niche markets.
According to CEG Worldwide research, 70% of top financial advisors (those earning $1 million or more annually) focus on a particular niche. Why? Because financial advisors need to differentiate themselves in this competitive market with a niche to attract and retain clients, according to experts say.
Additionally, research firm Cerulli Associates has reported that 15% of U.S.-based advisors are concentrated on a unique niches, although their practices account for 29% of overall advisor assets. CNBC takes a look at a small selection of investor demographics and the niche advisors serving them.
— Compiled by CNBC’s Kenneth Kiesnoski
Updated 7 May 2019. Originally posted 17 October 2014.
Athletes and celebrities
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A big acting break or new football contract can render a once-starving actor waiting tables or amateur college athlete an instant millionaire. Stories of suddenly famous celebrities and professional athletes eventually—or quickly—going broke are legion. A growing segment of financial advisors are tapping into this got-rich-quick pool of potential clients by specializing in the three A’s: actors, artists and athletes.
The National Football League Players Association runs a Financial Advisors Registration Program to accredit planners such as New York-based HSW Advisors and authorize them to represent team members. The players’ association updated its program participation rules in 2018, and all accredited advisors will have to hold certified financial planner or chartered financial analyst designations by 2020 to continue participating. HSW Advisors also markets to entertainers, some of whom may avail themselves of the Actors Fund Financial Wellness Program. Los Angeles advisory firm Abundance Bound was founded by a group of actors who banded together to help other performers tackle money matters.
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The financial and legal landscape has changed beyond recognition for LGBT (lesbian-gay-bisexual-transgender) Americans, thanks to the rapid advance of same-sex marriage, anti-discrimination legislation and other legal developments across the U.S. over the past couple of years. Whereas lesbian and gay couples, and their legal and financial advisors, once had to wrestle with unique challenges such as inheritance and hospital visitation issues in the absence of municipal, state or federal protections, they now must learn to deal with many of these issues much as other Americans already do.
Advisory firms such as Christopher Street Financial in New York continue to specialize in LGBT clientele, much as they have for decades, but other mainstream firms are adding experts in the niche to their ranks. Kyle Young, a certificated financial planner at Schmitt-Young Investment Group Morgan Stanley whose clients are nearly all LGBT individuals, has told CNBC that — because of financial liabilities — he at one time was seeing 50-50 split on whether or not his gay and lesbian clients wanted to tie the knot. A 2018 survey by Credit Karma Tax, meanwhile, found that more than a third of same-sex couples who got married between 2013 and 2017 said they were unsure and confused when it came to selecting their tax-filing status.
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Older can mean wiser. According to the 2019 TIAA Institute-GFLEC Personal Finance Index, 45% of finance-related questions are answered correctly, on average, among survey participants aged 18 to 29, compared to 56% among people age 60 and older. “Financial literacy is especially low among the young,” index co-author Annamarie Lusardi told CNBC recently. “And that’s a major disconnect since they are about to make — or already have made — important and consequential financial decisions.”
An investor’s 20s and 30s are the best time for him or her to start managing money wisely and investing, particularly in long-term retirement accounts. So there’s ample fertile ground among this second baby boom generation of an estimated 80 million Americans from which specialist advisors can reap business and sow prosperity. Accordingly, financial planners such as CFP Sophia Bera, founder of Gen Y Planning in Austin, Texas, have made a booming business out of catering to the unique needs of the under-35 set.
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Americans professing the Islamic faith are a growing demographic with very specific investing needs tied to religious strictures. Today, there are about 3.45 million Muslim Americans, comprising 1.1% of the U.S. population, according to Pew Research Center. About 20 percent of them earn $100,000 or more a year. Islamic religious law, or Shariah, is very specific when it comes to how Muslims manage their finances. For example, the earning of interest and types of investments allowed are strictly regulated (e.g., no profit from alcohol or gambling enterprises), and Muslims are required to donate at least 2.5 percent of their income annually to charity (a practice known as “zakat”).
Financial advisor Sheraz Iftikhar, managing partner and co-founder of Arch Global Advisors, told CNBC in 2014 that a third of his Muslim clients insist on Shariah compliance. Iftikhar even has a triple specialization—in doctors, Pakistani-Americans and Muslims, through his affiliation with the Association of Physicians of Pakistani Descent of North America.
Professionals: Doctors, airline pilots
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Relatively high-earning professionals such as physicians and airline pilots can be just as clueless about finances as the rest of us. And it’s no secret that certain professions, such as doctors and dentists, are often saddled with far more student debt and operating (pun intended) expenses than the general American public, which can make saving and investing effectively problematic. Specialist advisory firms such as St. Louis-based Larson Financial diagnose and try to cure medical professionals’ financial woes, and Milwaukee’s Cleary Gull offers The Pilot Program, a pre- and post-retirement seminar series for pilots flying for airlines American and United.