5 proven client acquisition strategies for advisors and RIAs

For advisors seeking to increase assets under management (AUM) — and let’s face it, that’s most of you — the surest path to growth requires one thing: new clients.

It’s possible to grow AUM by going deeper with existing clients, or picking great investments and letting the market do the work for you. But many advisors have already maximized wallet share with existing relationships. That leaves new clients as the biggest input into the practice growth equation. 

And it takes more than waiting for referrals to turn up on the doorstep. According to Capital Group’s Pathways to Growth: 2024 Advisor Benchmark Study, the highest growth advisors are much more like to employ an active and repeatable process to acquire new clients.

In the more than two decades I have spent working alongside advisors, I have seen firsthand the success of advisors that have client acquisition processes in place. I’ve identified five strategies that have proved most effective for winning new clients:

1.      Find riches in the niches

2.      Ask better questions to tell a better story

3.      Make the most of your marketing

4.      Get creative and strategic with events

5.      Rethink your approach to referrals

1. Find riches in the niches
 

At the start of their careers, advisors typically cast the widest possible net to get new clients. But as your practice matures, your focus may narrow and gravitate toward specific client types, life stages, areas of expertise, or professions and companies (e.g., doctors, academics, government employees). Targeting a particular client type or segment enables you to hone your service offering and can form the centerpiece of a compelling prospecting and marketing strategy.

For some, that focus turns into exclusivity, and they become niche players. But while “going niche” may sound like “going small,” for many it’s just the opposite. According to a 2022 study by Michael Kitces, advisors who pick a niche earn 12% more than generalists who don’t target select groups for marketing.¹ Another Kitces study found that, among those advisors who have a niche, the top 10% can earn 67% more than the top 10% of advisors who don’t.²

One of the most successful strategies I’ve seen came from an Atlanta-based practice where the team made the strategic decision to focus exclusively on business owners. They were so committed to this decision that they turned away ultra-high net worth prospects that weren’t business owners, because those clients didn’t fit their ideal client profile.

The team believed that a laser focus would enable them to better serve their clients and translate into long-term practice growth. And it worked: The practice grew from almost nothing to $700 million in AUM in just two to three years.

It’s also important to consider that some niches may be hiding in plain sight within your book of business. Another advisor I know decided he wanted to focus solely on female clients. They were among his favorite clients because, in his experience, they were more engaged, more appreciative, and more likely to make referrals. So he honed his approach accordingly and now works almost exclusively with women.

Take a look through your book to see if there’s a similar opportunity to narrow your focus.

When weighing the opportunity, consider the size of the market, your access to it and your ability to serve it. Additionally, consider whether there’s great potential for referrals in a given niche, which may make it more attractive.

Go deeper:

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2.  Ask better questions to tell a better story

Active listening is crucial to what you do as an advisor. But asking the right questions can amplify the value of what you hear. Thoughtful questions not only elicit insights you can use to tailor investment solutions, they can position you to share your value proposition with prospects.

Consider the strategy employed by a high-growth advisor I once worked with. He had three questions he would ask when talking with prospective clients who were already working with an advisor:

“Do you know your exact, all-in cost of advice AND investment management?”

“What exactly do you receive in exchange for the fees you pay?” 

“What are you trying to accomplish with your investments?” 

Although asking prospects pointed questions about how much they currently pay for advice may feel uncomfortable, the goal is to get people thinking while creating an opening to delineate the services his firm provides.

I also think it’s important to ask questions of yourself. What do you want to take credit for? If your clients were to say, “I chose my advisor because of these three to five things,” what would you want those things to be? The answers can help inform how to talk about yourself to clients and prospects.

Use those answers to build a statement of purpose — a burst of precision that explains exactly what you do in one or two sentences. Your statement should be straightforward but also inspire someone to say, “Tell me more!” For example, “I take care of doctors so they can focus on taking care of their patients” or “You know how some people have a dream retirement in mind? I help make those dreams a reality.”

Go deeper:

How to have better client conversations

The power of storytelling

3. Make the most of your marketing

“Marketing” (with a capital “M”) can feel like a set of skills outside the average advisor’s core competency, but having even some skill can help boost growth. Indeed, in our Pathways to Growth study, marketing emerged as a high opportunity area for advisors. For example, results showed high-growth advisors were 82% more likely than their lower growth peers to have a written marketing plan. But interestingly, the absolute number of those who had such plans remained stubbornly low, at 32%.

