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The Future of Financial Advisory Firms

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At the recent Future Proof Festival in Huntington Beach, CA, I had the privilege of engaging in one-on-one conversations with the best and brightest advisors in the space (as well as enjoying some amazing runs down the PCH before sunrise!). These growth-focused advisors shared stories and challenges that match with the trends our team continues to tackle on behalf of firm owners on a daily basis.

Discussions at Future Proof Festival centered around this core trend of practices becoming larger, enterprise-minded firms, creating more opportunity for their sustainable, long-term growth. Many of these elite advisors are striving for consistent annual growth rates north of 10.5%, a goal that is entirely achievable under current industry conditions.

Here are the four pillars that stood out to our team as essential to supporting and accelerating high-performance wealth management firm growth. These pillars represent the trends, strategies, and opportunities that will influence independent financial advisors’ success in not only meeting but surpassing their annual growth goals.

Growth of Practices into Enterprises

One of the most notable trends is the evolution of financial advisory practices from small firms to true enterprises. This shift is not just in size but also in how these firms operate. Gone are the days when a solo advisor with a couple of support staff could effectively manage a growing book of business. Today, the most successful firms are scaling up, building teams, and creating structures that resemble fully functioning businesses.

This transformation was clearly highlighted during the event. The agenda featured a major focus on “business owner” topics, such as scaling operations, building leadership teams, and creating succession plans. Advisors who attended breakthrough meetings with our team at SRG came with questions that reinforced this trend—many were seeking guidance on team expansion, enterprise management, and the challenges of becoming a business owner rather than just an advisor.

This evolution from practice to enterprise is a natural outcome of consistent growth, and as firms scale, new challenges and opportunities arise. Advisors who embrace an ‘enterprise mindset’ are better positioned to take advantage of these opportunities, moving from running a practice to building a sustainable, scalable business that can weather market fluctuations and continue growing for years to come.

Team-Based Compensation and Entity Structures for M&A

As firms grow into enterprises, one of the most pressing needs is the development of team-based compensation models and more robust entity structures that can support multiple generations of owners. These elements are essential not only for attracting and retaining top talent but also for supporting mergers and acquisitions (M&A) and equity-sharing opportunities that can drive further growth.

The conversations we had with advisors at Future Proof underscored the urgency of this need. Financial advisors are realizing that their success depends not just on their own expertise but on the collective efforts of their team. As a result, compensation models must evolve to reflect this team-based approach, incentivizing collaboration and rewarding high performance across all levels of the organization.

Moreover, the shift towards larger, enterprise-level firms has sparked increased interest in M&A as a growth strategy. For many firms, acquiring or merging with other practices is the quickest route to scaling operations and increasing market share. However, this requires more sophisticated entity structures to capitalize on the complexities of M&A transactions, facilitating things like equity swaps, optimized financials, alternative tax strategies, and more robust governance frameworks. Advisors who invest in building the right structures today will be better positioned to capitalize on future opportunities in the M&A space, paving the way for sustainable growth.

Investment in Marketing and Branding

Another significant trend that stood out during Future Proof was the increasing focus on marketing and branding. Many advisors are recognizing that to grow at a compound annual growth rate (CAGR) of 10.5% or more¹, they need to ramp up their marketing efforts and invest in their brand. Simply put, the days of relying solely on word-of-mouth referrals are over.

This industry is becoming more competitive, and firms that want to stand out need to invest in building a strong brand and leveraging modern marketing tools. We heard from advisors who are using everything from podcasting to social media marketing, and even partnering with companies that specialize in advisor-focused marketing solutions. This shift towards a more proactive, consistent, and sophisticated approach to marketing as a means of consistent lead flow (and thus growth) is essential for attracting new clients and retaining existing ones.

But it’s not just about bringing in new business—it’s about driving long-term value. Firms that invest in their brand and marketing today are likely to see higher valuations in the future. A strong brand creates trust, and trust is a key driver of client loyalty, referrals, and ultimately, firm valuation. By focusing on marketing and branding, financial advisors are positioning themselves for sustainable growth in an increasingly crowded market.

Capitalizing on Industry Trends for a New Era of Growth

These three pillars—growing practices into enterprises, developing team-based compensation and M&A-ready entity structures, and investing in marketing and branding—are setting the stage for a new era of growth in the financial advisory industry. Advisors who embrace these trends will not only outpace their peers but will create firms that are built for long-term success.

The conversations at Future Proof highlighted the importance of looking beyond short-term wins and focusing on strategies that will drive sustainable growth. For firms aiming for consistent growth rates at or above industry norms for similar sized firms, the key is to think like business owners, not just advisors. This means building a strong foundation—whether that’s through team development, sharing equity, or investing in marketing—that will support sustainable growth for years to come.

Is your firm ready to capitalize on opportunities for sustainable revenue growth?

The financial advisory space is entering a new phase of maturity, where practices are incentivized to join robust enterprises. Regardless of your firm’s growth goals, how you tackle the next decade will determine your long-term relevance. Investing in the right strategies can be difficult, if not impossible, without the data to focus your energy and streamline decisions.

What’s next?

If you haven’t gotten a valuation in the past three years, start there. Not only does a valuation provide information most owners need to make smart choices about talent, compensation, profit margins and more, but it also gives you a leg up on your competition. Those who know their value will not only be more successful in achieving their growth goals but will create a legacy of sustainable success that will carry their firms into the next decade and beyond.

Grab a valuation here.

¹ Succession Resource Group’s Guide to Increasing the Value of your business notes a target benchmark of approximately 10.5% compound annual growth.

Picture of David Grau Jr.

David Grau Jr.

David Grau Jr., founder and CEO of Succession Resource Group, specializes in succession and M&A consulting for advisors. As a leading M&A consultant with a history of service in the United States Navy, David is recognized as a thought leader and accomplished speaker. He is prominent in the financial services industry, especially on topics related to M&A and next-generation strategies, having delivered over 200 presentations for organizations like the Financial Services Institute (FSI) and FPA.

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