The stats are from a new report from Boston Consulting Group, which reveals that just 28% of wealth manager asset growth over the past decade came from existing advisors, falling to 22% in mature markets such as North America.
While gains have been seen though M&A, market performance, and advisor recruitment, the report warns this can no longer be relied upon. Bull markets have softened, M&A integrations are complex and costly, and experienced advisors are in short supply, with nearly half of new hires failing to deliver on their initial business case.
This highlights a critical need for financial advisors to focus on cultivating organic growth from within their existing client relationships and through new client acquisition.
“What defines winners today is no longer exposure to market performance or the ability to poach senior bankers, but their ability to grow from within,” said Michael Kahlich , managing director and partner at BCG. “Firms that deliberately invest in advisor enablement, brand identity, and next-gen client strategies are outperforming peers – not just in revenue, but also in valuation multiples.”
But the report shows that many advisors, especially in mature markets, are less focused on new client acquisition, often due to sizable existing books and compensation structures that don’t sufficiently incentivize incremental growth.
