Recent survey data has painted a surprising picture for advisors: firms can no longer grow on referrals alone. From our own research, surveys, and studies, we’ve identified the top reasons why firms are beginning to experience a decline in lead generation through referrals. Plus, we’re providing three easy yet effective ways to transform your lead strategy to meet the demands of today’s digitally savvy investors.
Reason #1: Next-Gen Investors Build Trust Differently
The next generation of investors is coming of age in a digitally driven world. What does this mean for advisors looking to maintain steady firm growth in the coming years? Digitally generated leads must be part of your firm’s organic growth plan.
Though you may currently work with Boomers and Gen Xers nearing retirement, your target audience will eventually evolve as younger generations age into your ideal demographic. And thanks to the Great Wealth Transfer, millions of these next-gen investors will be inheriting sizable estates.
So while referrals may have worked well for your firm so far, change is inevitable—as your audience’s preferences change, your strategy will need to adapt. In our recent report, for example, we found that Millennials and Gen Zers place less emphasis on personal referrals than their parents and grandparents. In fact, for prospects under the age of 60, only 29% required a referral before choosing an advisor. By comparison, 68% made their choice based on some form of digital marketing.
Reason #2: Research Habits Are Evolving
A whopping 96% of consumers read reviews online before visiting a local business. Just consider—if people are doing their due diligence before going out to eat, they’re certainly doing it before entrusting a firm with their life’s savings and investments.
Today’s consumers don’t shy away from conducting extensive online research before making important decisions. While a personal recommendation from a friend or family may get your firm on a prospect’s radar, it’s not enough to ensure they move forward with scheduling a call.
They’ll be evaluating their options on their own, most likely through digital channels like Google, publications, social media, and other third-party sites.
Reason #3: Access to Information Is Expanding
Speaking of research, the internet gives your prospects unprecedented access to your firm’s information, reviews, advisor credentials, areas of specialization, and more. With access to so much information at their fingertips, your target audience can independently assess your firm’s trustworthiness and credibility before they even decide to reach out and schedule a call.
What does this mean for referrals? A personal connection is no longer needed in order for someone to meet with or learn about a potential service provider.
Reason #4: Social Interconnectedness Is Declining
Even prior to Covid, people in America were putting less emphasis on finding their “third place”. If you’re unfamiliar with the term, this is the location outside of work and home (the first two “places”) that people go to connect with others. It could be a gym, cafe, bookstore or library, neighborhood bar, or any other community gathering space.
Community and social connections are critical to a successful referral strategy—if people aren’t regularly connecting with new people, their pool of potential referrals is limited. Participation in social organizations is declining, and people are just, in general, less likely to get to know their neighbors or people outside their existing circles of friends and influences.
For this reason, relying on referrals alone will likely not help you achieve your growth goals in the long run.
Reason #5: People Have Privacy Concerns Around Financial Matters
While the topics of wealth and money are less taboo than they were just a few years ago, people still tend to keep their financial circumstances under wraps. Though they may feel like it’s a less controversial topic, there’s still the matter of privacy.
Your clients may be uncomfortable discussing their advisor relationships with friends and family, which can, of course, limit your ability to receive organic referral opportunities.
Reason #6: Specialized Needs Often Require Specialized Advisors
Every individual’s financial situation is unique. It’s possible that what your clients need is different than what others in their lives are looking for.
For example, say someone is a high-earning physician with student loan debt and a complicated compensation package. They likely want to find an advisor who specializes in such situations. Their friends or family members may work with an advisor already, but not one who can address those specific needs easily.
Rather than rely on referrals, people with complex financial circumstances may feel more comfortable conducting their own research online and finding an advisor who can deliver a highly personalized and customized plan.
How to Adapt Your Lead Generation Strategy
With a better understanding of why referrals are no longer the powerhouse growth tool they once were, let’s take a look at three simple (yet effective) ways you can adjust your strategy to better attract your target audience:
Develop a multi-channel digital presence: Increase your firm’s visibility across multiple digital touch points. Beyond your firm’s website, build up a social media presence, create content that appears in search results, contribute to publications, and find other opportunities to get in front of your prospects. It’s important to diversify your digital presence. This way, you’ll appear at different stages of their search, which helps keep you relevant in their minds.
Embrace the attention economy: Your prospects’ attention is a valuable (and fleeting) resource. You’re not only competing with other growth-focused firms, but other companies in other industries as well for a moment of your target audience’s time. Continue supplying your digital channels with fresh content that enables you to stay top-of-mind.
Treat digital leads as relationship starters: You may need a mindset shift here, as leads you capture through digital channels are not “cold” contacts. Rather, they’ve gotten to know you through the content you produced and social proof others have provided. Think of them as relationship opportunities, as these are prospects who’ve already taken the first step to find help. They may be more primed and ready to talk than you realize.
Access the 2025 State of Digital Leads Report Now
With over 20 years of experience in the digital leads space, we know what it takes for advisors to conquer their growth goals in the era of modern, digital marketing. In our latest findings, The 2025 State of Digital Leads Report, we take a look at some of the eye-opening data that provides key insights into the current state of digital leads and how it impacts advisors (particularly those looking to build long-term growth).