Why organic growth is declining – and what to do about it

Organic growth has been the backbone of successful advisory firms for decades, but the latest data shows it’s becoming harder to achieve.

Client referrals, once the dominant driver of new business, have declined a steep 23% over the past five years, and many firms are struggling to fill the gap. Meanwhile, the fastest-growing RIAs are adapting, shifting from passive referral dependence to intentional marketing, client experience, and talent strategies that fuel sustainable growth.

The reality? Growth is no longer accidental. It’s a formula driven by time, investment, and strategy.

The growth divide: What top firms do differently

One of the most striking differences between top-growing RIAs and their peers is where they spend their time and resources.

Top advisors spend 25% of their time on growth while the rest:  

• 10-12% of their time on business development and marketing, compared to 4-5% for average firms
• 3-5% of revenue on marketing and growth initiatives, while most firms invest 1-2% or less
• 2x more effort on formal client experience strategies, leading to greater share of wallet and referrals 

Put simply: High-growth firms prioritize and invest in growth.   

What’s replacing referrals?

Referrals may still be king, but they’re in sharp decline. Competition is rising, client loyalty is shifting, and younger generations rely more on digital experts, online reviews, and social proof than word-of-mouth recommendations. This trend will accelerate, so expect the traditional referral channels to continue their descent.  

The firms that are successfully replacing lost referral volume are doing three specific things:

1. Strategic Marketing – The days of relying solely on personal networks are limited. RIAs investing in SEO, digital content, and email marketing are acquiring 30% more inbound leads.
2. Client Experience as a Growth Engine – Firms that systematically collect client feedback and refine their service models see 26% more new client assets compared to those that do not.
3. Talent Development & Delegation – Growth-focused firms don’t expect advisors to do it all. They leverage advisor time with standardized service models, specialized staff support and expand their firms to include business development specialists to free up advisor capacity.

Why many firms are stuck

As a result of these trends, a growing number of firms are struggling to grow. The most common bottlenecks:

• Over-indexing on service, under-indexing on growth  - being in the day-to-day weeds keeps advisors from optimizing client value and capacity (aka revenue per advisor) or investing time in growth.

• No formal growth plan – 55% of firms without a documented growth strategy report stagnant revenue.

• Technology adoption – Firms using technology to deliver deeper services, systematize service models, and leverage AI-powered tools grow 28% faster than those relying on manual processes. 

Organic growth isn’t gone – it’s just evolved

The firms that thrive will be those that systematize services, leverage technology, and free up advisor capacity to deliver a more specialized client experience - the growth currency of the future.

If you’re intrigued, you can download my Growth Readiness Assessment to identify where your firm can accelerate growth.