By Graeme Mills, Content Manager for Simplicity Lone Beacon.
A successful client testimonial strategy for a financial advisory is twofold. First, you must understand what a persuasive, yet compliant testimonial is. Then, you must understand how to best solicit those testimonials in a way that prompts your target audience for a basket of persuasive, compliant testimonials. Before we jump into the compliance of soliciting testimonials, it’s important to understand why you’ll want to utilize this powerful marketing tool and the general process for successfully soliciting persuasive testimonials.
Why Use Testimonials?
Client testimonials are one of the most powerful tools for financial advisory firms looking to build trust and credibility with prospective clients. These authentic endorsements provide social proof, showcasing real-life examples of how the firm has helped clients achieve their financial goals. Testimonials humanize the advisory process, making complex financial strategies more relatable by highlighting tangible results and positive experiences. They also help differentiate a firm in a competitive market, demonstrating its value through the voices of satisfied clients. When leveraged effectively and in compliance with SEC regulations, testimonials can significantly enhance marketing efforts, foster client confidence and retention, and drive new sales and business growth.
But testimonials are impactful only if they follow the SEC guidelines. Jared Margolies, Director of Compliance at Simplicity Group, provided useful guidelines for any financial advisor looking to solicit client testimonials.
Understand Compliance Regulations
To solicit testimonials that comply with the SEC Marketing Rule, you’ll want to follow a clear set of practices and disclosures to ensure transparency and compliance. If you are working with a Registered Investment Advisor or Broker-Dealer, it’s important to notify their compliance department to ensure you comply with the firm’s specific requirements. For example, many firms prohibit paid testimonials such as Simplicity Wealth. Generally, these are the principles you should follow with any firm you work with:
- Understand the “Marketing Rule” Requirements
The SEC’s Marketing Rule, under the Investment Advisers Act of 1940, regulates testimonials and endorsements from clients and non-clients alike, whether solicited or unsolicited. An important distinction for Registered Investment Advisors is whether they’re registered with the SEC or at the state level. The new marketing rule, which allows the use of testimonials, endorsements, and third-party review sites, technically applies only to SEC-registered investment advisers. State-registered investment advisers must continue to follow their respective state regulations, which may or may not align with the SEC’s updated rule. Meanwhile, FINRA-registered brokers remain subject to FINRA’s advertising and communication guidelines, not the SEC’s rules for RIAs.
Key aspects to keep in mind include:
Disclosure Requirements: Advisors must disclose, clearly and prominently, any material conflicts of interest (e.g., if the person providing the testimonial is compensated) and any limitations or specific terms of the endorsement. This also means that, in the marketing material, you must disclose how the respondent was prompted for their testimonial, which may include how and why it was picked for use in marketing material. And crucially, every testimonial needs a disclosure describing the relationship and whether any compensation was received.
Even still, there are certain practices that disqualify a testimonial, whether it’s due to the process under which it was gathered, or the testimonial itself.
Prohibited practices include the following: False or misleading statements from the respondent (more on that later), testimonials gathered and/or displayed without the full consent of the respondent, encouraging or incentivizing positive responses in the testimonial prompt and soliciting process, discouraging negative responses in the testimonial prompt or soliciting process, and cherry-picking favorable testimonials without the proper disclosure and transparent documentation as mentioned above.
- Obtain Client Consent and Document Approvals
Always obtain the client’s consent to use their testimonial in marketing materials, ensuring they understand how it will be used.
Documentation should include the client’s acknowledgment that they have reviewed and approved their statement for accuracy.
Maintain records of all testimonials and their related disclosures to demonstrate compliance with SEC rule requirements.
- Include Required Disclosures in Solicitations
When asking for testimonials, disclose any compensation or incentives up front (if applicable). To reiterate, according to the rule, disclosures at the solicitation stage (separate from the publication itself) should cover the following:
- Compensation Details: If cash compensation, non-cash compensation, discounts, or incentives are offered in exchange for a testimonial.
- Conflicts of Interest: Call attention to any relationships that could be seen as a conflict, including whether the client is current or former, and consider making sure that, if there is a conflict of interest, it is shared with you so your firm can assess whether the response should be disqualified or a certain disclosure can be added in publication.
- Material Limitations: If there are any limits on the scope of the testimonial or endorsement.
An example disclosure could look something like the following:
<Client name> is an investment advisory client of the Adviser for <X> years. No compensation was paid as a result of these testimonials. (If applicable) This testimonial was solicited.
- Obtain Compliance Dept. Approval
As with any advertising or marketing materials, it is important to have the experts review your new webpage with testimonials or any applicable updates to your site. You are usually required to get approval for any new marketing materials or changes to existing materials. For many firms, such as Simplicity Wealth, this is a requirement as part of their policies and procedures within the compliance manual. The compliance team will ensure that what will be published complies with the SEC Marketing Rule.
Strategies to Gather Client Testimonials for Financial Advisory Firms
Client testimonials are invaluable for building trust and credibility, but gathering them requires a thoughtful approach to ensure they’re impactful in meeting your marketing goals. The key is to encourage clients to share positive feedback about their experience with your firm and services without delving into unnecessary details, boasting about past performance, or suggesting certain levels of performance can be attained. Here are some strategies to effectively solicit testimonials while adhering to compliance guidelines.
To avoid “cherry-picking” or targeting respondents too heavily, rendering the responses non-compliant, here are some steps to take:
- If soliciting testimonials through Google forms, Survey Monkey, etc. send the form to all clients. Not all clients will respond but this shows you are not cherry picking which clients you are soliciting.
- Give the clients the same amount of time to respond to the survey.
