Financial advisors may be overly reliant on referrals to grow their practices, according to Ficomm Partners' 2024 report, The Great Marketing Mismatch: 2024 Financial Advisor Growth Marketing Study. The study, cited by InvestmentNews, highlights a disconnect between how advisory firms market themselves and how consumers select their advisors, signaling the need for modernized client acquisition strategies.
The report surveyed 437 financial advisory practices, finding that 45 percent of consumers use digital marketing to select advisors, yet only 29 percent of firms prioritize it. Conversely, 47 percent of firms primarily rely on referrals as their client acquisition method of choice, though just 29 percent of consumers indicate requiring a referral when hiring an advisor.
Demographics appear to drive this shift. Among clients over 60, 60 percent prioritize referrals, compared to only 17 percent of those under 44. Meanwhile, 57 percent of younger consumers strongly favor digital marketing when selecting advisors.
Ficomm CEO Meg Carpenter emphasized that firms must adapt to these changes."Referrals will always be an important channel for growth but as the consumer's buying practices change, financial advisory firms must adapt by integrating strategies that meet consumers where they are," Carpenter said.
Marketing leaders in the financial industry agree. Rajat Deva, head of marketing at Savvy Wealth, thinks that referrals should complement a broader strategy. He highlights the importance of creating value-driven content and using digital marketing tools to enhance discoverability and encourage organic referrals.
Abby Salameh, chief growth officer at RFG Advisory, points out that digital marketing methods, such as paid social ads and webinars, are effective for younger clients, while in-person events and seminars appeal to pre-retirees.
Angel Gonzalez, chief marketing officer at Snappy Kraken, urges firms to prepare for future shifts. "What's working now won't work forever," Gonzalez says, advocating for a hybrid approach that balances referrals with a strong digital presence for long-term success.
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