Frequently Asked Questions
What is SEO and why does it matter?
SEO is Search Engine Optimization. In other words, it’s how your site becomes more findable, relevant, and popular in an online search. While Google isn’t the only search engine, it currently processes more than 90% of online searches globally. On average, Google processes around 3.5 billion search queries per day. As part of its SEO algorithm, it places a heavy emphasis on Google Reviews. The more reviews, the higher your SEO ranking, and the more likely a prospect is to find your site.
I thought the SEC prohibited the use of testimonials and endorsements?
In 2020, the SEC announced a new, modernized “Marketing Rule” to update and replace the prior advertising and cash solicitation rules. The change acknowledges that consumer expectations for information have increased and is designed to “allow advisers to provide investors with useful information as they choose among investment advisers and advisory services, subject to conditions that are reasonably designed to prevent fraud.”
The Marketing Rule addresses the use of testimonials, endorsements, and third-party reviews. It lays out clear requirements and limitations as to how these forms of client feedback are collected, used, shared, or promoted. However, the SEC has also released guidance on how it may weigh various factors when evaluating a firm’s compliance with the Marketing Rule. Advisers should have a system in place to ensure they comply with the Marketing Rule’s requirements, as well as be aware of their firm’s specific policies, before engaging with testimonials, endorsements, and third-party reviews.
What is the difference between a testimonial and endorsement?
In short, a testimonial is a statement about an adviser from a current client or investor; an endorsement is a statement about the adviser from a non-client or non-investor. The SEC Marketing Rule provides the following definitions:
Endorsement. Statement by person other than current client or investor that:
- Indicates approval, support, or recommendation of the investment adviser or its supervised persons
- Directly or indirectly solicits any current or prospective client or investor to be a client of, or an investor in a private fund advised by, the investment adviser
- Refers any current or prospective client or investor to be a client of, or an investor in a private fund advised by, the investment adviser
Testimonial. Any statement by a current client or investor in a private fund advised by the investment adviser:
- About the client or investor’s experience with the investment adviser or its supervised persons
- That directly or indirectly solicits any current or prospective client or investor to be a client of, or an investor in a private fund advised by, the investment adviser
- That refers any current or prospective client or investor to be a client of, or an investor in a private fund advised by, the investment adviser
Can Testimonial IQ help me capture feedback from my clients?
Absolutely! The Testimonial IQ platform enables advisers and firms to build compliance-forward systems and processes to request, generate, and share testimonials from clients. Our platform can be customized to suit your marketing goals and your firm’s compliance requirements. By using Testimonial IQ, you can create a historical, auditable, and searchable library of testimonials to use in accordance with your firm’s policies.
What about any negative reviews I receive? Do I have to use those?
A comprehensive sampling of clients is likely to generate a few less-than-stellar reviews at some point, but that’s okay. Studies find that consumers trust brands that have a mix of positive and negative feedback more than those with a flawless five-star rating.
In terms of the Marketing Rule requirements, the SEC does not require that you show every testimonial you receive, but it does warn against using testimonials to create misconceptions and instead recommends a representative sample.
We encourage our clients to work with their compliance departments to ensure they have standardized processes in place to avoid using testimonials in a misleading manner.
Can I display reviews from sites like Google, Facebook, or Trustpilot on my website?
The Marketing Rule does not prohibit advisers from displaying content from third-party sources. However, any third-party content displayed or actively promoted by an adviser is likely to be deemed “adopted” as an advertisement, and thus subject to the requirements of the Marketing Rule.
Advisers should work with their compliance departments to establish a process for how they engage with content on third-party sites.
I’m registered with my state regulatory agency, not the SEC, can I still use Testimonial IQ?
Many states defer to, or directly reference, the SEC guidelines in their own regulations. We encourage all advisers to work with their compliance departments to determine if they are permitted by their regulatory authorities to leverage testimonials or endorsements.
I’m regulated by FINRA, can I still use Testimonial IQ?
Testimonial IQ was designed to support advisers registered with both FINRA and the SEC. Testimonial IQ includes workflows to require pre-approval for all content shared with prospective clients and maintains an audit trail of the review/approval process, which is in line with requirements from both FINRA and the SEC. We encourage all advisers to work with their compliance departments to determine if they are permitted by their regulatory authorities to leverage testimonials or endorsements.
Does Testimonial IQ provide compliance oversight or legal advice regarding the use of testimonials?
No, Testimonial IQ does not provide compliance or legal advice, nor are we endorsed by FINRA, the SEC or any other regulatory body. We do not review, approve, or otherwise make recommendations regarding testimonials you may receive through our platform. Instead, we offer a customizable platform to enable your team to develop a standardized process for leveraging testimonials or endorsements. Usage of our platform does not guarantee compliance with relevant regulations or regulators.
Is my data secure with Testimonial IQ?
We take data security and storage seriously. We use state-of-the-art practices to encrypt all data in transit and at rest. We partner with Amazon AWS for industry-leading cloud data center reliability and conduct ongoing penetration testing to keep your information secure. You can download full copies of all of your stored data at any time.
Important note: This content does not constitute legal advice and is provided for general information purposes only. The information shared here has not been approved, reviewed, or otherwise endorsed by FINRA, the SEC, or any other regulatory body. We cannot guarantee the completeness or accuracy of this information.