An advisor gets a glowing online review. That happy client’s praise would make a great addition to her firm’s website. Can she post it?
The SEC’s Division of Investment Management says yes in a guidance note. But there’s a catch.
“Investment advisor or IAR [investment advisor representative] sites may publish the testimonials from an independent social media site in a content-neutral manner, such as by chronological or alphabetical order, which presents positive and negative commentary with equal prominence,” the note says.
So it’s warts and all, and the advisor can’t have a connection to the social media site that would call into question the site’s independence.
That doesn’t mean the advisory firm can’t advertise on sites that host reviews. But it has to be “readily apparent to a reader that the investment adviser or IAR’s advertisement is separate from the public commentary featured on the independent social media site; and the receipt or non-receipt of advertising revenue did not in any way influence which public commentary is included or excluded from the independent social media site.”
Needless to say, advisors will run afoul of the rules if they get their assistants to post fake reviews. They also can’t induce clients to write favourable reviews with promises of fee discounts.