For many advisory firms, organic growth is stagnating. AI lead-generation tools are a promising potential fix.

While more than half of advisory firms grew less than 5% by adding new clients in 2023, roughly a fifth of the industry managed to achieve double-digit organic expansion, according to a recent report from The Ensemble Practice and BlackRock. This group of RIAs sets itself apart by having a growth strategy in place, said Robert Sofia, CEO of Snappy Kraken, adding that AI tools can be a valuable part of that because of their ability to both create tailored marketing content and identify leads using third-party data.

“[AI tools] access these third-party property records and business records and create a profile on the prospect,” Sofia said. “That allows the AI to read a profile on the prospect that’s much more nuanced, and then market to them in a tailored way.”

AI Targeting

One particularly powerful AI tool is the lead-scoring model, which evaluates prospects and shows advisors the ones that are most likely to become clients. Research has shown such models to be particularly effective, said Finny AI CEO Eden Ovadia, who spoke at the annual Future Proof conference in Huntington Beach, California. Companies that use lead scoring have experienced a 77% increase in lead-generation return on investment, according to SuperAGI, a customer relationship management firm that uses AI agents. AI can also help a firm drill down into its niche, locating prospects who fall into target categories. Ovadia described one advisor who used AI to find and identify prospects who just moved to Jackson Hole, Wyoming, based on property records. “He filters for a minimum property value and [reaches] out to them. It’s just, ‘Hey, I’m a local advisor here. I’ve been here for 20 years. I know all the local hot spots, and I also know some great tax strategies. Let’s grab a coffee,’” she said. “He had an 80% response rate on that one campaign because it was so thoughtful, so deliberate and so personal to that recipient.”

AI-driven lead generation may soon become the norm. According to CPA Growth Advisor:

• 97% of advisors believe AI can help organically grow their business by more than 20%.
• 87% also said they’d use more AI tools on a day-to-day basis — and spend time learning a new AI-based process — if there is a clear benefit to them.

Beyond niches, AI can be helpful in figuring out which marketing strategies work so they can be replicated across a firm’s geographically diverse advisor base. A firm might use several AI-driven strategies, see what works best and then implement that nationwide, Sofia said. “These micro-strategies… when you get them really dialed in, if you’ve got a multi-advisor use case, you can replicate that across your network,” he added.

Clickbait. AI tools can also ingest “behavioral and intent data” — information on who visits a firm’s website, or who clicks on its content — to further narrow the search effort to prospects who show interest, Ovadia said. “It all starts with data, and it all starts with the inputs you’re putting into the models,” she added.

The more things change, the more they stay the same.

This year may have felt like a rollercoaster, with ups and downs in the market, the White House’s shifting tariff regime and bubbling geopolitical tensions. But while the world looks different than it did two years ago, ultra-rich family office clients are singing the same old risk-on tune. Globally, family office asset allocations today bear a striking resemblance to those of 2023, according to new Goldman Sachs data. Especially in hectic times, it’s best to remember that advising is a long game.

“The world always feels like a volatile place,” Tony Pasquariello, head of hedge fund coverage at Goldman Sachs, said at a press conference. “But in general, there’s been these brief flashes of volatility that did not last very long.”

Stay in the Game

The areas where family offices see the greatest investment risks today include geopolitical conflicts, political instability and economic recession, per Goldman data. Nearly two-thirds of offices view the wars in Ukraine and the Gaza Strip as well as ever present US-China tensions as potentially negative for clients. Relatively speaking, offices in the Asia Pacific region are the most concerned.

Such concerns, however, haven’t really altered how family offices manage assets:

• The average family office now puts 31% of its allocations toward public equities, up from 28% in 2023. While private equity allocations remain significant, they dropped from 26% to 21% in that time.
• Overall, 42% of allocations are in alternative assets, and 38% of family offices said they expect to increase their positions in public equities, highlighting clients’ appetite for risk.
• Meanwhile, allocations to cash, fixed income, private real estate and infrastructure, hedge funds, private credit and commodities have stayed mostly flat.

“That really comes down to this realization from family offices that the only way to grow and preserve your wealth and preserve your purchasing power over time is to beat inflation,” said Sara Naison-Tarajano, head of private wealth management capital markets at Goldman. “US equities have historically been the best way to beat inflation.”

Home Court Advantage. The outlook among family offices in the Americas is so positive that more than a third of firms are not positioning their portfolios to handle extreme or unexpected market events. However, in the Asia Pacific and Europe, Middle East and Africa regions, just 12% and 14% are not positioned for tail risk, respectively, favoring geographic diversification. “The US still is overwhelmingly the place where families are invested, but the next most likely place is their home country,” said Meena Lakdawala-Flynn, co-head of global private wealth management at Goldman.

Kids these days, right?

Between recession fears, a mass retirement of older planners and the looming presence of AI, advisors have plenty on their plates. And that’s without counting one of the industry’s biggest challenges: Watching assets walk out the door when clients’ children inherit their parents’ wealth, then take their business elsewhere.

This isn’t a distant threat of the Great Wealth Transfer, either. It’s happening now. Many advisors have already lost business with a client’s heirs, and while some treat it as a wakeup call, others simply don’t sweat it. “My initial reaction used to be disappointment, but I’ve come to realize it’s not personal,” said Dean Tsantes, CFP with VLP Financial Advisors.

It’s Not You, It’s Me

Only about a fourth of those who expect to receive an inheritance said they would maintain an existing relationship with the managing advisor, according to a recent Cerulli report. That number drops to just 20% among those who already have received an inheritance. So don’t blame yourself if and when they leave.

However, when client’s children have gone elsewhere, Tsantes viewed it as a reminder to connect with them earlier. “Advisors can’t wait until an estate transfers to start building relationships with the next generation,” he told Advisor Upside. “If you’re not proactive, the likelihood of retention is slim.”

Still, engagement only goes so far. Success depends more on family dynamics than advisor outreach, according to Ralph Bender, founder of Enduring Wealth Advisors. “Open, trusting families with parents actively involved in the children’s financial education yield more G2 clients than more financially dysfunctional families,” he told Advisor Upside.

Stay Focused. Losing next-gen clients may sting, but it’s not always a crushing blow. Advisors focused on a specific niche may not align with younger clients’ needs or attitudes, and attempting to hold on to them might not be worth the effort, according to Landon Tan, founder of Query Capital. “This work is really personal, and it doesn’t feel realistic for most advisors to deeply resonate with their clients’ children,” Tan told Advisor Upside. “It seems more practical for advisors to focus on replacing lost revenue from clients passing away with other new clients who are more similar.”