The Securities and Exchange Commission (SEC) recently updated SEC advertising rules to allow the use of testimonials in financial advisor advertisements, subject to certain restrictions.
Prior to this update, called the Investment Adviser Marketing rule, the Investment Advisers Act of 1940 restricted financial advisors from using testimonials to promote themselves. Now, the door is open for registered investment advisors (RIAs) or financial advisors to leverage their online reviews to attract more clients.
The SEC acknowledged that consumers today rely on online resources when buying goods and services. By allowing financial advisor online reviews to be more accessible, investors can make better financial decisions and advisors will strive to improve their services. It’s in the SEC’s best interest to connect every investor with an excellent financial advisor to keep the industry thriving.
It’s a fact that financial advisors use the online space to attract potential clients. With the right digital strategy in place, professionals in this industry can expect great rewards from online marketing.
Financial advisor reputation management or review management experts can best help you get online reviews for your business and reap the benefits of search engine optimization (SEO) for financial advisors. Most importantly, all financial advisor marketing efforts should stay within SEC regulations.
By employing the right optimization tactics, consistently nurturing your online brand and reputation and now, boasting about your superior customer service, you can rank higher on search results and drive more traffic to your website.
In this blog post, we cover everything you need to know about the impact of financial advisors reviews, specific financial advisor marketing opportunities, how to increase reviews and how to get good reviews the right way.
The New SEC Rule Covering Google Reviews for Financial Advisors
Given that financial advisors belong to a highly regulated industry, you can expect strict conditions and limitations on how to use Google reviews in your marketing efforts. It’s still the SEC’s role to protect investors from being misled by financial advisors reviews. The new SEC rule, called the Investment Adviser Marketing rule, is designed to comprehensively and efficiently regulate financial advisor marketing communications.
The Securities and Exchange Commission Investment Advisers Act of 1940 contains comprehensive guidelines governing registered investment advisers or financial advisors. Advertising and solicitation rules were first adopted in 1961 and 1979, respectively, and have since gone through waves of changes.
For clarity, let’s consider some important terms as defined by the SEC:
• Advertisement: when feedback such as reviews is used to attract clients
• Testimonial: an advertisement sourced from a current client or private fund investor
• Endorsement: an advertisement sourced from a promoter or non-client
• Third-party ratings: given by rating agencies not related to the financial advisor
• Review: unsolicited third-party feedback on review sites such as Google
The latest update to the Investment Advisers Act was the adoption of the Investment Adviser Marketing rule, which accounts for both advertising and solicitation regulations, effective on May 4, 2021. The most notable change was the relaxed SEC advertising rules on using testimonials, endorsements, third-party ratings and performance reports in advertisements. This marketing tactic was strictly prohibited but is now allowed, albeit under specific conditions.
There is a list of seven principles-based general prohibitions that applied then and still apply today. They revolve around fairness and transparency in financial advisor marketing and advertising. One crucial general prohibition restricts “cherry-picking” or intentionally focusing on testimonials that benefit you. Back in 2014, a financial advisor had to publish both negative and positive feedback to avoid violating rules – it was all or nothing.
But with the relaxed SEC advertising rules, using financial advisor reviews in a testimonial is generally okay if you comply with all the general prohibitions and additional conditions specific to the type of advertising you are doing.
What Are the Conditions?
The most important among the additional conditions are the required disclosures. Your advertisement must disclose if the person giving the testimonial or endorsement is compensated (cash or non-cash), if they are a client or not, and if you have any material conflicts of interest. These are only baseline conditions, but the final rule will contain various requirements for different scenarios.
Important things to keep in mind:
• It’s best to ask for permission before using a review as a testimonial for privacy reasons.
• Even if you don’t have to display all of your reviews, you should include a link to where the review came from and give your audience access to your unfiltered feedback.
• There is no strict rule against review responses and social media comments, but you should err on the side of caution. You become responsible for what is being said about you if you specifically engage in any given comment.
• Especially when using performance reports in your advertisements, you need to be able to substantiate your claims.
• The key takeaway is that you can leverage reviews and testimonials on your website and within your marketing strategies if you use them responsibly.
Important Note: Your primary resource on advertising your reviews and testimonials should be the new SEC rule on investment adviser marketing. These tips simply provide insights on leveraging financial advisor ratings and reviews based on years of reputation management agency expertise.
Why Financial Advisor Ratings and Reviews Matter
Tim Clarke, senior reputation manager at Rize Reviews, said,
“The SEC probably wanted to make it easier to showcase the best financial advisors. If investors have more insight into the track record of financial advisors, they can decide which financial advisor would best suit their needs. Investors give advisors control over their hard-earned money, so it’s natural for them to need the assurance and social proof that reviews and testimonials provide.”
Reviews are important in the context of Google reviews for financial advisors and SEO for financial services – but keep in mind that the same benefits apply to all industries and reviews on other platforms such as Yelp and Facebook.
