Michael Kitces reminds us that just as Rome wasn’t built in a day, neither are financial advisory practices. That’s true for new niches within an existing practice as well.
Becoming the trusted “go to” person is the culmination of a process that doesn’t start to kick in until year three if all goes according to plan. It’s not until the fourth year that inbound referrals start to find you in a big way.
The third year is usually when the business experiences a significant uptick, and starts to really feel viable. Suddenly, some business starts flowing. The first client or few (from year 1) start to refer. People you’ve gotten to know previously suddenly decide they’re ready to work with you (they finally trust you). A few people you’ve gotten to know in your niche start sending you referrals, even though they don’t do business with you, because you’re now becoming known as the “go-to” person in your niche.
This means that advisors need to prepare both emotionally and financially for the multi-year ramp. In the beginning, Kitces recommends that advisors avoid discouragement by monitoring their progress toward achieving goals. Focus on the process: How many appointments you make, your speaking engagements, social media traffic, and other niche building activities.