pricing model. Sixty-nine percent of those with investable assets of more than $ 1 million( outside of qualified retirement accounts) worked with an advisor.
This should be great news for those advisory firms ambitiously looking to grow. In our surveys of firms, we typically find that they target 10 % organic growth net of market growth but achieve only 3 % to 7 % new asset growth and only 8 % to 9 % increases in client number.
Yet the chance to attract more clients is clearly there. Of all the investors we surveyed, 8 % said they are“ very likely” to proactively look for a new financial advisor in the next two years, and 12 % say they are“ likely” to do so. We refer to those groups combined as“ active shoppers,” and though you can find them in every demographic group, the most active ones are between the ages of 41 and 56, have investable assets between $ 1 million and $ 5 million and are corporate executives or business owners. The groups less likely to seek a new relationship are those older than 57, those in retirement or living off family wealth, and those with investable assets under $ 500,000. Women are also slightly more likely to seek an advisor.
How about those clients already working with an advisory firm? As it happens, those using large firms( of more than 1,000 advisors) are more likely to be shopping around, while the clients of smaller and midsize firms are more loyal.
Friends Matter Most
When investors begin their search for a new advisor, they start by asking friends and family. Twenty-five percent of active shoppers rely on that method. However, 12 % look for a brand name( because marketing works— in fact it works very well). Eleven percent of investors start with their own internet research, and the same number ask their CPAs for recommendations. Many investors also begin their search through their retirement plans.
In other words, all of the avenues for reaching consumers are open. But referrals are the best highway. Fifty-seven percent of investors who work with an advisor say they have referred someone in the last two years, which means your current clients are a precious source of opportunity. Of those clients who have made a referral, 90 % say they are likely to do it again.( Even among those who haven’ t made referrals, 78 % say they are likely to make one.)
Love … And Its Cousin, Criticism
There’ s an interesting quirk of referrals: Clients who praise their advisors are also the most likely to criticize. Those who refer praised their advisor in 32 % of their recent conversations. However, among the same group, 7 % also criticized their advisor. Business owners praise at a 33 % rate but also criticize at an 11 % rate.
Evidently, the same relationships that spur positive emotions can also create negative ones. In fact, 21 % of those who have referred someone to their advisor in the last two years are also either“ likely” or“ very likely” to hire another advisor. It may be that loyalty and engagement have a more complicated relationship than we think. Referrals may be a sign of connection but certainly should not be construed as loyalty.
Why They Come And Why They Stay
When investors search for an advisor, they plan to interview only up to three firms. Only 11 % of active shoppers say they will consider more than that. In a previous survey, we also found that investors planned to interview up to three firms but in reality spoke to only one or two.( This shows you how much you need to stand out. If you’ re number five on the list of firms to interview, you might as well be No. 405.)
Advisory firms keenly listen to their clients. However, when they go to market to prospective clients they suffer from what scientists call“ the curse of knowledge.” They tend to emphasize their service and expertise when speaking about themselves. They tend to speak about“ comprehensive plans,”“ fiduciary advice,”“ bespoke strategies” and“ risk tolerance.” Some words land, but many confuse the investors, who aren’ t sure how these great sounding terms apply to them. They might not know what“ align- ing their wealth and passions” means, they just know they have to fund their daughter’ s private school and help out a grandmother in declining health. The tool is not as important as what needs doing. As Harvard professor Theodore Levitt once said,“ No one needs a quarter-inch drill. What people need is a quarter-inch hole.”
What Active Shoppers Want
Those who are actively looking around for advisors want many services, but some items stand out:
• They want education for themselves and their family— 35 % make it a priority.
• Shoppers are also much more intrigued by exclusive investment strategies, something 27 % are searching for.
• Finally, 38 % of shoppers want tax services.
If you want to catch the attention of prospective clients, you have to focus on their needs, not yours, and it will likely start with something specific. For example, your relationship with your doctor likely started because you were sneezing or bleeding or otherwise hurting— and the doctor fixed it. It might have then evolved into a more holistic form of care, but it still started with that one need.
What We Should Talk About
Active shoppers still prefer an in-person meeting, but many of them are comfortable with online conferencing and calls. Twenty-nine percent prefer to meet in person and 25 % on Zoom( and 24 % like phone calls). Older consumers( over age 56) are much more likely to seek in-person meetings, but even the younger active shoppers prefer them.
When researching advisors, all potential clients seek the same basics— information about a firm’ s financial planning approach and investment philosophy. They also want the pricing information.
Active shoppers, however, get much more specific than those only browsing:
• They have much higher interest in information specific to their own professions and careers( doctors or business owners, for example, might want advisors catering to their fields).
16 | FINANCIAL ADVISOR MAGAZINE | MAY 2025 WWW. FA-MAG. COM