Marketing remains one of the least enjoyable responsibilities for many financial advisors. Yet a comprehensive new study from The Kitces Report offers a reassuring finding: while growth requires marketing, scaling efficiently means the advisor doesn’t have to carry the full time burden. In fact, the firms that market most effectively are often those where the advisor markets less and the firm markets more on their behalf.
The study, based on a survey of 506 financial advisors and detailed in a 123-page report with over 100 charts, examined which marketing methods advisors use most, which deliver the best returns, and why. Two findings stand out: the low cost and high success rates of online advisor directories and customer reviews, and the importance of developing a client niche. The research covered more than two dozen marketing tactics, including referrals, social media, networking, and traditional advertising.
The High Stakes of Getting Marketing Right
When firms fail to market effectively, the cost of acquiring new clients and revenue can “anti-scale”—rising as a share of revenue instead of falling as the firm grows. Over time, this can make inorganic growth through mergers and acquisitions more economically attractive than traditional marketing. The study notes that the rising cost of organic client acquisition often eventually balloons to the point where M&A becomes the better financial choice.
For advisors familiar with recent inflationary trends, the falling relative costs of marketing may bring some satisfaction. Between this year’s survey and the previous one two years ago, the typical cost of client acquisition (CAC) dropped by a third to $2,551 per new client. The revenue acquisition cost (RAC)—the amount a practice must spend to generate each additional dollar of new client revenue—fell 36% to 70 cents. That means advisory practices are recouping their marketing costs in less than nine months. By contrast, acquiring clients inorganically through M&A often costs 2.5x to 3.5x revenue.
Online Reviews: An Overlooked Opportunity
Only 13% of advisory practices incorporate third-party review sites like Google, Yelp, Wealthtender, and WiserAdvisor into their marketing. The report suggests many advisors are overlooking a meaningful growth opportunity by failing to establish even a basic presence on these platforms.
Among practices that do not use review sites, only a quarter are growing faster than their peers. That compares to 29% of firms that have started collecting reviews and built a business profile on Google, and a third of firms that display reviews on their websites. The latter group spends just 13 cents per dollar of new revenue, while firms doing the bare minimum spend 86 cents. Despite these advantages, adoption of review sites has risen only 5 percentage points since 2024.
Wealthtender CEO Brian Thorp attributes the slow uptake to compliance policies at large firms, state-level regulation, and even an “imposter syndrome” fear of negative reviews. He predicts more firms will embrace online reviews, especially as consumers increasingly check reviews before hiring professionals. “Would you hire a doctor, lawyer, or even a plumber without reading their reviews?” Thorp said. “They appreciate the referral they receive from somebody they trust, but they want to see if other people agree with their opinion. It’s just a gamechanger.”
Most Popular Marketing Tactics and Their Effectiveness
The 10 most commonly used marketing methods among surveyed advisory practices are:
- Client referrals (88%)
- Centers-of-influence referrals (64%)
- In-person networking (46%)
- Social media (36%)
- Search-engine optimization (32%)
- Newsletters (31%)
- Client appreciation events (30%)
- Blogging (27%)
- Seminars (23%)
- Online advisor directories (18%)
At least 58% of firms drew at least one new client from their marketing last year. The most costly efforts among the largest firms created an average acquisition cost of $16,925 and a revenue acquisition cost of $2.01.
Here are the revenue acquisition costs per dollar for the 10 most popular methods:
- Client referrals: $0.34
- Centers-of-influence referrals: $0.72
- In-person networking: $1.45
- Social media: $4.88
- Search-engine optimization: $0.45
- Newsletters: $4.14
- Client appreciation events: $4.54
- Blogging: $1.64
- Seminars: $1.76
- Online advisor directories: $0.28
The report emphasizes that sustaining cost-effective organic growth requires keeping advisor marketing time under control. “What distinguishes the most efficient firms is not that they market less, but that they become progressively less reliant on (increasingly expensive) advisor time as they grow,” the report states.
Smaller Firms Spend Proportionally More on Marketing
The typical advisor deployed just 5 out of 26 different marketing investments identified in the report. On average, firms invested 7% of annual revenue in marketing and saw an 8% bump from incoming business and 10% in new clients. Among practices achieving standout growth, organic revenue growth reached 29% and client growth 16%.
