% New Clients from Referrals

New business comes from one of three sources - existing clients that provide referrals, centers of influence (COIs) that provide referrals, and your own direct marketing efforts. Most advisors grow their businesses predominantly through existing client referrals – it usually accounts for approximately 80% of new clients. While it's a great thing that your existing clients refer new business, no more than 40-50% of new clients should come from these referrals.

Anything greater than that means you might not be properly utilizing centers of influence. It may also mean that you’re passively growing your business, when you should actively be searching out new business. If your percentage is less than 40-50%, you may want to consider why your clients aren't making referrals - are you asking for them?

You should always be marketing and promoting your business and services. People and relationships are our business, and when it comes to growing your business, prospecting is your sweat equity. Clients will come and clients will go - it is your responsibility to make sure you never stop actively looking for new clients.