One key finding in the study is that specialization is encouraged. The top three niche markets cited by respondents included retirement planning, business owners and entrepreneurs and high-net-worth clients. The report argues that these are core segments, not niches.

Still, respondents cited a total of 17 niches served, including veterans, expatriates and healthcare and life sciences professionals, to name a few. A lot of advisors are hesitant to market themselves as serving one specific niche, for fear of missing out on potential clients that don’t fit into it, the report said.

“This concern is probably misplaced,” the report stated. “The internet has upended the way potential clients seek an advisor or firm, especially when they perceive themselves to have a problem that requires the help of a professional with specific expertise. Younger advisors are more likely to see the value in niche expertise and marketing, as evidenced by the greater percentages who serve niches beyond the ones most often cited by older advisors — retirement planning, business owners and high-net-worth clients, which in truth are core segments, not niches.”

On average, respondents reported an annual growth rate of 11.3% in 2023, up from 9.4% in 2022. Some of that growth, of course, was due to market appreciation, with the S&P 500 Index up 26% in 2023.

Last year, 29% of respondents — the largest single group — said their firm/practice grew by 5% to 9%, while 15% reported less growth and 55% reported more.

Ninety-five percent of firms said they expected to add assets in 2024, with an estimated median of $7.6 million in additional assets.

More than half (54%) of firms said referrals were the most successful driver of growth, compared to 37% who attributed it to other organic efforts, including marketing programs or community prospecting.

“And while mergers or acquisitions may lead to a rapid, outsized spike in clients and AUM, only 8% of advisors in the current survey said that inorganic activity was their firm’s most successful growth driver,” the report stated.

A little under half of respondents (48%) said their firms have formal, written business plans in place, while 21% said they plan to establish one in the next 18 months. Among those respondents with formal business plans in place, virtually all (92%) report those plans have specified a target for firm growth in 2024. On average, that growth target is an estimated 14.3%.

Four in 10 advisors (43%) report their firms have formal marketing plans in place to attract new clients. An additional 23% say they plan to develop such plans within the next 18 months. However, nearly a third (30%) indicate that their firms don’t have marketing plans and have no immediate plans to develop one.

“The most commonly reported components of the formal marketing plans include clearly defined target markets (64%), clearly defined marketing objectives (59%), and specific programs for reaching target markets (56%),” the report stated. “Less frequently cited components are metrics to assess the effectiveness of marketing efforts (39%), importance of integrating marketing efforts into overall firm operations (37%), and technology needs, such as digital marketing platforms and enhanced marketing services (37%).”

The most effective marketing tactics included client referral programs, at 49%, followed by referral partnerships, at 23%. Community involvement (14%) and social media marketing (11%) were also somewhat effective. Podcasts, advertising on radio/TV, and radio (guest speaker or host) were at the bottom of the list in terms of effective marketing strategies.

Respondents said their marketing efforts have been most successful in strengthening relationships with current clients, with 47% saying it’s been “completely” or “very” successful. Meanwhile, 31% said marketing efforts helped to promote their services to prospective clients, and 29% said they helped to secure new clients.

Most advisors (58%) said they had little to no challenge in getting the proper level of support from firm partners as their practices have grown. A third (36%) find it somewhat challenging.

“What advisors want most from their firms in the way of marketing assistance are two things: more effective technology to free time from operations to focus on marketing and a better understanding of the marketing tools available to them,” the report stated. “Half of the advisors who responded (52%) believe the ability to automate routine tasks, which would free their time, would drive growth. In addition, 37% said they would like access to support staff to take on the administrative aspects of their marketing efforts. A significant 41% said they would like greater understanding of the marketing tools available to them.”