Client Acquisition Cost for Financial Advisors (+ Free Calculator)

What CAC is — and why most advisors miscalculate it

Client acquisition cost is everything you spend — in dollars and in your own time — to win one new client, divided by the number of clients you actually won:

CAC = (marketing spend + prospecting time × your hourly value) ÷ new clients won

Most advisors only count the hard dollars. Kitces Research found the opposite is true: of the average $3,119 cost per client, only $519 is hard-dollar spending — the other $2,600 is the advisor's own time. If your calculator doesn't price your hour, it's lying to you.

The industry benchmarks

And it's worsening: acquisition costs rose roughly 75% between 2021 and 2023. Every month you don't know your number, the market is repricing you silently.

How to read your number

• Above ~$3,100 — you're paying more than the average advisor for each client — and above $4,000, more than even paid advertising's average of $3,805.
• Below ~$3,100 — you're beating the average — now check whether your time is included. An honest CAC nearly always looks worse first.
• Compare to client revenue, not to zero — a $5,000 CAC for a client paying $12,000/year in recurring revenue is a bargain; a $1,500 CAC for a one-off $2,000 engagement is not.

Five ways to lower your CAC

• Shift from interruption to intent — channels that capture prospects already in motion (listings at $634, SEO) beat interruption channels (events at $4,933, social at $11,937) by an order of magnitude.
• Stop buying raw leads — a cheap list still costs you the qualification calls — that time is the expensive part.
• Pay for appointments, not names — warm-transfer models convert acquisition into a fixed, predictable cost per meeting.
• Raise your minimum — the same acquisition effort aimed at larger households lowers CAC per dollar of revenue even if CAC per client rises.
• Price your hour honestly — track prospecting hours for one month; the number usually changes your channel mix immediately.