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The consulting industry is currently awash with articles, conference discussions, and social media commentary bemoaning the sad state of organic growth. While more organic growth is always better than less, recent research conducted by the Commonwealth Financial Network and WealthManagement.com found that the industry growth rate as measured by clients served and assets under management (excluding market valuation effects) was higher in 2023 than in 2022. Furthermore, the results of The survey found that advisors place a high priority on organic growth and are looking for specific ways their firms can help them in their efforts to grow it.

Here are some of the highlights of our research:

After growing at an estimated average rate of 9.4% in 2022, the average annual growth rate of those in our representative sample of advisors and firm owners, as measured by assets under management, rose to 11.3% in 2023. Moreover , 91% said growth was organic in nature, with 54% coming from referrals. To put that in perspective against equity market performance, the S&P 500 Index lost 18.1% of its value in 2022 and gained 24% in 2023.

This year, most respondents have a set target/goal for new customer acquisition, with the typical respondent expecting to secure an average of 12 new customers. Of those surveyed with a formal business plan, about half say these plans distinguish between organic and inorganic growth. Of those who make the distinction, 57% say organic and inorganic growth are equally important, while 37% say organic growth is more important.

Advisor age is one characteristic that emerges as a key determinant of the tools and methods advisors favor—and the help they'd like to receive—to achieve their organic growth goals. Younger advisors with less industry tenure are more likely to use social media and content marketing as the anchors of their marketing efforts; older, veteran advisors are more likely to rely on referrals.

This bifurcation makes sense. Having grown up with the Internet as a major presence, younger advisors are more familiar with social media and have made it more of a part of their lives than many older advisors. In addition, since their client base tends to be younger, less affluent, and smaller than that of senior advisors, it would be difficult for them to rely on referrals as much as advisors do. , who have multiple client relationships and working relationships with centers of influence that can span decades.

Newer survey respondents, while still seeking referrals, tend to be somewhat more inclined to focus on niche markets than the veteran advisors participating in the survey, and are more likely to be proactive in reaching those markets through content marketing and social media than are more. senior advisors with a larger client base.

Therefore, for each group of advisors, firms would do well to provide the tools and assistance that will help them do the type of marketing that best suits their needs and business model. Here's what consultants said would help them improve their marketing effectiveness and ultimately drive organic growth:

• More automation. More than half (52%) of respondents said that if routine tasks (filling out forms, transferring data, etc.) were automated, they could spend more time on marketing. They would also like more technology-based marketing tools.
• More education. Advisors would like a greater understanding of the marketing tools they already have. In social media, as LinkedIn is clearly advisors' preferred platform (used by 60% of advisors and found to be influential by 69%), encouraging the use of its educational tools and engagement with external experts who specialize in maximizing the effectiveness of LinkedIn is likely to be met with favor.
• Measurement systems. “How's it going?” is a question about marketing efforts that consultants would like answers to.
• More help with marketing programs. Advisors would like their broker/guardian to help them with programs and ideas that are working to increase growth.
• Support practice management assistance. Are there ways to streamline operations and procedures to support organic growth programs? Counselors would like to know what they are.

The industry's recent focus on organic growth — even if perhaps a bit overblown — is welcome. Less reliance on market performance and more attention to attracting the millions of Americans who would benefit from professional financial advice is healthy for the advisory business. Even better, the tools now exist to make strong organic growth a reality.

Want to explore more about what's driving growth across the consulting industry? Download our report Driving Firm Growth 2024: Understanding the Different Needs of New and Veteran Advisors to discover the strategies and tools that are shaping success for advisors at every career stage.