Here’s what you can gain from online review management services:
- Financial Advisors Online Visibility
The industry benefits of financial advisor reviews are similar to the value for search engines. Google’s goal is to deliver the best, most relevant and most credible answers to every user’s queries. Online reviews are SEO ranking factors that tell Google your website provides value and people trust you. The goal of SEO for financial advisors is to improve your reviews for higher rankings on search engine results pages (SERPs). With SEO for financial services on your side, more people can find your business online. Google will always favor an advisor with great Google My Business profile reviews, so glowing customer testimonials also help surface the most trusted financial advisors online.
- Improved Sales
A high star rating and excellent testimonials serve as social proof. Your reviews have the natural power to influence others – another person’s purchase decision becomes easier because your client has experienced a favorable outcome. You increase your sales potential when clients hesitate less and choose to engage with you.
Studies show a one-star increase in Yelp rating leads to a 5 to 9 percent increase in revenue. What’s more, increasing your reviews from zero to five increases a person’s likelihood to purchase from you by 270 percent.
It’s clear that reviews and testimonials need to be part of every financial advisor marketing plan and financial advisor reputation management strategy. But how, exactly? The best approach is to consult with an online reputation management company, but there are industry best practices you can apply to your review management strategy.
3 Ways To Leverage Your Financial Advisor Ratings and Reviews
Investors can stumble upon financial advisors online at any given time. But if you’re not proactive about marketing your financial advisor online reviews, you aren’t benefiting from the updated SEC advertising rules. Any leading reputation management agency will tell you that official Securities and Exchange Commission rules always come first as you seize new marketing opportunities.
Here are three ideas on how to use your financial advisor reviews:
Showcase Reviews on Your Website
Your website is likely your primary client touchpoint and browsing your homepage is the first step clients will take. Let your reviews do the convincing! There are online review management software and tools that make it easy to display financial advisors reviews. One example is a review widget that shows off your customer testimonials on your site. This generally aligns with the SEC requirement against cherry-picking what your prospects see.
Include Reviews in Your Marketing Efforts
Your reviews should also be easily accessible through content on digital channels such as social media, email and messaging platforms. What’s more, reputation management software can automate email and SMS review requests to give you more testimonials to strengthen your financial advisor marketing plan and initiatives.
Focus on Improving Your Review Score
While it’s natural for you to desire only good reviews, this isn’t something you can control. But one thing online review management services help with is raising your average review score or star rating. You can opt to post your review ratings instead of the review content.
“Some prospects won’t read the body of the review but will check your star rating. An online reputation management company can guide you on how to get your scores up and get every public forum rating as close as possible to five stars,” said Clarke.
How Financial Advisors Can Get More Google Reviews
If you’re wondering how to increase reviews, how to get good reviews and how to use Google reviews to grow your business, you’re on the right track. You know why you need reviews and what you can do with them, so the next step is to get more Google reviews and get online reviews for your business the right way.
We’ll answer the three most common questions on review management:
How To Increase Reviews
It’s quite simple – to get more Google reviews, you need to ask for them. But thanks to online review management software, this can be automated and made to work for you. SEC marketing rules don’t particularly prohibit asking for reviews, but make sure you aren’t crossing the cherry-picking line when sending review requests.
How To Get Good Reviews
While getting five-star reviews is entirely dependent on the quality of your services, one thing reputation management software can help you with is the timing of your review requests. You can send them at “peak happiness times,” like when you’ve just wrapped up a great meeting or once you’ve been able to drive real results for your client.
How To Use Google Reviews To Boost Sales
The good news is that reviews serving social proof already go a long way without you doing anything. But you lose out on a lot of sales potential if you don’t showcase your reviews. You need holistic financial advisor marketing solutions and tailored reputation management software and services to boost your sales.
Get Started With Financial Advisor Reputation Management
As the digital landscape evolves, we can expect the SEC to recognize new ways to improve the industry. Rules governing Google reviews for financial advisors and SEO for financial services will most likely change. What’s important is having a robust review management strategy you can easily pivot when needed – and working with industry experts places you in the best position to thrive.
“We have to be more sensitive about personal and financial information in the body of the reviews. Privacy is more vital in this industry than most. There are also gray areas on what is allowed and not allowed by the SEC, so review monitoring is necessary to manage your accountability,” said Clarke.
Rize Reviews is an online reputation management company you can trust for your financial advisor reputation management needs. We offer 100 percent done-for-you online review management services designed to reap the benefits of SEO for financial advisors and grow your client base. Our online review management software makes it easy to get online reviews for your business.
Our full-service reputation management agency strategizes around your financial advisor marketing plan and leverages your financial advisor online reviews to help you sell more.
Contact Rize Reviews for a free online reputation audit and to find out more about how to acquire and leverage Google reviews for marketing.