While mergers and acquisitions (M&A) have long been seen as the fastest route to expansion, new research shows that organic growth is now the most valuable driver of RIA valuations.
In fact, according to Mercer Capital, each percentage point of organic growth can increase your earnings before interest, taxes, depreciation, and amortization (EBITDA) multiple by up to 1.0 times.
In real terms, this means a firm growing 12% organically could have an EBITDA multiple over twice that of firms without any organic growth.
So, what makes organic growth so powerful and how can your firm achieve it?
Organic vs. inorganic growth: What’s the difference?
Let’s start with the basics.
- Organic growth is the expansion of your firm through internal efforts, such as acquiring new clients, increasing wallet share, or improving retention.
- Inorganic growth comes from external sources, such as mergers, acquisitions, or partnerships.
While both can increase your firm’s size, organic growth is becoming more valuable when it comes to your firm's valuation.
According to Gladstone Associates, buyers are now prioritizing net new assets (excluding market lift) when assessing a firm’s value.
Mercer Capital backs this up, noting that firms with strong organic growth can command significantly higher EBITDA multiples.
Why organic growth is more highly valued
Buyers want more than just numbers; they want confidence in your firm’s long-term potential.
Organic growth signals that your business is:
- Stable and sustainable: It demonstrates that you can generate consistent revenue without relying on market performance or one-time events.
- Operationally sound: It reflects strong internal processes, client relationships, and cultural cohesion.
- Low risk: Buyers view organic growth as a sign of lower risk and higher-quality earnings.
Charles Schwab’s 2023 benchmarking report named organic growth as the top success metric for RIAs. The report highlighted that record-high asset gains from both new and existing clients is proof that organic growth is not only possible but profitable.
Yet, despite its value, many firms still overlook it.
Why are so few RIA firms growing organically?
Organic growth is difficult.
It takes time, effort, and expertise. That’s why many firms default to M&A, as it’s faster, more predictable, and often easier to execute.
But while inorganic growth may offer short-term scale, it doesn’t guarantee long-term value.
Organic growth, on the other hand, builds a stronger foundation for future success.
So, how can your firm grow organically and stand out in a competitive market?
Four proven strategies for organic growth
Here are four high-impact strategies to help your RIA firm grow from within:
1. Referral marketing
Referrals remain the top source of leads for advisory firms, accounting for 58% of new business, according to The Ensemble Practice and BlackRock.
Why it works:
- Referrals are high-intent and more likely to convert
- They’re cost-effective and build on existing trust
- They demonstrate client satisfaction and loyalty
To make the most of referrals, consider launching a formal referral program. This incentivizes your clients to recommend your firm and makes it easy for them to do so.
2. Digital advertising
Digital ads, across social media, search engines, and display networks, now account for over 75% of total ad spend in the US, according to emarketer.
Digital advertising can:
- Expand your reach
- Target specific demographics
- Deliver a measurable return on investment (ROI)
To succeed, you’ll need strong, creative, and expert targeting, along with a clear strategy.
While costs can vary, modern ad tech makes it easier than ever to optimize performance.
3. Content marketing
Today’s clients do their own research. That means your firm needs to show up where they’re looking online.
Content marketing helps you:
- Build credibility
- Improve search visibility
- Educate and engage potential clients
Focus on creating helpful, relevant content around your firm’s specialisms.
Blog posts, guides, videos, and FAQs can all help attract and convert leads over time.
4. Partner with a lead generation platform
If you want to grow quickly without stretching your internal resources, a lead generation platform is a smart move.
Lead gen platforms can connect you with people actively seeking financial advice. A premium platform will also offer tools to help you:
- Manage your pipeline
- Track performance
- Improve conversion rates
While not every lead will be a perfect fit, this is a scalable, repeatable strategy that delivers consistent results.
Why does this matter for your valuation?
Organic growth isn’t just about acquiring more clients; it’s about building a stronger, more effective business.
Firms that grow organically:
- Command higher valuations
- Attract more interest from buyers
- Enjoy stronger, more sustainable revenue
How Unbiased can help
Unbiased is a financial advisory platform that empowers RIA firms to grow their business through high-quality, verified leads.
Unbiased’s platform gives you the tools to manage your pipeline, track performance, and scale your business efficiently.
Book a free demo today and learn how Unbiased can help you scale your business in a repeatable and effective way with a steady stream of new clients.