Advisors better not give up on organic growth even if M&A stays hot

There is no doubt that firm-level M&A will continue to make headlines. It’s splashy, showy, even downright sexy to read about a wealth management firm being purchased for millions or tens of millions of dollars.

That said, those flush PE-backed firms are not paying big fat EBITDA multiples for RIAs that don’t do the critical – and perhaps less exciting – work of driving expansion through organic growth. In fact, some might say this key aspect of the business has fallen out of favor with advisors over the last several years who are sitting back awaiting big paydays.  

Some. But not all.

Chris Cooper, president and financial strategist with Serenity Wealth, for one, does not think organic growth has taken a backseat so much as a lot of advisors have been pulled toward things that “sound faster” like a better platform or a new AI tool. In his view, most advisors are busy serving clients and running a business, so they do not have time to evaluate every new promise coming at them.

The bigger issue, says Cooper, is that organic growth usually comes from the less flashy work, which entails staying visible, communicating consistently, and building trust over time.

“The basics still matter most. Be clear about who you serve, have a strong online presence, communicate regularly, and make it easy for people to understand what you do and who you do it for. Create opportunities for introductions, people don't just refer naturally, you have to provide the framework,” Cooper said.

Added Cooper: “What has changed is that the technology is better, so it is easier to do those things consistently without spending all your time on marketing. That is where I see the biggest value. Not in chasing every new lead gen pitch, but in having the right systems in place so you can stay in front of clients and prospects in a way that feels professional and personal.”

Nate Angelo, CEO of Composition Wealth, meanwhile, believes organic growth has been slowing in the advisory industry for years, not just in the recent past.

“This industry was built on the backs of advisors who were trained to consistently cultivate prospects, work those prospects through a clear process, and invest heavily in the client base they created. Advisors were constantly in front of their clients: personal meetings, dinners, coffees, phone calls—both to serve those clients and build a referral network. This art has been lost over the years,” Angelo said.

The influx of private equity has not changed this dynamic, according to Angelo. He points out that many of the private equity firms are partnering with RIA leaders to create new guidelines for increased client activity to drive organic growth.

Angelo highlights a trio of factors that have changed the trajectory of organic growth across the RIA space. First, the demographics of the advisor base, where advisors who were trained in well-constructed wirehouse and broker-dealer training programs are now closing in on retirement or have retired. Second, the RIA space has become more dependent on referral programs and similar tools, instead of investing in ongoing training and development for the next generation of advisors on sales/growth. 

Additionally, he notes that a generation of advisors who have inherited or acquired existing practices and have created lifestyle businesses from practices that were once growing.

“I’ve found that engaging clients in an experience-based model that puts their unique needs, wishes, and wants at the center of your expertise and surrounding them with a team of experts that can help them navigate life, both the planned and unplanned, are critical. Remember, it is often the value an advisor adds outside of the investment portfolio that creates referrable moments,” Angelo said.

The combination of creating a referrable experience for clients with targeted and bespoke marketing is the ultimate organic growth formula, according to Angelo.

That said, for those who are not inclined to invest the time and effort into cultivating their own organic growth muscle, Angelo recommends partnering with various referral programs.

“This puts your success squarely on the shoulders of others who can provide an advisor base with referrals through various channels,” Angelo said.

Finally, Rob Bondiman, head of advisors at VestGen Wealth Partners, is adamant that organic growth has not disappeared. It has taken a back seat to other priorities in his opinion, most notably the industry’s focus on succession, acquisitions, and technology transformation.

“Over the past several years, firms have invested heavily in recruiting advisors, integrating new teams, and implementing new systems. Those efforts require significant attention, and as a result, focus often shifts toward managing what has already been acquired rather than consistently building new relationships,” Bondiman said.

At the advisor level, this shows up clearly, according to Bondiman. More time is spent servicing existing clients, while proactive outreach and prospecting become less consistent.

He adds that growth has also leaned more on market performance than new client acquisition. And in many cases, compensation structures have not been clearly aligned with organic growth behaviors.

“Organic growth does not happen passively. It requires a defined process, consistent activity, and accountability. Without that alignment, it will continue to fall behind competing priorities,” Bondiman said.

Stressed Bondiman: “The fundamentals of organic growth have not changed. Execution has. Growth still comes down to consistent prospecting, a clear value proposition, strong client conversations that lead to referrals, and disciplined follow through. The core activities remain the same. What has evolved is how firms systematize and scale those activities.”