By Sarah Falcon. Updated 2026-10-08.
Referrals are the most-used and lowest-cost way RIAs win clients. In the 2026 Kitces study, 88% of practices used client referrals. The growth they bring slows as a firm ages, and the data points to a clear niche, a thank-you, and a second and third source of clients.
Client referrals were used by 88% of practices and referrals from centers of influence (COIs) by 64%. Client referrals had a revenue acquisition cost (RAC) of $0.34, the cost of each new dollar of client revenue and one of the lowest of any tactic.
New-client growth from referrals was 11% at actively growing practices under five years old and 2.6% at those in business 20 years or more. High-growth practices drew 33% of their new client revenue from referrals, against 80% at other practices. Other tactics together supplied 60% to 75% of new client revenue at high-growth practices.
Kitces calls the pattern a "referral coasting zone." A firm gets enough referrals to grow modestly, and so does not build other sources.
In a separate 2026 survey of 1,000 investors who work with an advisor, reported by WealthManagement.com, 45% found their advisor without a referral, and 50% of those with $5 million or more did. InvestmentNews reports that referrals were still the most common route and that investors often add their own research. The two surveys ask different groups and different questions, so their figures differ.
In the Kitces study, 29% of advisors proactively ask for referrals, and 11% of those who use referrals say their process is well defined.
Practices that do not proactively ask had referral-driven client growth of 5.4%. Practices that ask multiple times a year had 3%. The cost per new revenue dollar was $0.05 for practices that do not ask and $0.43 for those that ask more than once a year. Kitces notes that part of this may reflect firms with fewer referrals asking more often.
Practices that neither actively nor passively promote referrals grew 6.3% from them. Practices that did some combination grew 4.0%.
Kitces counts a practice as having a niche when 75% or more of its new clients fall within one target market. Those practices had referral-driven client growth of 5.0%, against 4.5% for the others.
Among practices with a niche, stating it prominently on the website went with a referral RAC of $0.06 against $0.13, and growth of 5.0% against 4.1%. A clearly stated ideal client profile went with 0.7 points of added growth.
79% of advisors who rely on client referrals thank clients. Growth was 0.6 to 0.8 points higher where the thank-you was a meal, a gift card, or a gift certificate. Thanking clients went with a modestly higher RAC.
CPAs (used by 89% of advisors who work with COIs) and estate planning attorneys (79%) supply most COI referrals. High-growth practices were more likely to work with COIs tied to their target market: 37% against 21%.
These are associations in self-reported data.
Should an RIA ask clients for referrals? In the Kitces data, practices that asked often had lower referral growth and a higher cost, and part of that may be firms with fewer referrals asking more. Record your own numbers and decide from them.
How much growth should come from referrals? High-growth practices in the study drew about a third of new client revenue from referrals, against 80% for the others. What matters for your firm is whether you can name its other sources.
A second source of clients starts with a goal. How to choose one growth goal
A 30-minute call with Sarah Falcon. We talk through where your clients come from today and where you want growth to come from.