Your AUM went up last year.
Congratulations to the S&P 500.
Paithos Research went through Form ADV filings from more than 14,000 RIAs. Median assets grew 14.5% in fiscal 2025. The S&P returned 17.9%.
Median client count grew 2.1%.
Nearly a third of those firms grew assets without adding a single reported client.
Same article, different study: The Ensemble Practice put 2025 organic growth from new client relationships at 3.7%. The lowest number in ten years of their data.
So the market did the work and everybody feels fine.
Until the market has a bad year and everyone finds out how much of that growth was actually theirs.
If you want AUM the market didn't hand you, you need new clients. If you want new clients at a pace YOU control, you need paid traffic.
Paid traffic just means paying Facebook, Instagram or Google to show an ad to people who look like your best clients, whether or not they've ever heard of you. Somebody sees it, recognizes their situation, and asks to talk to you.
That's what my agency does. We run those ads for advisors and put meetings with prospects on their calendars.
Here's the case for it, including the parts that make advertising look bad.
The well runs dry
Ask an advisor where new clients come from and you'll get one word.
Referrals.
They're right, as far as it goes. In the 2026 Kitces marketing study, 88% of advisors use client referrals, and referrals are one of the cheapest ways on the whole list to bring in new revenue.
The problem is you can't turn them up.
The founder says, "Our clients love us. Ask for more referrals."
The advisor says, "I asked. Twice. At the review meeting."
The client says, "I already sent you my brother-in-law."
Michael Kitces put it plainly this fall: "the well just goes dry and they referred all the people they know from their personal network."
His own report shows it. Among actively growing practices, referrals add 11% to new client growth at firms under five years old. At firms 20 years and older, it's 2.6%.
The report even has a name for where most firms end up. The "referral coasting zone." A few referrals trickle in, the market tacks on a strong year, growth feels like enough, and nobody builds anything else.
And in the report's own words, generating more referrals "isn't possible by just 'turning up the dial'."
Now look at who's actually growing.
Firms in the top third for organic growth get about a third of their new client revenue from client and COI referrals. Everyone else gets about 80%.
The fastest growing firms lean on referrals the least.
I see a version of this in almost every high-ticket service business I work with. Word of mouth gets them to a comfortable plateau, and then they spend a couple of years wondering why it's flat.
The other faucets are closing too
Custodian referrals used to be a decent backup.
The Schwab Advisor Network's referral minimum was $500,000 until this year, when it went to $2 million. On January 5, 2027 it goes to $5 million.
If you serve the mass affluent, that faucet is off. One recruiter told InvestmentNews: "everyone's fighting for less."
Meanwhile a LOT of money is about to change hands.
Cerulli says 35.3% of advisors expect to retire within ten years. Between them they hold about $14.5 trillion.
Cerulli also found that more than 70% of heirs are likely to fire or change advisors after they inherit.
Those clients and their kids are going to go looking. And fewer of them start by asking a friend.
In a 2026 survey of 1,000 advised investors by Ficomm Partners and Absolute Engagement, half of the respondents with $5 million or more said no referral played any role in finding their current advisor. Under 45, it was 59%.
Your next client might never meet one of your current clients. They have to find you some other way.
Ads already cost less than the average tactic
Same Kitces report. Advertising and sponsorships cost $8,406 per new client. The average across every tactic they studied was $16,925.
Per dollar of new annual revenue, ads cost $1.31. The average was $2.01. The report calls advertising "a remarkably highly efficient means of acquiring new revenue."
The reason is advisor time. Only 23% of what advertising costs is the advisor's own hours. Across all tactics it's 60%.
Claude Hopkins worked this out about a hundred years ago: "Advertising is multiplied salesmanship. It may appeal to thousands while the salesman talks to one."
Your seminars and your COI lunches run on the same scarce thing. You. An ad keeps running while you're sitting in a review meeting.
And only 15% of advisors use advertising at all.
Of the money they do spend, 47% goes to sponsorships. Just 28% goes to digital ads of any kind.
So when an advisor tells me "we tried advertising," there's a decent chance they mean the logo on the Little League outfield fence. 🤷
BUT!
Kitces is upfront about the catch, so I will be too. Only about half the practices that advertised got even one client from it last year. And those clients brought in about $5,000 a year in revenue, versus $11,087 for the average new client.
That $1.31 is per dollar of revenue, though. The smaller clients are already baked into it, and ads STILL came out cheaper than the average tactic.
Then look at who made it work.
Advisors who won clients through paid advertising spent LESS (median $8,330) than the ones who didn't ($12,625). The winners put nearly twice the share of their budget into digital, 25% versus 13%.
So the size of the budget mattered less than where it went.
Same channel. Same platforms. Half the advertisers got clients and half got nothing.
The difference is who's running your ads, and what they do before they spend your money.
Half of them picked wrong
Here's what the losing half looks like from the inside.
An advisor told me about the two lead-gen firms they'd hired. (A lead-gen firm runs ads on your behalf and sends you the people who respond.) They knew their numbers cold. Roughly 450 prospects responded to the ads. 60 booked a meeting. 20 actually showed up. About $2.5 million in new AUM came out the other end.