- If an RIA gets negative feedback from the form, don’t worry, you don’t have to publish it! But, as standard practice, the RIA should reach out to the client to confirm the comments and see why they received the negative feedback. These situations should hopefully be rare. The RIA should document the follow-up with the client and note why the negative feedback was not reasonable or there was a miscommunication on the intent of the survey. It should note in the documentation why it’s not an accurate testimonial.
Crafting the Right Prompt
The first step in gathering meaningful testimonials is crafting prompts for your target audience that strike a balance between specificity and openness. Too vague of a prompt, such as “Tell us about your experience,” might result in unnecessary details or off-topic responses. Conversely, overly specific prompts like “Did you like our services? ‘Yes’ or ‘No,’” fail to capture the client’s genuine voice. Instead, use prompts that guide clients to share their overall experience and feelings about working with your firm, such as:
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“What did you find most helpful about our financial planning process?”
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“What did you find most helpful about the initial onboarding process?”
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“How has working with [Firm Name] impacted your financial confidence?”
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“What aspects of our service help you feel confident in your financial future?”
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“What aspect or service of [Firm Name] has made the most difference in your life? Why and how?”
These open-ended yet guided questions encourage authentic and thoughtful responses while avoiding inducing unhelpful or non-compliant responses. While there are many different technicalities and timelines to administering a testimonial marketing campaign, having the right questions is the foundation of the whole thing! So, make sure you workshop them, edit them, and have a clear goal and desired response before finalizing them.
Once you figure out your prompts, then pick a survey platform. Popular ones include Google Forms or SurveyMonkey, but there are plenty of options to discuss with your team.
Don’t Forget the Medium When Planning Your Testimonial Marketing Campaign!
Keep in mind that you’ll need to decide what platform and in what form of media you want to share these responses. For example, if you wanted to run digital ads with these testimonials, you might want to make sure your outreach lets respondents know you might follow up with additional questions or asks. In addition, it’s important to have a process to evaluate responses and reach out to respondents with the best testimonials so you can ask for a photo or to approve a shortened version of their response if text limitations apply. Or, if you want to do a testimonial video ad, you’ll need a separate process for administering video responses that follow guidelines you’ll have to set. This is where a dedicated marketing team like Simplicity Lone Beacon can provide guidelines and assistance in monitoring and executing the process!
Solicitation Platforms and Methods
To maximize responses, use multiple platforms to reach clients in ways that are convenient for them. Email blasts with a link to a testimonial form on platforms like Google Forms or SurveyMonkey are highly effective. The email should include a clear purpose, simple instructions, and a link to the form. Here’s an example of a testimonial request email:
Subject Line: Share Your Experience with [Firm Name]
Body:
Hi [Client’s Name],
As part of our ongoing effort to deliver the highest-quality financial advisory services to you and your family, we welcome you to share your thoughts about your experience with us as your financial advisor! If your partnership with [Firm Name] has made an impact on your life, we’d love to hear about it!
Even better, we’ve made it quick and easy—just click the link below to fill out a brief form:
[Provide link to form]
Thank you for trusting us with your financial future!
Warm regards,
[Advisor Name/Team]
[Contact Information]
Notice how this message doesn’t disqualify or discourage critique or feedback, yet maintains an inviting and warm tone.
Additionally, text message campaigns with a link to the form can reach clients on the go, and social media platforms like LinkedIn can also be utilized to request feedback from clients who follow your page. Be sure to follow compliance guidelines for any public platforms as well as tailor your outreach process to the platforms you’re using. Again, this is where a dedicated marketing partner like Simplicity Lone Beacon can really come in handy!
Depending on what medium and platform you want to share the testimonials on, you may find it necessary to follow up to get more specific answers or have them provide the testimonial differently, whether over a recorded phone call, video call, or have them record a video. Once again, a dedicated marketing partner like Simplicity Lone Beacon can be a valuable partner in helping you strategize and execute these key actions, and maintain compliance in this iterative solicitation process.
Gathering and Reviewing Testimonials
To increase participation, reach out to eligible clients and follow up with reminders for those who haven’t responded. Timing is important—request testimonials after a positive milestone or client meeting when satisfaction is likely at a peak. To streamline the process, especially if you have a lot of responses, there are tools out there that can aggregate responses, and ensure a team member is dedicated to reviewing and vetting submissions. Look for testimonials that are concise, impactful, and compliant, avoiding any mention of past performance or specific results.
It’s important to understand that you will always get responses that won’t work for your business, whether they’re non-compliant, or don’t quite answer the question. That’s where it’s your task to then pick the best responses, reach back out to the respondent for consent, any edits, or further participation, and go from there.
Whether you’re looking to use these testimonials for your website, an ad campaign, a video for commercial use, or one of many other use cases, you’ll need to follow up with respondents and ask them for permission to
Ensuring a Comprehensive Process
An effective process for gathering testimonials involves clear prompts and thoughtful review. Have a timeline and system for when and how clients are solicited, track responses, and maintain a repository of approved testimonials for future marketing use. In addition, consider having a compliance officer review the prompts, processes, and responses to ensure adherence to SEC regulations. By combining strategic prompts, multi-platform outreach, and a diligent review process, your firm can effectively collect high-quality testimonials that resonate with prospective clients and generate marketing and sales value.
About the Author: Graeme comes to Simplicity Lone Beacon from the health-tech industry where he produced digital content ranging from profile pieces to research articles to multimedia blogs and videos. Prior, he produced marketing content and videos for brands including a documentary for a Boston-based environmental non-profit, and has published work in Altcoin Magazine, Fenway News, and other publications. He brings this experience—along with an academic background in economics—to Simplicity Lone Beacon’s content marketing initiatives for financial advisors.
