In the wake of the SEC’s revamp
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
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.
As we mentioned, we’re awaiting more guidance from the SEC, so it’s possible you’ll need to go back and adjust or reevaluate existing testimonials as we learn more. Stay tuned.