Sounds fine until you hear the rest.
They were paying for the no-shows. A lot of the people who did show were do-it-yourselfers or had $50,000 or $100,000 to invest. And the math was brutal: "I was cashflow negative... I wouldn't be cashflow positive until like month 18."
They never owned the ad account either. "I was just giving the ad agency the money."
So they shut it all off. Every dollar of outside ad spend.
That's how a good channel gets a bad name. 🤷
Before you sign with anyone, ask:
- What am I paying for? Some agencies charge for clicks (someone tapped your ad), some for leads (someone typed in their name and email), some for booked meetings whether or not the person shows. All of those pay them for activity. Pay for qualified people who actually sit down with you.
- Whose ad account is it? The ad account is where the ads run from, and it holds the record of everyone who ever responded. It should be in your firm's name. If you leave, it stays with you.
- What do you test before you spend real money? If the answer is "we launch and optimize," which means they start spending and adjust as they go, your budget is their test.
- Where does the ad copy come from? It should come from your market, not a template they run for every advisor they work with.
- What happens if it doesn't work? If all of the risk sits with you, they don't need it to work as badly as you do.
That fourth question matters more than it sounds.
We run ads for a retirement planning firm right now. We've tested well over a hundred statements about what their prospects want and what worries them.
The topics advisors tend to think matter most came in near the bottom. Inflation, long-term care, legacy.
The winner was permission. People who saved for decades and can't spend it without feeling like they're making a mistake every time they make a withdrawal.
Nobody guesses that from a template. You find it by testing in that firm's market, with that firm's prospects, before the real money goes in.
"Compliance will never approve this"
They may approve more than you'd expect.
Since November 2022, the SEC's Marketing Rule has let advisers use testimonials and endorsements, as long as the required disclosures are there.
The Paithos data from earlier found that firms growing their client count 10% or more were about twice as likely to use testimonials in their advertising as flat firms. 15.2% versus 7.4%.
You also don't need a single performance claim. A good ad for an advisor sells a conversation, usually a guide or a short meeting about one specific decision.
Send every ad to your CCO before it runs. They'll have notes. That's normal.
How we run it for advisors
Advisors can't just throw ads up and hope something works.
They have to be very cognizant about THEIR specific offer and THEIR specific audience.
In our agency, before real money goes behind any ad, we test. We write a handful of short ads, each describing your prospects' problem a different way, and run them for a few days on a small budget. The ones YOUR prospects actually respond to tell us what YOUR market cares about. Then we put the real money behind those.
This is a very easy way to understand what's proven to work for YOUR firm, not for what worked for somebody else's...
Then only deploy ads that follow that thread...
So your advertising is more effective and you're getting more clients, and more AUM, than the few other advertisers in your market.
You will literally be taking their market share.
What that looks like from your side of the desk
If you've never run an ad, here's what actually happens once the testing tells us what works.
Picture someone about two years from their last paycheck. They're scrolling Facebook after dinner.
1. They see an ad that sounds like their own thoughts. Not "comprehensive wealth management." Something like the line that won the testing: "I want to finally start spending what I spent most of my life saving without feeling like I'm making a mistake every time I pull from my portfolio." They stop, because nobody has ever said that to them out loud.
2. They tap it and land on one short page about you. Not your website's homepage. Your homepage was built for people who already know you, like a referral checking you out before the first call. A stranger needs something simpler. Who you help, what the first meeting is, what happens in it, and what it costs them (usually nothing). Nobody books time with someone they just met unless they know exactly what they're agreeing to.
3. Before they can book, they answer a few quick questions. Roughly how much they have saved, how close they are to retirement, what they want help with.
Remember the advisor paying for no-shows and $50,000 accounts? This step is what prevents that. If your minimum is $500,000 and someone has $80,000, they never see your calendar. You don't spend an hour of your week finding that out across the table. They go on a list you can come back to later, if you ever want to.
4. If they're a fit, they pick a time on your calendar right there. No phone tag. No email back-and-forth.
5. They get reminders before the meeting. By email and text, automatically. People who booked a stranger off a Facebook ad forget. Reminders are a big part of the difference between a booked meeting and a held one.
6. You sit down with someone who already raised their hand. They read about you. They told you what they have. They picked the time. It's a different first meeting from a cold name on a list.
Two more things you should know, because they're where advisors usually get burned:
You own all of it. The ads run from an account in your firm's name, and the information about everyone who responded lives there too. You pay Facebook directly, on your own card. If we ever part ways, all of it stays with you. That advisor who was "just giving the ad agency the money" walked away with a spreadsheet and nothing else.
You pay us per qualified meeting. Before we start, you and I write down what "qualified" means for your firm. You pay us when someone who meets that bar sits down with you. Not for clicks, not for names, and not for anyone who doesn't show.
If your AUM chart and your client count chart don't look anything alike, book a strategy call with me. You tell me where your clients come from now and what one is worth to you. I'll tell you honestly whether ads make sense for your firm. If they don't, I'll say so.