Why I Don’t Recommend Marketing That Charges Basis Points

All marketing costs money either in dollars or time, but some are much more expensive than others.

In my role as a marketing consultant, I develop a lot of marketing plans for financial advisors. In general, I don’t have a list of things I always recommend and never recommend because my recommendations are based on the unique factors of the niche, the firm, and the advisor spearheading the strategy. But one thing I almost never recommend is tactics that charge a revenue share or basis points on assets for the life of the client they source for you.

There are marketing services and referral programs that will source prospective clients for you, but instead of charging a flat fee, they take a cut of the assets or revenue for as long as that client stays with you. Some custodians have referral programs that work this way. So does Zoe Financial. And most recently, FINNY AI changed their pricing to this model just a few weeks ago. Depending on the provider, you could be paying anywhere from 12 to 35 basis points for as long as the client stays with you. For a simple example, a $1 million client sourced by a vendor charging 20 basis points will cost you $2,000 per year. If you have that client for 20 years, that’s $40,000. And that’s not taking into account asset growth or new money flowing in, which the fee also applies to.

Compare that to the 2026 Kitces Marketing Study, which will be publicly available later this year. The study estimates the median client acquisition cost at around $2,500, with a range from about $800 to nearly $16,000 depending on the size of the firm.

Every year, you pay money to a company where all they did was source you a lead. And in some cases, they didn’t even do the work of getting the client; they just gave you access to their platform for you to do the work. They are getting paid in the years when marketing is not in play, only servicing the client. It’s eating into your profit for that client year after year. If the fee was only for a year or a few years, it would make a lot of sense. But over decades, it becomes the most expensive marketing you can do.

That said, I think one of my strengths as a strategist is understanding the nuances of every situation. If you have little to no marketing budget and you need to bring in revenue as quickly as possible, it could be a good way to jump-start your business with little risk or cash outlay. I also know of rapidly growing enterprise firms that are just interested in hitting growth numbers for their outside investors, so this type of scenario makes sense for them.

But for most advisory firms, I would have a hard time recommending any marketing that charges basis points or a revenue share on the life of a client for sourcing that client. I guarantee you can find new clients through other marketing channels much cheaper.

The takeaway: Before signing up for any marketing that charges based on assets or revenue for the life of the client, do the math. In almost every case, the long-term cost far exceeds what you’d spend acquiring that same client through other channels.