The Formula for Wealth Management Firm Growth
For years, the growth narrative in wealth management has focused on M&A and driving enterprise value through financial engineering. But that narrative is shifting dramatically. In 2026, organic growth is the number one priority for many, as enterprise valuations and specifically multiple expansion, are increasingly dependent on it.
The pursuit of organic growth isn’t new. We’ve been pouring capital and resources into the effort for years. Yet last year the industry average for organic growth was still less than 2%.
What are we missing? Why is generating organic growth so difficult for so many?
The Growth Formula
I want to offer an original formula that explains why most are falling short. And it’s in the dynamic relationship between the formula’s variables that we find a plausible explanation and solution for our organic growth conundrum.
Organic Growth = (Value × Amplification × Efficiency) / Commoditization.
This Growth Formula is both diagnostic and predictive. It reveals what’s limiting growth and predicts growth velocity, growth quality, and enterprise value trajectory.
The formula’s four variables are dynamic: Value generates Amplification. Amplification is increased by Value. Commoditization is inversely correlated to Value and degrades Amplification. Efficiency creates capacity. Everything connects.
We have been underestimating the negative impact of commoditization, overestimating the positive effect of amplification and underplaying the primary role of value in driving growth.
The truth about Commoditization. It’s no secret that wealth management is a commoditized industry, yet we may be underestimating just how much downward pressure commoditization puts on organic growth. A commodity is defined as indistinguishable from competitors and of lower perceived value. It’s a difficult starting point for growth.
As the denominator of the equation, Commoditization degrades everything above it. A big C (by definition) means a small v, and it significantly inhibits Amplification efforts.
Over the years, there has been a steady stream of new technologies, platforms and products to help advisors differentiate. Yet these efforts to de-commoditize often have the opposite effect. The wealth management industry is a textbook example of a phenomenon called competitive convergence, where the more competitors work to become better than their peers, the more alike they become.
Even more insidious, the advisory approach has converged: our industry delivers a standardized advice experience. The discover-and-recommend client engagement model, inherently limited in value creation, is the industry default, making the fundamental client experience commoditized.
Altogether, much of our industry is operating with a big C, and absent significant Amplification, this decimates any real growth potential.
The formula v × a × e / C is predictive of little-to-no growth and compressed multiples.
Amplification’s power and limitations. The predominant strategy to increase organic growth is marketing, lead generation, COI alliances, custodial referral programs and dedicated business development teams. In fact, over 90% of the articles on organic growth over the last five years have focused on these amplification strategies. Amplification, while generally capital-intensive, can work.
Case in point: Mariner Advisors recently reported over 15% organic growth in 2025. Great results even in the face of a dominant C*. But also capital-intensive, driven by a team of 85 dedicated business development professionals, custodial referral programs and COI alliances. (*ten-dimension/500+ data point commoditization audit).
Yet the equation does expose the limitations of a big A when coupled with a dominant C. Amplification can buffer Commoditization at client acquisition, but it doesn’t remove it. And C influences the entire relationship lifecycle: retention, wallet share and referrals. Without a big V (the consequence of C), a big A may generate new clients, but it may also be limited in capturing full wallet share or generating the advocacy that drives referrals and spins the organic growth flywheel. The market also discounts capital-intensive and less sustainable growth, muting multiple expansion.
The formula v × A × E / C is predictive of capital-dependent growth and limited multiple expansion.
Value is the super variable. The equation reveals a structural truth the industry has overlooked or at least underplayed. Value is the most powerful driver of organic growth. A big V creates a small c, and that changes everything. And V drives better Amplification results. When you amplify higher-value offerings (versus commoditized), you inevitably generate higher acquisition rates, more consolidation of wallet share and subsequent advocacy.
V also fuels its own Amplification as differentiated high-value experiences generate real advocacy and referrals. Those referred clients convert at higher rates, consolidate wallet share and generate secondary referrals. The cycle compounds into a growing base of higher LTV clients.
Ultimately, a big V creates higher-quality growth and a sustainable growth flywheel. This is pure organic growth—lower cost of acquisition, higher sustainability, greater lifetime value—versus generated (A-powered) organic growth. It’s what commands higher multiples.
The formula V × A × E / c is predictive of sustainable, compounding growth and premium multiples.
Efficiency matters. It creates capacity to support growth and to generate optimal margins. Yet Efficiency does not create growth on its own. The concept of increasing growth by giving advisors more time only works when they’re creating big V value. Efficiency is an enabler, not a driver.
The Key to Unlocking Organic Growth
As the formula demonstrates, generating a big V is a compelling solution. And we can scale big V value. While many things enable a high-value experience — including product breadth, technology platforms, planning tools, and AI — advisor performance is the predominant driver.
Advisor performance, how advisors engage clients and enable decision-making, is where value is ultimately created. The primary impediment to V is our industry’s ubiquitous discover-and-recommend client engagement model. It’s commoditized, and it structurally limits value creation.
Instead, we can create big V value through a scalable, collaborative, co-creative client engagement model, one that enables clients to make well-informed and confident decisions. This results in highly personalized value creation and clients who are active participants, not passive recipients. This ultimately creates deeper relationships, captures total wallet share, and drives exceptional advocacy — the core components that fuel organic growth.
A big V changes everything; it unlocks organic growth.
What’s your formula? Are you like many where Commoditization is impeding any real chance at meaningful growth? Are your marketing, lead gen, and COI efforts being buffered by a dominant C?
Or are you creating big V value that drives sustainable growth, captures total wallet share, and generates the advocacy that spins the organic growth flywheel?
Firms are either V dominant or C dominant. Which is dictating your growth trajectory?
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