A Financial Advisor’s Guide to Asking Existing Clients for Referrals

Last Edited by: LPL Financial

Last Updated: January 17, 2023

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Client referrals are a hugely untapped opportunity. If leveraged, referrals can help advisors grow their business in a way that competitors aren't pursuing.

Did you know, according to a study conducted at the University of Pennsylvania, financial advisory clients who were referred to their practice have a 16% higher lifetime value1 and greater ROI than those who weren't referred? Referrals can not only help you acquire new clients for your practice, but can also deepen your relationships with existing clients. If a client feels more connected to their financial advisor then they will feel good about referring them to someone they care about. Because of this, client referrals are a hugely untapped opportunity. If leveraged, referrals can help advisors grow their business in a way that competitors aren't pursuing. 

Regulatory guardrails are important to keep in mind when using client referrals. It’s okay to offer a referral fee as a financial advisor, however the Securities and Exchange Commission (SEC) has several rules on this practice. Before asking clients for referrals, keep these guidelines in mind.

Learn eight easy ways to generate referrals from existing clients below. 

1. Keep your current clients happy

Making sure your clients are happy with your firm is crucial when considering asking for a referral. Your client relationships are key as happy clients are easier to approach for referrals and may even proactively refer new clients to you.

It’s important to focus on delivering in areas that drive customer loyalty like customer service and personal relationships to become a highly trusted advisor. Additionally, your broker/dealer plays a role in ensuring client satisfaction, by supporting your business and providing you with the necessary tools and platforms to exceed client expectations. Learn more about LPL Financial's tools and platforms here. LPL Tools and Options for Growing Your Business.

2. Check in on your client's satisfaction often

The easiest way to ensure the satisfaction of your existing clients is to integrate customer satisfaction into your routine. It’s best to directly ask your clients how you're doing against customer loyalty drivers. Don't be vague in your request as it can create confusion and distrust. You could:

  • Create a client survey. You can then refer to previous feedback when checking in on a client in the future.
  • If they were unhappy with a specific aspect of your service, be sure to ask if they've seen any improvement, then ask what else you can do.
  • It's also just as important to check in with happy clients and ask what else you could be doing for them. 

3. Think about referrals from the client's perspective 

Understanding how it feels to give a referral as a client can help as well. Consider how and why you respond when asked for referrals in your own life. Whether its business related or more casual (such as restaurants, TV shows, concerts etc.) what makes it more likely for you to take the time to provide a referral? What tactics turn you off from providing referrals? Keep this in mind when asking the same of your clients. 

4. Ask the right clients for referrals

As we’ve established, strong client relationships are crucial for financial advisors in a number of ways – including potential referral business. Build a strong level of trust with clients before asking them to refer you to people they care about. You also want to build a strong personal relationship with clients by asking about the people in their lives during conversations. If a client mentions that they went on a golf trip with friends, ask who was on the trip. Make note of the repeated presence of individuals in these life moments and consider those to be strong referral candidates to find the ideal client.

Finally, look for existing clients who are very connecting and influential within their industry or within your community. If you have built a strong relationship with these clients, they can be a great referral source due to their extensive network of individuals who likely have or are in need of a financial advisor.

5. Create a pathway for referrals

Creating an open environment for existing clients to offer up referrals is another great way to build your referral business. Plant seeds with your clients during conversations and working sessions—in both subtle and non-subtle ways. Subtle ways to plant seeds include responding to the question "how's business?" with a story of how you've recently brought on several great clients through referrals, or by mentioning you have a focus on a particular industry or niche to which they belong (for example, physicians.) 

If you wanted a less subtle approach, you could include messaging about client referrals in your email signature or client newsletter/communications.

6. Ask for referrals at the right time, in the right way 

  • You should make a client referral about adding value to people that matter to your client. Your clients have chosen you as their financial advisor because you help them navigate complicated financial situations. When you’re asking that same client for a referral, don’t frame the conversation as a sales pitch, but as an offer to help someone close to the client in the same manner.
  • You can also consider offering to have a no-cost initial conversation with anyone your client refers.
  • Often the best time to ask for a referral is at the end of a positive conversation about a client’s financial situation.
  • It’s also helpful to have material ready to provide your client that helps them articulate the services you provide. This will make it easier for your client to understand fit among their connections and help introduce you to the right people.
  • However – and whenever – you ask your clients for a referral, don’t do it on a whim. Make sure you are prepared. You will feel more confident in your ask and you’ll be able to articulate the value you feel you can bring to new clients versus fumbling through an on-the-fly request.

7. Ensure the referral has a positive experience

While it’s obviously important to consider the satisfaction of a current client, it’s also crucial to ensure the satisfaction of the referral. A positive experience for a referred client obviously increases the likelihood of new business, but it also keeps you in good standing with your current client. Allow yourself time to adequately prepare for the initial conversation with a referred prospect, and put them at ease by bonding over your mutual connection. That being said, make sure to avoid violating your existing client's privacy. 

8. Always follow up with clients after receiving a referral

After receiving a client referral, it’s essential to show your appreciation regardless of outcome. You can share a personal note or another gesture of gratitude including dinner or a small gift. These gestures also allow you to "go back to the well." Once a client has referred someone to you, it will be easier to ask that client for additional referrals in the future. 

By following the eight tips above you can grow your client community through referrals and grow your advisor business. Learn more about LPL's services below. 


For Financial Professional Use Only.

1. Schmitt, Philipp; Skiera, Bernd; Van den Bulte, Christophe (2011), “Referral Programs and Customer Value,” Journal of Marketing, Vol. 75 (January), pp. 46 – 59.

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The views and opinions expressed by LPL Financial Advisor(s) may not be representative of the views of other Financial Advisors and are not indicative of future performance or success. Neither LPL Financial nor the LPL Financial Advisor can be held responsible for any direct or incidental loss incurred by applying any of the information offered.