In the wake of the SEC’s revamp on rules around advertising
last year, you probably know that advisors can now solicit, produce and feature
client testimonials. You may also know that the new rules do not give you carte
blanche to use your clients as spokespeople.
With the November implementation date for the new rules on
the horizon, we’ve been getting a lot of questions from advisors who want to
take advantage of the change and begin featuring client testimonials, but who
are hesitant to take the first step. While the final SEC guidance won’t be
available until later this year, many firms are looking to get a head start.
Here’s a guide the team at Advyzon put together to help.
Step 1: Identify the right clients
Before you start thinking about sleek production value or
the various ways you might promote client reviews, take a step back and think
about what you want those testimonials to achieve. This can help you choose the
client whose specific story matches your business objectives.
Consider two examples:
Advisor A wants to attract more young clients. Since the
young clients she currently works with tend to focus on home buying and
holistic financial planning, she assumes other young prospects have similar
goals and interests. With this in mind, she might ask clients who recently
bought a home to do a testimonial about the role she played in making that
vision a reality.
Advisor B wants to move beyond investment management into
more holistic financial planning and start charging a separate flat fee for
that service. In looking for a testimonial that will showcase the value of his
planning services and help justify this new fee structure, the advisor focuses
on a client who recently moved beyond investment management into holistic
planning.
In both examples, the story the client tells is specific and
matches the advisor’s business objectives. Framing the selection process this
way allows you more time to focus on following the rules, as we now know them,
to make sure it’s done right.
Step 2: Go slow and steady
In soliciting testimonials, your first impulse might be to
send out a survey to all your clients asking them to review your services. Or
you might suggest clients head to Google or Yelp to post reviews. While those
options have potential upsides — after all, it’s common for consumers to read
reviews on third-party sites before making any purchase — they also carry risk.
For one thing, asking for reviews en masse — particularly on
third-party sites — increases the probability that there will be negative
reviews in the mix. And should they appear, you must leave them up.
You’ll have slightly more control if you approach clients
about offering a review on your website. This is also how you can ensure you’re
picking clients whose stories best align with your business and growth
objectives.
But picking one or two clients whose stories align with your
goals probably won’t be enough to sway potential clients. Often, the key to
using testimonials successfully is consistency. You want to keep adding
testimonials until you have at least a handful. After all, do you trust brands who
only feature one or two glowing reviews?
Selecting clients to feature on a regular basis can be
challenging, so plan to do it in a way that feels manageable. For instance, you
might check in every quarter to see which clients have a standout story, ask two
to do a review, and post them the following quarter. You’d then have eight
reviews within a year, and because you selected the clients strategically,
they’re more likely to include the kind of specificity prospects look for.
Step 3: Pay attention to detail
Attention to detail can take a testimonial from good to
great. Ignoring details can get you in trouble with the SEC.
The biggest SEC rules so far relate to procedure,
specifically how advisors compensate reviewers and how they must disclose
information. It can be tempting to pay clients for their reviews. The client
might request it, or you might feel it’s important to compensate clients for
their time, or perhaps you want a bit more control over what clients say.
Regardless, the SEC rules around disclosures are quite strict: If you pay
anyone to review your services, you’ll need to disclose that. You also must
disclose whether the reviewer is a current client and if there’s any potential
conflicts of interest.
When weighing whether to do this, think about it from a
consumer’s point of view. When you read reviews, how much weight do you give
the comments from reviewers you know were compensated for their thoughts? Or
who you know might have a conflicted relationship with the service provider?
We’re not saying you shouldn’t pay clients who provide reviews or testimonials,
just that it’s important for you to think about the big picture and consider
the tradeoffs involved. Think about how all of this fits into your broader
message.
It’s also important to consider production details. Reviews
work best when they are human and relatable, so a video of someone discussing
how you’ve helped them might resonate more with prospects than a quote offered
without context or even a photo. Consider you may get more for your money if
you allocate your marketing budget to a well-produced video versus compensating
the client.
Finally, keep track of details behind the scenes. Keep a log
of the content you’ve created. Include the client’s name, the services they
discuss, compensation details (if any), conflicts or potential conflicts of
interest, production date and publication date. This makes it easy to update
testimonials as needed — for instance, you’ll need to update the disclosures on
a client testimonial if they leave your firm and become a former client versus
current one. It can also help you adjust testimonials if rules change over
time.
Click here for the
original article.