Bigger Firms Spend More to Win Bigger Clients
The value of advisors’ time is likely driving industry consolidation. Because marketing investments have an anti-scaling nature, the high cost of advisor hours continually adds to the cost of winning new clients. This forces firms to serve increasingly affluent clientele as they grow, which further undermines marketing outcomes because pursuing higher-dollar clients increases acquisition costs even more. The end result: the anti-scaling nature of advisor time costs can drive organic acquisition costs to levels comparable to M&A, unless firms restructure their growth engines as they shift from solo practices to multi-advisor ensembles.
For High-Growth Firms, Referrals Aren’t the End-All
Client referrals (88%) and centers-of-influence referrals (64%) are the two most used marketing methods. But they represent a key difference between high-growth firms and their slower-growing peers. High-growth firms receive only a third of their new client revenue from either type of referral, while slower-growing firms generate 80% from them.
High-growth firms tend to be less reliant on referrals and more reliant on tactics they control. Over time, clients exhaust their networks of potential prospects, and after a decade or more, many obvious referral opportunities have already been tapped.
Estate Attorneys and CPAs Are the Most Popular Centers of Influence
Among advisors using centers of influence (COIs), the typical practice receives most referrals from just two sources: CPAs (used by 89% of advisors utilizing COIs) and estate planning attorneys (79%). However, the type of COI that most clearly distinguishes high-growth firms is the use of target market-specific COIs—for example, an influential doctor in a hospital the advisor is targeting as a niche. Thirty-seven percent of high-growth practices use them, versus 21% of others.
Referral Quantity Doesn’t Always Mean Quality
Advisory practices that receive referrals from custodians were most likely to receive them through Charles Schwab and Fidelity Investments. CPAs, former employees, clients, and attorneys were the most common traditional paid solicitors of client leads, while Harness Wealth, Datalign, and Wealthramp were the most frequently cited digital ones. Advisors considering solicitors should account for the time needed to build relationships and educate the solicitor to ensure quality referrals.
High-Growth Firms Use Third-Party Review Sites and Online Advisor Directories
Online directories maintained by the CFP Board, the National Association of Personal Financial Advisors, the Fee-Only Network, and XY Planning Network represent the most cost-effective marketing investment covered by the report. Subscription fees are modest relative to the revenue of even a single client, and they require relatively little advisor time. Third-party review sites also exhibit an impressively low cost compared to their return in revenue.
Despite tending to generate less profitable clients, these tactics are extremely efficient. High-growth firms are substantially more likely to utilize both tactics, and their modest upfront cost makes them popular for newer Stage 1 practices to accelerate growth before they are large enough to generate clients from existing-client referrals.
Some Firms Take a Hands-Off Approach to Review Sites
More than half of advisors who use third-party review sites proactively encourage clients to leave reviews, with Google the most common outlet. However, only 16% of clients among the median participating firm actually followed through and left a review. Among advisors using review platforms, 34% incorporate reviews or testimonials on their website, while just 18% display ratings. High-growth firms are slightly less likely to display testimonials (25% versus 29%) but nearly twice as likely to display ratings (13% versus 7%).
Where Advisors Spend Their Valuable Time Networking
In-person networking is the third most common marketing strategy. Because networking is indirect, advisors must choose their marketing “location” well. Advisors are more likely to resonate with prospects if they speak to topics and issues relevant to them.
Financial Advisor LinkedIn Is Hot, X Is Not
Social media carries exceptionally poor economics due to its high reliance on advisors’ time, making it the least efficient of all marketing tactics. The data reveals that reducing advisor time by at least partially offloading these tasks to centralized support makes the tactic more cost-efficient. Completely outsourcing social media marketing creates the lowest RAC by far ($0.45), compared to $4.17 for partially outsourced and $1.77 for entirely self-sufficient strategy. This suggests a sweet spot between using an external team’s expertise and the firm’s voice and priorities.
Where Firms Are Spending Their Advertising Dollars
Even though only around half of advisory practices said they gained a client last year from advertising or sponsorships, these remain a remarkably efficient means of acquiring new revenue. While advertising may not generate large numbers of high-value clients, its relatively low demands on advisor time allow it to remain a cost-effective contributor to growth in target markets—even if that’s just being more visible in the local community through sponsorships.