The wealth management industry has a growth problem it doesn't talk about enough.

Strip out market appreciation, dividends, and interest income, and most advisory firms are actually shrinking. Industry data suggests that organic growth across the RIA space averages around 2% — and if you remove the top 10 fastest-growing firms from the equation, organic growth for the rest of the industry turns negative.

That's a sobering reality for an industry that has attracted billions in private equity capital over the past decade, largely on the promise of scalable, recurring revenue.

In a recent episode of the Next Mile podcast, John Bunch, CEO of Allworth Financial, put it plainly: "The holy grail in this industry is organic growth. That's what drives valuations. And frankly, now that inorganic growth has gotten much more expensive versus five, six years ago, it's important that you focus on organic growth first and then inorganic growth."

Bunch is leading what he calls Allworth's "third generation" — a strategic shift from acquisition-led growth to a model built around evolving the firm's capabilities, elevating its advisors, and executing on organic channels. It's a playbook worth studying, whether you run a $500M practice or a $50B enterprise.

The math has changed on M&A

Five or six years ago, there was a meaningful arbitrage in RIA acquisitions. Firms could buy practices at reasonable multiples, integrate them, and generate outsized returns for shareholders. That window has narrowed considerably.

Valuations across the RIA landscape have climbed steeply. The cost of acquiring a practice today is significantly higher than it was when the current wave of consolidation began. And if the firms you're acquiring aren't growing organically once they join your platform, the economics start to break down.

"Inorganic growth by itself is not very valuable for both shareholders or employees," Bunch explained. "You have to be able to buy firms and then grow those firms and expand the offerings."

The firms that will command premium valuations going forward are the ones that can demonstrate sustainable organic growth — new clients, new assets, expanding relationships — on top of whatever they add through acquisitions. The firms that can only point to acquisition-driven growth will find themselves in an increasingly difficult position as multiples compress and capital becomes more discerning.

Building a growth machine, not a growth department

Allworth's approach to organic growth isn't a single channel or a marketing budget line item. It's an infrastructure — a full-service internal agency with multiple channels working simultaneously.

Bunch described their setup: "We've got verticals like the airline industry — we have the largest airline practice in the RIA industry for pilots. We do the same thing for dentists and doctors. We also do digital media, social, paid leads." On top of that, the firm's podcast has crossed several million listeners, and its legacy radio presence continues to generate awareness.

But the real differentiator isn't the number of channels. It's the rigor applied to tracking them.

"If you said to me, 'Boy, I want to see leads from three years ago down to the individual lead level,' I can tell you exactly what happened — if it converted, what my payback was, and then probably why it didn't convert and what we've done differently to change our model," Bunch said.

This level of granularity is rare in wealth management. Most firms have a vague sense of where their clients come from. Few can trace a lead back three years, calculate the exact cost of acquisition, and measure the payback period on that investment.

Measuring payback, not budget

One of the most practical insights from Bunch's approach is how he thinks about marketing spend. Rather than setting a fixed budget as a percentage of revenue — the typical approach — he focuses on payback period.

"If I can acquire an account and have less than a two-year payback, I will continue to spend money until I hit that threshold," Bunch explained. "I have a really supportive board. If I go to my board and say, 'Listen, we have found a channel that we have a six-month payback on,' they're naturally going to say, 'Spend as much money as you possibly can because organic growth is what drives value.'"

This is a fundamentally different conversation than most firm leaders have with their boards or partners about marketing. Instead of defending a budget, you're presenting an investment case with a clear return timeline. It shifts the dynamic from cost management to capital deployment.

For firms that want to adopt this mindset, it requires two things: the data infrastructure to track leads from source through conversion and the willingness to fail fast on channels that aren't working while doubling down on ones that are.

Growth is a mindset, not a metric

Perhaps the most important element of Allworth's organic growth story isn't a channel or a strategy — it's culture.

When Bunch became CEO two years ago, he spent his first 90 days meeting with every employee in the company. What he found wasn't opposition to growth, but a lack of alignment around it as a priority.

"It wasn't necessarily a mindset," he recalled. "I think it was starting to be a mindset. But if you go talk to the employee base today, whether you're in operations or customer service or an adviser, people are excited about growth."

The shift matters because organic growth doesn't happen in the marketing department. It happens when advisors actively seek referrals, when operations teams create seamless onboarding experiences, when service teams turn satisfied clients into advocates.

"People want to win," Bunch said. "And if you feel like you're winning, if you feel like you're doing great things for clients, that's just infectious."

The data that makes it work

Underlying all of this is a commitment to data as a growth enabler. Allworth has invested in building a data infrastructure that gives every advisor visibility into their practice — leads, conversions, client interactions, financial plans completed, insurance discussions, and more.

"All of our advisors have a dashboard where they can measure just about everything in their practice," Bunch explained. "I can get it on my phone. If you were my advisor, I could open up my phone and tell you, 'In the last year, you've had 47 financial plans. You've talked to 30 of your clients about insurance needs.' And we could have a robust conversation about how to manage your practice."

This isn't just reporting for reporting's sake. It's creating a feedback loop where advisors can see what's working, where they're falling short, and how they compare — and then adjust in near-real-time. It's the kind of practice management intelligence that turns growth from an aspiration into an operational discipline.

For firms still relying on quarterly reports and spreadsheets to track practice performance, the gap is widening. The firms that connect their data across systems — CRM, custodian, planning tools, marketing platforms — and make it accessible to advisors in a usable format are the ones creating the conditions for sustainable organic growth.

What this means for the next five years

Bunch's view of the future is direct: the gap between firms that grow organically and those that don't is going to widen significantly.

"The winners long term in this industry are going to be the folks that can grow organically. Period. And stop," he said. "Those that think that they're going to create superior shareholder value by just inorganic growth — I don't think that's possible."

For the firms that are currently flat or negative on organic growth, the consequences are material. "The valuations for those firms that aren't growing, you're going to see a steep decline because really, what are you buying?" Bunch observed.

The implication is clear: organic growth isn't just a nice metric to improve. It's becoming the primary determinant of firm value, talent attraction, and long-term viability in an increasingly competitive landscape.

The firms that build the infrastructure — the marketing channels, the data systems, the cultural alignment, the advisor enablement — to drive consistent organic growth are the firms that will define the next era of wealth management. The rest will be left explaining why their AUM growth was really just the market doing its job.

This article is based on insights from Episode 113 of the Next Mile podcast, featuring John Bunch, CEO of Allworth Financial, in conversation with host Kyle Van Pelt, CEO and Co-Founder of Milemarker.

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