A Guide to SEC Marketing Rules for Investment Advisors

Is Your Marketing Compliant?

In today’s digital-first world, investment advisors can’t always rely solely on referrals and word-of-mouth for business growth. While many advisors have traditionally depended on these methods rather than traditional marketing spend, the SEC’s Marketing Rule has created new opportunities for engagement.
Organic marketing presents a compelling alternative to paid advertising, emphasizing sustained strategies including blog content, social media presence, and now client testimonials and endorsements. The impact is significant – 92% of consumers consult online reviews before making decisions, with testimonials emerging as one of the most potent content marketing tools available.

The SEC’s updated rules now permit SEC-registered firms to incorporate client testimonials and third-party endorsements in their marketing efforts. This enables advisors to showcase authentic client experiences and leverage endorsements from professionals like attorneys or business partners to establish credibility.

However, the power of testimonials and endorsements comes with strict SEC disclosure requirements.

Advisors must maintain transparency by:

• Clearly identifying whether testimonial providers are clients
• Disclosing any compensation provided
• Highlighting potential conflicts of interest

These disclosures need to maintain equal visibility with the testimonials they accompany and must be presented clearly and comprehensibly.

How to Collect and Use Testimonials the Right Way

Building an effective testimonial strategy can involve multiple approaches. Consider implementing client satisfaction surveys to gather feedback, encouraging clients to share their experiences through Google or LinkedIn reviews, or creating video testimonials for your digital platforms.

Authenticity matters – including both positive and constructive reviews helps establish genuine credibility and trust with potential clients.

While the SEC’s Marketing Rule specifically addresses SEC-registered firms, state-registered advisors should carefully review their local regulations. Some firms may opt to maintain internal policies that restrict testimonial use entirely.

The intersection of compliance and marketing requires careful navigation, but when executed properly, can effectively demonstrate your expertise and attract new clients. If you need assistance ensuring your compliance frameworks support your marketing initiatives, reach out to My RIA Lawyer at 770-462-2118.