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It was 40 years in the making, but the deadline for the new SEC marketing rule is finally upon us. It introduces many exciting opportunities for financial advisors. It also brings tremendous uncertainty around how to best take advantage of the new regulations.
Testimonials and endorsements
One of the biggest changes in the updated rule is allowing the use of testimonials and endorsements in marketing efforts. The unified SEC marketing rule does a detailed job of defining what is a testimonial and what is an endorsement, and it adds a considerable language around conditions that must be satisfied if advisors want to use them in their marketing efforts.
How can advisors and their marketing teams decide how to proceed?
In any other industry, consumers rely heavily on online ratings and reviews to inform their purchases and life decisions. In 2021, 77% of consumers reported ”always” or ”regularly” reading online reviews when browsing local businesses. The five-star rating and review format is immediately recognizable to consumers, and they place tremendous value on having the voice of other consumers represented when important decisions are made.
Can advisors use online ratings and reviews?
The short answer is “yes”! The longer answer is, "Yes, but advisors must be careful." If an advisor wanted to implement a review-generation campaign on a site like Google, they would have to be extra careful to successfully execute and benefit from it.
But there’s another way – first-party reviews – reviews that live on your own website. It’s the path that swept through healthcare system since 2014, with most hospitals and healthcare systems now publishing their own survey data on their websites to provide transparency around the patient experience with individual doctors.
Why online reviews are the best way to embrace testimonials
There are many reasons, but the biggest ones are these:
1. No payment required = less regulations – a large portion of the regulations around testimonials and endorsements are circumvented if no payment is offered. Consumers have been well-trained by other industries and are generally happy to provide a review, if asked, with no compensation needed.
2. If everyone can leave a review, you’re being fair and balanced – Any time you select one or two voices from among your clients, you’re leaving out many other voices that could paint a more representative picture of the client experience. If you solicit reviews from all clients and publish everything you receive, you’re avoiding the concern of presenting a biased perspective.
3. It’s what consumers want – Consumers are already familiar with the format of online ratings and reviews, and they look specifically for star ratings in their Google search results them when doing online research. The more client opinions advisors share, the more confidence they will convey to prospective clients.
Best of all, it’s easy
Consult with your compliance team before undertaking a new marketing effort. But if you work with the right partner, it’s easy to get started collecting client feedback, developing a publishing policy, and sharing your clients’ online ratings and reviews on your own website. Once implemented, you can expect to see a boost your SEO performance and to win more referrals. Online reviews have established themselves as a valuable social currency, and prospective clients will naturally gravitate towards advisors who have more "votes of confidence" than those who have none.
Don't get left behind. You don’t even need to wait until November 4, 2022 to get started.
Whit Lanier is the founder and CEO of Amplify Reviews. A serial entrepreneur, Whit’s previous start-up was the leading healthcare technology vendor for enabling hospitals to publish verified patient ratings & reviews. By 2021, this platform had processed over 50 million patient reviews.
Read more articles by Whit Lanier
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
