Boost your growth strategy with a documented referral plan

Key Points

  • A documented referral plan organizes referral tactics into a cohesive, measurable strategy that engages the entire team.

  • A client value proposition and ideal client profile help target qualified leads.

  • Regular review and updates helps continually improve referral efforts.

Referrals are the number one way financial advisors grow their client base. So it makes sense that RIA firms are continually seeking new tactics aimed at increasing referrals. What's surprising, though, is that many firms are neglecting one of most important elements of a successful referral strategy: Creating a documented plan.

Schwab's 2021 RIA Benchmarking Study found that fewer than half of the largest firms have documented referral plans.1 Documented plans are even rarer among firms managing less than $250 million in assets. Yet the firms that did have documented existing-client referral plans generated 9% more new clients from existing-client referrals, and firms with documented business-partner referral plans generated double the number of new clients from business-partner referrals.2

A documented plan offers a simple way to boost your referral efforts by organizing the techniques you're using today into a coherent, targeted, and measurable strategy.

The basics of a documented referral plan

A referral plan is part of an integrated marketing plan that supports your firm's overall strategy. It clarifies your firm's referral goals as well as each team member's responsibilities, allowing you to organize a range of referral tactics into a comprehensive strategy tailored for your client base.

The key elements of a documented referral plan include:

  • Current referral volume and conversion rates. First, quantify how many referrals you're generating from different sources, as well as how many become clients. Starting with an accurate picture of where your referral efforts stand now makes it easier to set goals and measure progress. 
  • Your firm's ideal client profile and value proposition. These documents are essential tools that help explain to existing clients and your centers of influence the kind of referrals you want, and why they might want to work with your firm. 
  • Growth goals. A documented referral plan can include specific goals for number of referrals, number of new clients generated, or increase in assets under management. Having clear referral goals based on your firm's overall growth objectives focuses your attention and helps you track progress—allowing you to spot issues and correct them early. 
  • Individual responsibilities. Each team member should have a clear understanding of their role in the firm's referral plan. For example, advisors may be tasked with asking specific clients for referrals, while client service associates are charged with conducting preliminary vetting of those leads. Creating individual referral goals and guidelines for person-hours per week spent on referral-generating activities provides accountability, and can be used to create incentive structures.
  • Recommended activities. Detail the tactics your team employs to generate referrals. Some may be already proven, such as requesting referrals from specific clients during annual meetings. Others may be ideas you want to test, such as hosting virtual events that ask existing clients to bring a friend or family member. When appropriate, provide support materials for these activities, such as talking points for referral conversations with clients. Also consider mapping a referral workflow diagram to help illustrate specific steps taken before and after each type of referral-generating activity. 

Reviewing and updating the plan

While the first iteration of a documented plan can do a lot to boost your referral strategy, it becomes even more powerful when you review and amend it regularly. You can use the data you generate from ongoing referral efforts to evaluate the success of tactics, set new goals, and gauge what kind of new approaches to try. 

For example, your advisors may have increased the number of clients they're asking for referrals. But after six months, your data may suggest that asking more clients for referrals don't always generate more leads—they're only effective in certain circumstances or with certain clients. You can then amend your referral plan to include fewer, more-targeted requests to a specific client profile, minimizing annoyance to your clients and maximizing effectiveness.

Alternatively, you may find that you're generating plenty of leads but aren't converting enough of them into clients. In that case, you can investigate why your current referral tactics aren't producing prospects who are a good fit for your firm or whether you need to review your value proposition. This kind of diligent, methodical approach to refining your referral strategy becomes much easier with a documented plan. And that helps you focus your time and resources on activities that are most likely to deliver the growth your firm needs to succeed.

What you can do next

  • Enroll in our Virtual Practice Management series, Forming Your Foundation. These programs will help you identify and reach your ideal clients by developing a strong ideal client persona and client value proposition.
  • Consider a custodian that invests in your success. If you're thinking about becoming an independent advisor, contact us to learn more about the benefits of a Schwab custodial relationship.


1 Results for all firms with $250 million or more in AUM.
2 Median results for all firms with $250 million or more in AUM. Past performance is not an indicator of future success. 2021 RIA Benchmarking Study from Charles Schwab, fielded January to March 2021. Study contains self-reported data from 1,340 firms.