Organic growth has long been a challenge for financial advisors. Despite industry growth rates averaging between 4% and 7% in recent years, only a small percentage of advisors are seeing significant gains. Data from McKinsey and Tiburon shows that organic growth is disproportionately concentrated among a select few, while the majority of advisors struggle to move the needle.
A common assumption in discussions about organic growth is that an advisor’s core value proposition—the quality of advice and client relationships—has already been maximized. This belief follows that any further growth depends solely on increased marketing efforts, improved digital strategies, or better branding.
But is more marketing the answer?
No. Or at least not by itself.
For many advisors, the root cause of weak organic growth is an undifferentiated or unremarkable value proposition.
The Logic Is Simple:
When clients have a truly exceptional experience, they naturally share it with others. They become advocates. However, a client’s willingness and passion to advocate tell a deeper story about the value of the experience. The more valuable the experience, the stronger the belief in the offering, the stronger the advocacy. Advocacy exists on a spectrum—from casual mention to full-fledged evangelism.
Value drives advocacy. And advocacy is a clear signal of value.
The level of advocacy directly reflects the strength of a value proposition. This principle is universal across industries: compelling, valuable, and differentiated offerings fuel organic growth.
What Does This Mean for Financial Advice?
Currently, 70% of organic growth in the industry still comes from referrals. While advocacy and referrals don’t always result in new clients, the absence of meaningful growth reflects a lack of strong advocacy—and, by extension, a lack of perceived value. The average Net Promoter Score for financial advisors is around 50, often seen as good. Yet this means 50% of clients don’t think enough of their experience with their financial advisor to tell others. And what does this imply about the strength of advocacy from the other half?
J.D. Power data highlights that just over 10% of clients place exceptional value on the experience with their advisor, reflected in an average NPS of 93. It’s not hard to infer that this almost unequivocal advocacy also means enthusiastic advocacy. This aligns with McKinsey and Tiburon’s data, which shows that 10% of advisors account for the bulk of organic growth.
The correlation is clear: Advocacy denotes value, and value generates growth.
If organic growth is directly tied to the merit of a value proposition, the real solution is apparent: many advisors need to offer a more compelling and differentiated experience.
Marketing is undoubtedly a powerful tool—it amplifies and accelerates. But the success of any marketing effort depends on the strength of what’s being marketed. Most marketing campaigns will have limited results if the value proposition is less than compelling or undifferentiated. To borrow an analogy: no matter how much you market a frozen hamburger from a box, it's still a frozen hamburger from a box.
So, if you’re not realizing meaningful organic growth, the first thing to do is evaluate the value of your offering and the experience you deliver. For many, realizing more sustained organic growth starts with delivering a more compelling and differentiated offering. And doing so not only drives growth but also creates deeper more valuable client relationships. When measured, this directly and positively impacts the quality of earnings and firm valuations.
Ultimately, growth reflects value, and value is the foundation of advocacy. The more powerful your value proposition, the stronger the organic growth that will follow.
Tom Rieman is CEO of Practice Intel.
