Financial advisors are slow to adopt client testimonials in marketing, concerns about compliance and negative reviews.
From Yahoo Finance: 2025-07-01 06:00:00
SEC-registered firms are slow to adopt testimonials in marketing, despite the opportunity to use endorsements with proper disclosures. The new SEC rule allows testimonials and endorsements in advertisements, leading to a partnership between Mercer Advisors and Testimonial iQ to promote client reviews online. The trend is expected to grow over the next few years.
While testimonials have been effective in retail and healthcare, the financial industry is slowly embracing them. The SEC’s latest marketing rule permits testimonials and endorsements in ads, with specific disclosure requirements. RIAs must have a “reasonable basis” to ensure compliance, leading to some firms being cautious due to compliance concerns and fear of negative reviews.
Some financial advisors are hesitant to use client testimonials due to compliance fears and concerns about negative reviews. Firms like Wealthtender help screen testimonials for SEC compliance, but there is still hesitation among advisors about being the first to use them. The industry is navigating through uncertainty and seeking guidance on creating testimonials effectively.