Advisory firms that invested in structured marketing and referral strategies achieved stronger client growth than their peers, according to research highlighted by InvestmentNews.
The RIA Signals Report by Paithos Research analyzed Form ADV filings from more than 14,000 SEC-registered investment advisers and identified several common characteristics among firms that expanded their client base by at least 10 percent during fiscal 2025.
According to the report, firms with the strongest client growth were significantly more likely to incorporate client testimonials into their advertising. Approximately 15.2 percent of high-growth firms used testimonials, compared with 7.4 percent of firms whose client counts remained flat or declined. Among firms focused on serving retail and high-net-worth investors, the difference remained pronounced, with 17.9 percent of growing firms using testimonials compared with 9.2 percent of firms that experienced little or no client growth.
The report also found that successful firms more frequently compensated third parties for client referrals. According to InvestmentNews, 28 percent of firms with at least 10% client growth paid for referrals, compared with 21.1 percent of firms that failed to meaningfully expand their client base.
Separate benchmarking research conducted by Charles Schwab reached similar conclusions. InvestmentNews reports that top-performing advisory firms generated stronger asset growth by combining acquisitions with referrals from centers of influence, referrals from existing clients, and other marketing initiatives.
Charles Schwab also found that firms with documented referral strategies consistently outperformed those without formal business development plans. More than half of the top-performing firms maintained a structured referral plan for existing clients, while more than one-third had a formal strategy for obtaining referrals from centers of influence.
According to InvestmentNews, firms with documented client referral programs generated 1.5 times more referrals from existing clients than firms without such plans. Firms with business partner referral strategies generated 1.6 times more new clients through referrals from centers of influence.
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