Organic growth through client acquisition is a key aspect of growing advisor practices; however, more than half of advisors (55%) consider new client acquisition a challenge, according to the latest Cerulli Edge—U.S. Advisor Edition.

To market themselves more effectively, advisors must understand why unadvised investors are not using their services. While the majority (80%) of clients are satisfied with their primary advisor, most unadvised investors do not believe they will receive enough value for a relationship to be worthwhile. Unadvised investors often view advisor-client relationships as lacking transparency and perceive associated costs as excessively high.

Transparency is crucial, not only for maintaining good relationships with existing clients, but also for attracting new ones. “It’s an essential aspect of service for advisors. Consistency in communication, being upfront about any substantial changes to a client’s portfolio, and being explicit about costs are important discussion points,” says Noah Serianni, analyst. “For affluent investors, transparency is the most important factor when choosing an advisor, even more so than demographic or performance-based considerations.”

Many unadvised investors are unsure about the price of hiring an advisor and often perceive them as too expensive. There is also confusion among those who use advisors about how they are compensated; one in four advised clients do not understand their fee structure, and one in five believe they do not pay their advisor at all.

“Despite these concerns, most are willing to pay for advice,” says Serianni. “According to Cerulli, 59% of affluent respondents are willing to pay for financial advice, up from 45% in 2015. Increasing cost transparency will help advisors retain existing clients who value openness and honesty from their advisors while attracting new clients seeking someone they can trust,” he adds.

Advisors who can address the trust and transparency disconnect will improve the likelihood of onboarding new clients. Developing a marketing strategy that articulates the firm’s value and fee options can help. “Increasing visibility helps drive unsolicited clients to contact firms directly, which is how nearly one in five clients begin their relationship with their primary advisor,” says Serianni. “Integrity and openness go a long way in the minds of hesitant investors, and advisors who prioritize and effectively market these aspects of their service will find success attracting and retaining clients,” he concludes.