Where your clients come from: tracking referral sources at a small RIA
A small RIA can track referral sources by recording one source for every prospect at the first contact (a client, a CPA or attorney, an event, the website, or something else), carrying it through to the client record, and reviewing once a quarter which sources produce clients rather than just meetings. Thank each referrer in a consistent way. If anyone is paid or rewarded for referrals, talk to your compliance consultant first.
Ask a small firm's founder where new clients come from and the answer is usually "referrals, mostly." Ask which referrers, and how many of their introductions became clients last year, and the room goes quiet. Most firms know referrals matter. Few can say which ones.
What should you record for each prospect?
| Item | Example |
|---|---|
| Source category | Existing client, professional, event, website, other |
| Referrer, if there is one | The client's or CPA's name |
| Date of first contact | When the prospect first got in touch |
| Outcome | Became a client, still talking, not a fit, went elsewhere |
The routine
- Record the source at the first contact, every time.
- Carry the source onto the client record when a prospect signs.
- Thank the referrer the same way each time, whatever your firm's habit is: a call, a note.
- Once a quarter, count prospects and new clients by source.
- Spend more time on the sources that turn into clients, not just meetings.
A worked example
Take a hypothetical two-person RIA that starts recording sources in January. By the end of the year it has 31 prospects. Eleven came from existing clients and six of those signed. Nine came from two local CPAs and four signed. Seven came from talks it gave and one signed. The firm keeps the talks but books a lunch with each CPA, and adds a short note to its annual review agenda asking happy clients if they know anyone it could help.
What are the common gaps?
- Source left blank because nobody asked at the start.
- Sources tracked for prospects but lost when they become clients.
- Counting meetings by source instead of clients.
- A thank-you that depends on who happened to take the call.
- A referral reward set up without checking the rules first.
When is this overkill?
If you take on two or three clients a year and know exactly who sent each one, a note on the client record is enough.
How Advorra fits
Advorra keeps a prospect pipeline alongside clients, households and communications, so where a prospect came from stays on the record when they become a client. See the product page, or read about the prospect pipeline and what to do after the first prospect meeting.
One thing to do this week: add "how did you hear about us?" to your first-call notes, with the five categories above.
An operations routine, not legal or compliance advice. Referral arrangements that involve payment or rewards can carry their own requirements.
Questions advisors ask
When should the source be recorded?
At the first contact, while it's fresh. Asking "how did you hear about us?" months later rarely gets a clear answer.
What categories should we use?
Keep it short: existing client, professional (CPA, attorney), event or talk, website or content, and other. Add the referrer's name where there is one.
How often should we review it?
Once a quarter is enough for most small firms.
Can we pay people for referrals?
Paid or rewarded referral arrangements can bring disclosure and agreement requirements. Ask your compliance consultant before setting one up.
Is this compliance advice?
No. It is an operations routine.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
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