Many firms have considered and decided to specialise in niche markets. A common speciality is working with contractors affected by IR35.

Unfortunately, this is a risky option as a simple change in legislation can sweep away the need to the specialist services offered. In extreme cases, this could result in the virtual loss of an affected practice’s recurring income.

An alternative to this approach is to specialise in working inside vertical markets where clients all offer similar services. For example, medical practitioners, entertainers, hospitality traders and so on.

The advantage with this approach is that any specialist knowledge required, and acquired by the practice can be leveraged to good effect for the benefit of clients and staff.

As the experience of the last two years has underlined, any practices that specialised in advice for the entertainment, leisure or hospitality trades will likely have seen a reduction in their gross recurring fees as COVID disruption, particularly enforced lock-down, has forced many out of business.

And yet many vertical markets have thrived. There is an argument that businesses that have an active online sales platform will have done well as their high street competitors have struggled. Clearly, advisors need to take a hard look if they have developed a niche (vertical) market approach. It is likely that reliance on the continuance of established markets may no longer be a winning strategy in the post COVID era.

Managing a niche market may still have legs but perhaps have lost its pre-COVID appeal.

Source: New feed