For most advisers, the single hardest part of growing their business is simply acquiring new clients. With little to invest in marketing, most business development strategies involve approaches that have little or no upfront cost, such as informally asking for referrals, or partnering in formal RIA solicitor referral agreements that share a percentage of the revenue from the client.
The upside of this approach is that advisers have an opportunity to incentivize a marketing partner, with no upfront marketing costs. The downside, however, is that given the high client retention rates of most advisory firms, revenue-sharing agreements can be an astonishingly expensive tool in the long term.
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