Advisory firms with “the strongest organic growth are more likely to consistently execute on referral development, accountability and hiring practices,” according to the findings of a new study released on Tuesday by AssetMark.
Execution and business development infrastructure success by advisors is a better predictor of advisor firm growth than strategic plans, AssetMark said, pointing to that as one key finding of insights from its 2026 Growth Assessment, an analysis of 240 advisors.
The study pointed to referral development as one key differentiator, with 93% of respondents saying they had no formal process to generate referrals consistently. But 63% of their growth depends on new client acquisition, AssetMark pointed out.
Referrals And Growth Outcomes
Among advisors with 11 or more active referral sources, 58% were in the top growth tier, compared with just 38% of those with less than three sources, according to the study. That was driven not by relationship type but instead by the volume and consistency of sources actively sending clients, according to AssetMark.
Although many advisory firms achieved strong asset and revenue growth over the last decade, AssetMark said that differences in firms’ approach to business development and growth execution may have been hidden by favorable markets.
The study also revealed a wide range of growth outcomes, with 45% of advisors reporting greater than 20% of growth in assets under management (AUM) in the last three years, while 29% grew less than 10%.
Also notable was that 29% of advisors underperformed against the returns of a passive 60/40 portfolio over the same period, suggesting that market appreciation may have driven growth more than business expansion.
Market appreciation may have driven growth more than business expansion.
“The last decade created significant growth opportunities across the advisory industry, but our research suggests that sustainable organic growth increasingly depends on operational discipline and consistent execution,” Michael Kim, CEO and President of AssetMark, said in a news release announcing the findings.
“Advisors who are building referral systems, investing in team capacity and creating accountability around growth initiatives are positioning themselves well for the future,” he said. “Our goal in sharing this research is to help advisors better understand which behaviors are most closely associated with long-term growth and scalability.”
Although advisors with documented growth plans were more likely to report stronger growth, the research found that consistent execution was a larger factor, according to AssetMark.
Team Investment
Firms’ investment in team capacity produced a significant difference, with 65% of advisors actively hiring or restructuring their teams achieving the top growth tier, while 36% did so without hiring plans. AssetMark said that the need for resources to invest in teams means that a firm’s operating model is significant.
A previous AssetMark study, its 2024 Impact of Outsourcing Study, showed that advisors who outsource investment management freed an average of nine hours per week, which increase to almost 12 hours for those outsourcing 90% or more of their assets. Outsourcing caused 77% of respondents in that study to experience lower operating costs.
Advisors Who ‘Feel Like They’re Doing Fine’
Many advisors in the study did not have formal growth-management practices or consistent accountability processes. More than half said they rarely or never conducted growth reviews, and almost 90% did not formally review marketing outcomes. AssetMark said that these activities were more frequent among higher growth advisors.
“The advisors I worry about are the ones who feel like they’re doing fine,” according to Dana Burkhardt, Vice President and Head of Business Consulting at AssetMark. “Their AUM is up, their clients are happy, and they haven’t had to build a referral system or a growth process,” she said.
She added, “That works - until it doesn’t. The advisors who come out of the next correction in a position of strength are the ones building growth infrastructure right now, in the good times, before they need it.”
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
