“When you stop growing, you start dying.” For many advisory firms, this pithy saying has become reality. While market lift may be giving the illusion of double-digit growth, real growth from new clients or new assets for the average firm is under 5%.

According to the 2018 Study of Pricing & Profitability published by InvestmentNews Research (IN Research), median revenue growth over the last five years has struggled to keep up with client attrition and asset de-accumulation.

In 2016, the median revenue growth rate was 5% and in 2017, it jumped to 11.7%. When viewed through the lens of assets under management (AUM), new assets from new and existing clients comprised roughly 4% of the growth, while market performance accounted for 8.3% of the growth. Client loss and asset distributions dragged the asset growth rate down 4.6%.

How do these figures compare with business models that do not benefit from market movements to drive their revenue? According to the 2017 Private Capital Access (PCA) Index report from Dun & Bradstreet and Pepperdine Graziadio Business School, small businesses anticipate growing revenue 9.1% on average, up from 8.7% the previous year.

The average advisory firm is seeing improvements in its top line, profitability and partner distributions each year. Unfortunately, aging clients often require more attention, and yield less profit to the firm; this dynamic creates a need to find new business.

Is your firm growing fast enough to add new partners without diluting the economic interests of existing partners? This is a good indicator of the firm’s health. Is your firm servicing an increasing pool of clients in the de-accumulation stage versus the growth stage? If so, it is only a matter of time before the markets can no longer offset a lack of discipline around business growth.

Take the time to analyze where you stand. First, evaluate your growth relative to your cost structure, the need for more profits to fund future needs, the demand for higher compensation by you and your staff and a desire for others in your firm to become owners. Then investigate your impediments to growth.

Generally speaking, the impediments fall into these general categories:

Capacity — A lack of capacity possibly represents the biggest barrier to growth. Any one advisor has a physical limit of the number of clients he or she can manage well. The best firms hire staff ahead of need, freeing lead advisors to focus on business development instead of processing or routine functions. Creating capacity helps ensure you have an appetite for attracting new clients, and a discipline around terminating less optimal clients.

Positioning — The firm’s presence and reputation in the market affect growth. In perusing the websites and collateral material of your strongest competition, do you see a difference in how each firm is positioned? The same passive terminology — “we use a planning approach,” “we are holistic,” and “everything we do is tailored to your needs” — tends to dominate. Are you connecting with prospects on an emotional level and expressing yourself in a compelling way? It may help to define an optimal client in terms other than net worth or investable assets, and then find a hook or technical expertise to attract this community of clients.

Over-reliance on referrals — Many advisors participate in referral programs or use relationships with Centers of Influence (COI) to generate leads. This strategy tends to shift the burden of firm marketing to others. Ideally you should create a pipeline of opportunities on your own. If referrals from COIs or clients remain your core source of new business, help them define what you do in a way that resonates with prospects.

According to the 2018 IN Research study, growth-minded advisory firms deploy a variety of techniques to grow their businesses, including the use of marketing firms, hiring professional business developers and more careful client segmentation. Top firms do three things well:

1. They build the business development skills of their entire professional staff. 2. They identify “communities” of clients in which they can achieve some level of market dominance. 3. They effectively use social media to attract and engage clients.

The idea of pursuing new business intimidates many advisors, especially those who do not come from a sales culture. The same could be said for accountants, engineers, doctors and lawyers. These professions also find differentiation in the marketplace challenging. Like advisors, they come from an intellectual background where asking for business feels uncomfortable. Like advisors, they rely on a catalyst of some type in order to engage with customers — though regulatory or compliance requirements may help lawyers and accountants.

With the exception of medical practices, these other professions all follow a process around career path development. A key component to this process teaches employees on the partner track how to drive more revenue and more clients to the firm. Without this training, their firms would become too dependent on the founder or existing partners for future growth.

Where do you start? Advisors who identify client characteristics aside from investable assets often see connections between their best clients and those they’d like to serve. Defining “client communities” by what they do, where they work, what their interests are or other common themes can create a sharper focus on where you may want to look for new business.

These communities also help to inform your social media strategies. Generally speaking, advisors who create consistent messages — often featuring graphics, photos or video targeted at their optimal client — discover new opportunities without depending as much on referrals. Marketing professionals usually suggest focusing on one area first; this may be Facebook, LinkedIn or Instagram, but the idea is to build a strategy around the marketing process. Support firms such as Hearsay and Hootsuite also help firms manage their social media approach.

The market lift over the past 10 years has made growth easier for most advisory firms. However, each time the market swoons or the firm loses a big client, advisors discover they are vulnerable to forces outside their control.

Now is the time to strengthen your marketing and business plan. The growth of new markets, new wealth and a flood of young people in need of professional advice makes this an exciting time. The discipline and cost to execute such a plan may feel overwhelming — but failing to stay current and engaged will catch up with your business in the not-too-distant future.

Mark Tibergien is CEO of Advisor Solutions, BNY Mellon | Pershing. Tibergien is also the author most recently of “The Enduring Advisory Firm,” written with Kim Dellarocca of BNY Mellon and published by Wiley. He can be reached at mtibergien@pershing.com or via LinkedIn linkedin.com/marktibergien.