Why Grow? The Importance of Advisor Growth
It is plain and simple: Most RIAs are not growing organically. In fact a leading research report from The Ensemble Practice shows that 73% of firms experienced a growth rate below 9%. That stat is not good.
But what if I told you it’s not because they don’t know how to grow, it’s because they do not want to grow. Specifically they are not taking the necessary steps to expand their business. And even worse they believe what has worked int he past will work in the future.
According to the latest industry benchmarking studies, firms are struggling with organic growth of AUM, which has plateaued or even turned negative for a significant portion of RIAs. This means they aren’t just failing to attract new clients—they’re also not deepening relationships with their existing ones. For all those who want to embrace growth in 2025, this is video is for you.
Let’s start with why growth matters. Growth isn’t just about adding AUM or increasing revenue; it’s about building a thriving, sustainable business that benefits you, your employees, and your clients.
Here are four key reasons why growth should be your priority:
1. The RIA Landscape Is Competitive: The independent RIA movement is thriving. To stand out in this crowded space, you must demonstrate progress and evolution. Organic growth allows you to differentiate your firm and attract the clients you want to serve.
2. Client Expectations Are Evolving: Clients now expect more than help with their investments. They have access to all the same data points, they can even invest on their own. Today’s clients want holistic financial planning, personalized advice, and a seamless digital experience. Growth enables you to invest in the technology and talent needed to meet these rising expectations.
3. Attracting and Retaining Top Talent: The best employees want to work for firms that are dynamic and growing. Organic growth enables you to offer competitive salaries, benefits, and professional development opportunities, making your firm a magnet for top-tier talent.
4. Meeting Succession Challenges: Growth ensures your firm’s long-term viability. It attracts potential successors and provides a solid foundation for a smooth transition when the time comes. According to Cerrulli, approximately 109,000 U.S. financial advisors—representing 37.5% of the industry headcount—are expected to retire over the next decade. This equates to an average of about 10,900 advisors retiring each year. If you have aging advisors at your firm, or you are an aging advisor yourself, you need to consider growth as part of your succession plan
And the benefits of being a growth-minded advisor are clear:
Enhanced Client Experience: Growth lets you invest in technology and talent to deliver exceptional service.
Greater Profitability: Increased revenue enables reinvestment in your business and ensures financial security.
Innovation: Growth-oriented firms continuously improve, staying ahead of market changes and client needs.
Expanded Reach: Growth helps you reach more clients and make a greater impact.
Higher valuations: According to data from Cerulli and Echelon Partners, firm valuations are closely tied to growth metrics, particularly organic growth of AUM. Firms that demonstrate strong, consistent growth—both in terms of client acquisition and revenue—are more attractive to potential buyers, commanding higher multiples during acquisitions. Conversely, stagnant or declining growth can significantly depress valuations, as it signals limited future potential and higher risk to investors or acquirers. If you want to maximize your valuation you must be growing.
So, what’s your next step? Define your target market. Start by identifying your ideal clients, understanding their challenges, and tailoring your services to meet their unique needs.
Growth is not just about increasing assets under management—it’s about building a stronger, more sustainable, and client-centric business.
If you’re embracing growth as a priority for 2025, reach out or let me know in the comments how you’re planning to grow in the new year.