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Home  /  Financial Marketing   /  4 Ways to Make the Most of the SEC Testimonial Rule

4 Ways to Make the Most of the SEC Testimonial Rule

sec testimonial rule

Something shifted in the finance world on December 22, 2020.

That was the date that the Securities and Exchange Commission (SEC) made amendments to the Investment Advisers Act of 1940.

The updated SEC advertising rule allows advisors to use client testimony in their marketing strategies, something that they would have been penalized for less than a year ago. Now, they can even be social on social media! 

These are huge opportunities for financial firms to grow their online presence and authority. Don’t be left out; get inspired with our 4 ways to make the most of the new SEC testimonial rule.

new sec testimonial rule

Changes to the original Advisers Act of 1940 have been a long time coming.

A Word of Caution

Before going to town on these great new ideas, take a moment to review the new Investment Adviser Marketing rule.

Yes, the SEC changed some of its outdated policies, but your company must remain in compliance if you want to stay open.

You should always consult with your compliance team before establishing any new marketing strategies, and be sure to use actual client testimony, not your own words.

Publishing fake reviews will get you in a lot of trouble, not just with the SEC but with Google and future clients, too. Be honest, be cautious, and remember: Don’t post anything your grandmother wouldn’t want to see.

And now, on to 4 things you can do to take advantage of the SEC testimonial rule.

1. Be Present in Google Reviews

Yes, we’re starting with Google. It’s our bread and butter, and it’s likely to have an enormous (positive) impact on your business.

Why? People trust third-party reviews.

They’re objective, and unlike skewed, hand-selected, obnoxiously positive reviews that businesses slather all over their websites, Google reviews put the customer first, not the business. That’s powerful psychology at work.

sec testimonial rule google reviews

Here’s our Google Business profile complete with lots of reviews.

Treat reviews like actual client testimony. Respond to every review, whether it’s scalding or sweet, and always be polite.

People look to see whether companies care enough to respond to a customer’s concern; they want to know that you’ll be attentive and actually care about their needs. Take two minutes to respond to concerns, as trivial as they may be.

2. Get Verified in Local Service Ads

Another popular Google product, Local Service Ads (LSAs), displays your business profile to people in your geographical area who are ready to hire.

If you’re approved and someone searches for a financial advisor, your profile will show up above organic search results and paid ads. Your face will be the first that customers see, and that’s powerful for these reasons:

  • People want good results quickly.
  • Customers will trust you if you’re at the very top of results.
  • Having a profile in Local Service Ads gives you an air of exclusivity. You have to be vetted and chosen to be listed.
sec testimonial rule local service ads

These are the Google-Screened Local Service Ads results for the search “plumber near me.”You’ll see that they’re listed above PPC ads, which are listed above “regular,” organic results.

Click here to learn more about Local Service Ads. When you’re ready to get your profile out there and bring in more clients, call EverSpark. We’re proud to offer top-notch LSA and PPC services at competitive prices. 

3. Ask Clients to Make Testimonial Videos

Potential customers want to know that you work with real people, actual customers who share their own problems and concerns. Lucky for you, the new SEC marketing rules open up the opportunity to use client testimony in the most easily-digestible form.

Why are videos so powerful?

In a word, neuroscience. Humans absorb visuals 60,000 times faster than text.

And people don’t just absorb visual information quickly – they make snap judgments from what they see in a fraction of a second. You’re in the homestretch if you can make that judgment a positive one.

In a world saturated with content and distractions from all angles, the speed at which you can engage a client is crucial. It’s easy to engage clients, and have them form a positive opinion of you, by opening the video with a client’s friendly face.

sec testimonial rule video

Your clients don’t need a setup like this to make brief, high-quality review videos. They can simply use their phone.

84% of consumers say they were influenced to buy a product or service by watching a brand video.

You don’t have to spend thousands of dollars. You don’t even have to spend $1 if you have the bandwidth to work in-house.

Reach out to clients who are satisfied with your services and ask them to record a short, 15 to 30-second video explaining why they like or trust your firm. Don’t give them a script or too many pointers; the best videos come naturally.

Post the videos on your website, your social media accounts, and even in email newsletters.

Important: To be compliant with the new SEC testimonial rule, make sure all client videos are pre-recorded and not done live (i.e. on Instagram Live). 

In the video itself, you need to include a clear and prominent disclosure regarding whether the speaker is a client and if they’re being compensated for their statements. You should also ask your compliance team to approve the transcript before posting it.

4. Interact on Social Media

Investment advisors, welcome to the 21st century! Thanks to changes made by the SEC, your firm can now be social on social media.

sec testimonial rule social media

Like, comment, and share to your heart’s content (but stay in compliance).

These more lenient guidelines have been years in the making, but don’t get too carried away. You’re still subject to regulations, but the Committee has suggestions to help you stay in compliance with new SEC rules:

  • Prohibit employees from personally marketing advisory services on their social media profiles.
  • Conduct periodic training and get employees to sign compliance agreements.
  • Periodically review content that’s publicly available on employees’ social media accounts.

If you’re worried about who might share or comment on your posts, fear not. The SEC stated that advisors aren’t responsible for third-party likes, shares, and endorsements as long as they don’t delete, alter, or prioritize those postings.

So what are you waiting for? Get involved and show potential clients that you’re likable and relatable (only if you are, of course).

We recommend being active on LinkedIn, Snapchat, Facebook, and Instagram. Some finance companies have taken to TikTok, but at this time, it’s probably best to avoid. Companies that use TikTok in a cheap or overly silly way run the risk of looking desperate and trying too hard to be “hip.”

Keep it natural, and always represent your company the way it deserves to be represented.

EverSpark can handle all of your SEO, website design, paid search, social media, and content needs. Call us to learn more about SEO for financial services.