Similarly, marketing budgets are also low. According to findings by global tech firm Broadridge, chief marketing officers report an average marketing spend of 8.7% of their company’s revenues, while advisors spend a much smaller 3.1%.³ But what’s important is less about the amount you spend, and more about focusing your time, effort and money in areas that make the most sense. 

Determining how and where to focus marketing efforts may depend on whom you are targeting. For example, if your ideal client or niche is part of an affinity group that’s dear to you, your time and effort is best spent focusing on weekend activities related to that group.

On the other hand, if you are focused on employees working in a certain field or corporation, you may spend more time and effort trying to attract their attention on LinkedIn. If you are targeting specific client segments, events and industry conferences may be particularly fertile grounds for prospecting.

Go deeper:

5 digital marketing strategies for financial advisors

How to reach high net worth prospects on LinkedIn

4. Get creative and strategic with events

Filling up your events calendar is generally a great way to create opportunities to find and engage new clients by getting you out of your office and your routine. A robust events calendar can put you in front of more people you’d like to serve and expand your networking circles.

Putting it on the calendar

Getting out of the office and into more events can be well worth the effort. Here are examples of client events you might consider throughout the year, and how they might fit into your typical month.

Events you host can be even more memorable if your speaker lineup goes beyond the usual suspects (such as tax experts or estate planning attorneys typically featured at such functions). In my experience, it’s the less orthodox speakers who have clients eagerly awaiting their next event invite. For example, an advisor I know hosted an event where the guest speaker was a luxury travel agent. The agent shared travel ideas grouped into categories like bucket-list destinations, still undiscovered (but not for long) spots, and more exotic, off-the-beaten track opportunities.

Importantly, the advisor was there to talk through the viability of these trips — for example, whether it’s in the budget to fly first class. The event gave clients “permission” to act on long-standing ambitions to travel. And the travel agent, who is constantly in contact with high net worth individuals, became a source of referrals.

Another advisor I know hosted a college admissions seminar for parents of high school students, where the guest speaker was a former admissions officer at a prestigious liberal arts college. Open to clients and nonclients alike, the discussion provided a valuable service and a lead-in to additional conversations about higher education savings as well as other personal and family goals. 

Go deeper:

Top ideas for client events and how to make them great

How to hold prospecting seminars that turn investors into clients

5. Rethink your approach to referrals

Referrals are by far the leading client acquisition source for advisors, accounting for nearly 85% of new clients according to our 2023 Pathways to Growth study. While many of these may be organic referrals that come without effort, having a strategy for getting and giving referrals is a more effective way to drive growth. I believe there are three keys to a successful referral strategy: client recommendations, centers of influence (COIs) and advisory boards.

When it comes to client referrals, I have seen many referrals come from new clients within their first year of becoming a client. That’s why your onboarding experience is so critical. New clients who have an excellent initial experience may be more likely to refer your practice. Don’t quit seeking referrals from long-tenured clients, but consider shifting your focus to more actively seek referrals from those who recently joined your practice.

Also consider that an important part of any referral strategy involves equipping clients to share your story with others. With that goal in mind, there are a few things to focus on. First and foremost, the story should be personal. The takeaway isn’t “My advisor helped me amass a retirement nest egg and optimized the retirement income stream it generates.” Instead, coach clients to share how you’ve helped them: “My advisor helps turn my weekdays into weekends and simplify my life beyond investing.” Whatever the case, using questions to help create this “referral story” can be a valuable exercise for defining and differentiating your practice.

Another key referral tactic is forging relationships with centers of influence (COIs) – financial professionals who intersect with your ideal clients. But while alliances with accountants and attorneys can be invaluable, I have seen advisors do just as well by expanding the universe of professionals centered around the client. For example, realtors, business coaches and divorce mediation specialists may be fruitful depending on your niche.

More and more, however, advisors are building lasting referral relationships through advisory boards. Just as corporations have boards of directors to help set strategy, advise on management and consider new ideas, an advisory board is a team you can lean on for guidance, insights and recommendations on improving your practice. It may consist of your biggest cheerleaders (including a few long-term clients), as well as other professionals you trust. Even if you and board members only commit to two meetings per year, it’s a great opportunity to share the latest news and ideas from your firm and get feedback on near-term goals.

Go deeper:

Why you need an advisory board, and how to create one

The benefits of having a niche and an advisory board, with Ray Evans

Being intentional about client acquisition takes work and planning. But it’s not all-or-nothing. You can start small, integrating these strategies over time. Whether you’re focusing on niches, formulating thoughtful questions designed to highlight your value, putting together a simple marketing plan, getting creative with events, or finding advocates among your clients and peers, committing to one or more of these proven strategies can put you on the path to above-average growth.