A new approach to earning referrals

A new approach to earning referrals

Mary Kate Gulick | February 20, 2019

When Dan Allison began consulting financial advisors, he figured helping them with client growth would be easy. His background was in mental health, after all. He understood how people thought, how they made decisions. It should be simple, right?


Dan quickly realized that the work required to find and acquire new clients was anything but easy. He also discovered that the best clients came from referrals.

It’s this universal challenge that inspired Dan and his firm to spend the last 17 years researching the behavior behind referrals. And this year at National LINC, the TD Ameritrade Institutional advisor conference, Dan shared his findings with nearly 2,000 advisors on how they can more effectively generate referrals.

Why don’t clients refer?

Many advisors think that if clients are willing to trust an advisor with their money, they’d automatically be willing to refer their advisor to friends and family. Nothing could be further from the truth.

“The problems we have with getting clients to referrals is trapped inside their heads,” said Dan to his audience at National LINC, the TD Ameritrade Institutional advisor conference. “The problem isn’t creating advocates -- you’ve already done that. The problem is creating capable advocates.”

Of course, referring someone to a close friend or family member is a risk for your client. That referral, if the relationship goes bad, could negatively affect their relationship with that person.

Beyond that, the reasons clients don’t refer are relatively straightforward and simple for advisors to remedy with intentional efforts. According to Dan Allison’s research, clients don’t refer because:

1. They’ve never been asked

2. They don’t know who you want to work with

3. They don’t know how to explain what you do

4. They don’t know how to make the introduction

5. They haven’t had a referable experience (harsh, but true) 

These reasons for non-referral are universal, no matter what your business or who the individual is that is referring you.

So how do you start the referral flow?


Dan’s background in mental health taught him about the need to conduct research to learn how people think. Why not apply that to his advisory career to unravel the mystery behind why clients don’t make more referrals?

Advisors need a reliable and consistent way to get feedback from their clients. What do they value about their experience with you? What can you do to build a better experience? What do they think you offer and what don’t they know? How do they feel about referral?

Armed with the knowledge of how to build a referable experience, you can make conspicuous changes to how you serve your clients. Conduct annual meetings and provide frequent updates on what you’re doing to improve your offering and service to them. From there…


Many clients don’t refer because it never occurred to them to do so. Simply ask. Would you be willing to refer me to others like you? If clients are game, you can provide them with the tools to make them comfortable referring you. If they say no, you need move no further. Work with the willing.

“Referrals are not a taboo topic,” Dan said. “The way we’ve been trained to approach them is.”


First, tell your clients who you want to work with. Who are those top 20% that are hard to lose and harder to replicate? Tell them the type of person you want to work with and ask if they know anyone like that who they could introduce you to.

Second, make sure they are briefed on all your offerings. If they only work with you on one or two services, they may have no idea what services you offer that could benefit others in their lives.

Finally, give them next steps to make the in-person introduction. How to begin the conversation, how to make the date, and what to say when you’re introduced. Partially scripting or outlining the experience for them could make them feel more comfortable.

Is it worth it?

In a word, yes. Dan says that his referral strategy has provided more, higher quality referrals, better retention, better client relationships, and more open communication with his best clients.

“The best way to grow a relationship business is through a referral,” said Dan. “But it can also be the most unpredictable method.” This strategy is a way to add some predictability to a powerful client recruiting vehicle.

Want to learn more?

View Dan Allison’s full presentation from National LINC here.


Dan Allison is an independent financial advisor. TD Ameritrade does not endorse or recommend any advisor and the use of the TD Ameritrade name/logo does not represent the endorsement or recommendation of any advisor. TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. Used with permission. 

TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2019 TD Ameritrade.