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The following information was provided to us by the author on September 10, 2019, at approximately 3:30pm ET:
Previously, I published my opinion on whether online financial advisor reviews were allowed under SEC and FINRA rules.
While the SEC’s version didn’t, to my knowledge, include language prohibiting the solicitation of reviews, an astute observer pointed out the presence of the word “unsolicited” in FINRA rules here:
“(FINRA) does not regard unsolicited third-party opinions or comments posted on a social network to be communications of the broker-dealer or the representative for purposes of Rule 2210, including the requirements related to testimonials in
paragraph (d)(6).”
…and that caused me to dig deeper. When I did, I found a recent case that occurred after my original research that seems to show the SEC forbids solicitation of reviews as well.
I am still of the opinion that online financial advisor reviews benefit both the public, and advisors; and the rules around that seem to be evolving, but it’s clear that, for now, soliciting such reviews is off-limits.
The original article follows:
One of the most exciting online marketing opportunities for financial advisors is online reviews. But when I broach the topic with my clients, there’s often confusion around whether they’re prohibited by FINRA or the SEC.
The short version: It’s okay to encourage and receive online reviews, as long as certain guidelines are met.
Here’s a brief summary of the most recent guidance in regard to Google reviews (I’m limiting the discussion to Google because they have the most favorable risk-reward profile for advisors):
It’s okay to:
- be reviewed on Google;
- request Google reviews from clients;
- run ads on Google that may appear alongside your reviews, as long as it’s clear that the ad is sponsored content; and
- direct people to the reviews in newspaper, radio and television ads.
It’s okay under certain conditions to:
- re-publish Google reviews to your website or social media accounts. But, due to the complexity of the restrictions, I don’t recommend doing so until the SEC provides more clarity.
It’s not okay to:
- draft, submit, and/or directly or indirectly author reviews in your own name, a third party’s name, or an alias, assumed or screen name;
- write and/or have someone else post a review you wrote;
- pay or otherwise compensate someone for posting a review;
- publish the review(s) in newspaper, radio, or television ads;
- direct an employee or supervised person to write and/or submit a review; or
- respond to, alter, delete, or “like” the review.
Before I get to the good part, the obligatory disclaimer: I’m a marketing consultant, not an attorney or regulatory expert. None of the information presented in this article constitutes or should be construed as legal advice.
Having established the box we’re playing in, let’s talk about what makes this opportunity worthy of your time and effort.
Impact on referrals
When I ask my clients what their best source of new clients is, most cite referrals. Having positive reviews on Google is very helpful in a referral scenario.
A prospect that’s been referred to you is highly likely to do some online research, and that research will probably begin with Google. So let’s take a look at what a prospect might see when they search for a specific advisor or firm (aka, a ”branded” query).
The image below contains screenshots of the search results of branded queries for two wealth management firms. The results for the top query indicate that one firm has received positive reviews on Yelp (left side) and Google (right side), whereas the bottom image shows that the other firm has no reviews.
At this point, the prospect has been exposed to the presence, or lack, of “social proof” of the advisor’s competency. But how much does that matter? Again, the research is clear. According to this report, online reviewers have overtaken friends, family and colleagues as the most trusted source of product information.
Lead generation
The power of online reviews to help bring in new business isn’t limited to branded searches. Google reviews are a key factor in search rankings for non-branded, localized searches.
In this scenario, when a prospect searches on a non-branded term like “financial advisor near me,” the firm with positive reviews benefits in two ways: It shows up higher in the rankings, and when it does, those stars are staring the prospect right in the face. That means more clicks to your website, and positive brand perception, which both translate into more, and higher-quality, leads.
Do these non-branded searches actually happen?
The graphic below shows the top 10 search terms related to “financial advisor near me” in the U.S. over the last 30 days. Removing the “financial advisor jobs” query, there were around 26,000 searches last month – and you’ll notice that most are trending upward.
Fishing where the fish are
Given the need for firms to attract Millennials and Gen Zers, the fact that these cohorts utilize and trust online reviews to guide their decision-making means that those who take advantage of the opportunity stand a much better chance of diversifying their client base.
Getting reviews
Given that these reviews depend entirely upon your clients taking action, how should one go about encouraging them? At a high-level it’s not unlike asking for referrals, but here are some ideas:
- Ask in-person, over the phone, or in a one-off email.
- Send a bulk email to your client database.
- Add a link to your email signature.
- Post a sign in your office.
- Have a dedicated iPad or tablet in the office.
There are software applications that help businesses solicit and manage reviews, but be aware that most have settings that allow administrators to minimize unfavorable reviews, and using those features would likely run afoul of SEC and FINRA rules.
Conclusion
Big-time digital marketing success comes from identifying and exploiting high-yield, low-competition opportunities. Having established the yield potential, how much competition is there?
To find out, I searched for “financial advisors in Frisco, TX” (my home-base and a booming, affluent suburb of Dallas with lots of out-of-state transplants). I used Google’s map interface, which shows how many Google reviews each listing has. Of the 50 listings I looked at, five (10%) had one or more review. Of those five, two had one review, one firm had two reviews, one had six, and one had 20 reviews.
Given that, I’ll leave you with two questions:
- If you were a prospect conducting the same search, who would you trust the most?
- If you do nothing, how long will it be before your listing is buried in a sea of stars from your competitors’ reviews?
Lee Delahoussaye is the founder and principal consultant of Mindtap Marketing, a consultancy dedicated to helping financial advisors and wealth management firms grow their businesses with online marketing. He has worked with financial services brands including Bank of America, United Capital, Swell Investing, and Carter Financial Management, and his work has garnered multiple industry honors including HubSpot Impact and ADDY awards.
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