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What Hybrid RIAs Should Know About Testimonials and The New SEC Marketing Rule

When it comes to the SEC’s new marketing rule regarding testimonials for financial advisors, hybrid RIAs are looking forward to modern guidelines that enable them to publish testimonials on their websites and integrate them into their marketing practices. 

These guidelines are part of the SEC marketing rule change for financial advisors and how they can promote their services, specifically when it comes to their use of testimonials. Previously professionals in other industries could use testimonials and reviews to help them market their services, but financial advisors in a highly regulated industry could not. 

Some financial advisors are excited about the new marketing opportunity and are eager to get started while others are more hesitant to dive into uncharted territory. This may be particularly true for hybrid RIAs because they are regulated by both the SEC and FINRA. 

Read on to learn more about the SEC marketing rule and what hybrid RIAs need to know before they use this marketing strategy.


Why Should Hybrid RIAs Start Using Testimonials?

As with traditional RIAs, hybrid RIAs are in a unique position that requires trust from their clients. After all, most people take their money seriously and don’t want just anyone advising them on how to protect and grow their assets when they invest in the securities markets. This is where testimonials and reviews can have a big impact. 

For as long as humans have been able to communicate, the fascination of what others are doing and experiencing is human nature and simply looks different in the modern technological environment that we have today. For example, people previously needed to have actual conversations to obtain information and now it can be done with a few keystrokes and clicks.

Moreover, testimonials and reviews can be shared multiple times in the virtual world. There’s no better example of this than with social media. These platforms make their own transactions, and the commodity is social currency. 

Another benefit of promoting reviews and testimonials for hybrid RIAs is the online SEO implications. Search engines, like Google, take many factors into consideration when it comes to where users appear on SERPs (Search Engine Results Pages). 

For hybrid financial advisors who want visibility on the top of pages, a strong SEO strategy is a must. Utilizing testimonials and reviews is a great way to boost SEO, assuming those reviews are on a legitimate third party site.


How Can Hybrid RIAs Can Take Advantage of the New Marketing Rule?

As with traditional RIAs, hybrid RIAs are subject to specific guidelines for when and how testimonials/reviews are collected and how they can be promoted – both online and offline. There are also best practices set forth by industry digital marketing professionals for how financial advisors can best utilize the new rule. 

The following information will cover this information for all financial advisors/RIAs, then will detail the additional considerations set forth in the SEC rule language for hybrid RIAs.


How to Get Reviews and Who to Ask

According to the SEC’s Marketing Rule, financial advisors are allowed to seek out reviews and testimonials, if they reside on approved 3rd-party platforms. These solicited reviews can then be used in the marketing and advertising efforts by the financial advisor. 

When deciding who to ask for reviews and testimonials, keep in mind that they don’t necessarily have to come from actual clients. Testimonials can come from people who aren’t clients, but who serve as a reference to the integrity, character, or work ethic of the financial advisor. Examples of these types of testimonials are colleagues, community members, etc. 


Where Can Hybrid RIAs Share Testimonials?

This new marketing rule doesn’t only allow the inclusion of testimonials and reviews on financial advisor websites. While that’s a good place to start, that’s not where the sharing should end for financial advisors who want to maximize their online presence. Other places to share include 3rd-party review platforms, social media channels, and even offline.

When it comes to the above-mentioned review platforms, there are many to choose from. Keep in mind, however that each platform is different and not all are approved for promotion/sharing per the Marketing Rule. Additionally, some platforms allow for both solicited and unsolicited reviews, meaning there is little to no control over some of the reviews published. To avoid any compliance missteps, it’s recommended that RIAs become familiar with the specifics of a platform before participating.

The social media aspect of the SEC ruling will have a positive impact on financial advisor digital marketing. By combining the popularity and reach of social networks with the validation of client and character-based testimonials, financial advisor marketing can have both a wider reach and endorsement through peers. 

An important note on social media: some platforms aren’t built to accommodate social posts with a large amount of text which means that the required disclosures to share testimonials will not fit. Knowing about the various social platforms and their differences can help financial advisors steer clear of any potential violations. 


Offline Review Sharing

While it might feel like taking a step back in time to the days before the internet and digital marketing, there are some forms of offline marketing that still have a place as part of a comprehensive marketing campaign. For example, while phone books aren’t the promotional vehicle they once were —business cards, billboards, print ads, and even radio advertisements can be beneficial for sharing and promoting testimonials.  


Always Keep Compliance In Mind

Because hybrid RIAs have different fee and commission structures and conduct business differently from traditional RIAs, there are some additional instructions from the SEC ruling regarding reviews and testimonials. Hybrid RIAs are encouraged to consult their compliance officer and/or review the specifics of the SEC ruling for guidance before engaging in the sharing and promotion of reviews and testimonials.


Get Started

For hybrid RIAs who are new to the idea of sharing testimonials/reviews, or even those who may be hesitant for fear of violating SEC rules, there is good news! Digital marketing agencies who regularly work in the financial advisor space specialize in how to make the most of the opportunities available for financial advisors now and in the future. 

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