It’s accepted wisdom that finding and focusing on a niche market is a good idea. However, when it comes to executing on the strategy it’s harder than it sounds. And, if it isn’t hard, there’s a reasonable chance you don’t have a real niche strategy, rather a preference for certain types of clients. (Not that there’s anything wrong with that.)As part of our ‘Advisor’s Studio’ series I recently had the opportunity to speak with two advisors who leave no doubt as to whether they have a niche strategy or not. Randy Gerber is the founder of Gerber LLC and focuses on first generation entrepreneurs. Chris Moynes is a Managing Director at ONE Sports + Entertainment Group and focuses on professional athletes and entertainers with an emphasis on hockey players. He is the author of The Pros Process: An Expert's Approach to Wealth Management for Professional Athletes. They don’t dabble; they are ‘all in’ and it’s paying off.1. You can access the full interview below and ignore the rest of my comments.2. Or, you can download the transcript if you prefer to read than listen.3. Or, you can keep reading and I’ll try and summarize to highlights of the interview, along with a hefty dose of editorializing on what I’ve seen as some of the drivers of a great niche strategy.

The fact is that there is a lot of great information on how to define a niche that is right for you. In a recent article in Investment News, I talked separately about some of the practice management implications. In this post I’d like to focus on some of the potentially less obvious drivers of success – the way you think about and approach your niche. Those that get this right, like Randy and Chris, set themselves completely apart from those who dabble.

You need passion for your niche, to like what they represent and how they think.

Julie: You say your work with first generation entrepreneurs, which is an interesting point of specificity. It's not entrepreneurs generally, or it's not business owners generally. Why is it that you've focused on first generation in particular?

‍Randy: Back in 2001 or 2002, we felt like our niche was business owners specifically, and as we started paying more and more attention to the business owners we realized that we really preferred working with first generation entrepreneurs versus partners or second and third generation. The reason was more about the thinking that first generation entrepreneurs have. They don't view the problems as problems. They view problems as opportunities. They're cup is half full. They take a different approach to life in general.

‍Chris: I would say that ninety percent of my sports practice is hockey. The remainder is golf right now. The fact is that I have dabbled in football, baseball and basketball. I've had clients in all three major sports. It just didn't fit. For me there's a passion for sports. I've always been passionate about that and how great is it that you could build in your background, your education and all the things that you're passionate about in your work side, and to have it relate to the world of sport and entertainment. I understand the people that I work with. I get their day-to-day challenges and I think that's really what you have to do in defining your niche.

You need to understand the challenges that may not be obvious to others or to themselves.

Julie: Chris, can you tell us about your niche market and what sets them apart.

‍Chris: My niche is professional athletes and entertainers. With professional athletes and entertainers. Part of what we do is sit between their work and their personal lives and sometimes that’s a very fine line because they are public figures. Because of that, because of how much money they earn they still need to dial it down when they leave the rink or the field or the movie stage and get into their home. We help them blend that together in a way that that will allow them to enjoy and grow their personal lives using the wealth that they're accumulating in their particular craft.

Easy to say, tough to do. Perseverance and belief matter.

Julie: What was the transition like? When you made the decision to focus was there a decline for a period of time? What's involved in actually getting you across that bridge?

‍Randy: Well, it was easy to make a decision; really, really hard to execute it. We had something to the order of 350 clients and we dropped down to something along the lines of 80 over the course of a three-year period of time. We were adding new clients and we very quickly realized that who we were adding were (a) we enjoyed working for them, but (b) that actually we're far, far better off. It was pretty easy economically to make that transition. In fact, we didn't have a down year. We had a down year in '01, we had a down year in 2009 but that's been it. It was a lot of work, it was a lot of emotional work and emotional pain. Some of the relationships we had for a long time, but just, you know, as we explained it to people they understood. They didn't like it necessarily, but understood at least the rationale and logic behind it.

Don’t get too emotional; you need to do the math.

Julie: Is there anything else you need to think about in order to say, "Is this the right move? Am I ready for actually taking this step?"

‍Randy: You have run the economics behind it. I don't know, sitting here today, if I've even necessarily plan planned for some of that because I know that last year, 2014, was a terrible year in the industry for net new clients. Whereas five years ago, it was huge. How do you predict that going forward? I don't know how you do that. You have to have a transition plan, certainly, on the economics. For every X client bring in you're going to lose Y, deliberately lose Y, you're going to transfer Y. And it may take you five years to do that.

Expertise creates a barrier to entry.

Julie: As you've been talking, you both clearly amassed an enormous amount of insight and expertise within that niche. Do you use that knowledge to market? Do you use thought leadership techniques?

‍Chris: Well, in my mind, I think that that’s part of the message that we want to get out there, is that there is a process to what we bring to the table and we’re the experts, which is why I wrote the book. The idea is that we do this on an ongoing basis and as long as you have this routine or this process and you link it into their professional lives, then it works. The fact is that you have a routine in what you’re doing in earning the dollars that you’re earning as an athlete. So why can’t you add another layer to that into your financial management? It’s just another piece of the routine, another piece of process.

‍Randy: When I was thinking about going down this journey, I did a fair amount of research, or tried to do a fair amount of research on first generation entrepreneurs and it’s really interesting. There’s nothing out there. Very little. What I realized was that it’s not out there because it’s hard to monetize relationships with a first generation entrepreneur. There’s very few people out there that have the ability to monetize it. We’re one of the few. Our industry’s one of the few. There’s such a small population, they’re hard to develop relationships that trust quickly. Which is, once, now that you’re in it, it’s great because it’s a huge barrier to entry for the competition, but we realized there just wasn’t much information out there so we’ve been on our own journey of developing content and we, frankly, I think we have a long way to go. There’s so much content there it’s just we’re at the tip of the iceberg with it. I enjoyed my conversation with Chris and Randy. They represent something quite rare because they have completely built their businesses around the unique needs of their clients. That’s something most advisors try to do but in their cases it takes on new meaning based on the shared experiences and needs of their clients.