Client Testimonials on RIA Websites: What the SEC Now Allows (and What It Doesn't)
This article is for informational purposes only and does not constitute legal or compliance advice. Regulatory requirements vary based on your registration status and specific circumstances. Consult a qualified compliance attorney or your compliance officer before implementing testimonials on your website.
For most of the SEC's history, client testimonials were categorically prohibited for registered investment advisers. The old advertising rule, unchanged since 1961, treated testimonials as inherently misleading because they couldn't represent a typical client experience.
That changed on November 4, 2022, when the SEC's new Marketing Rule (Rule 206(4)-1) became effective. For the first time, SEC-registered RIAs can display client testimonials and endorsements on their websites, subject to specific requirements.
This is a meaningful change. Third-party validation is one of the strongest trust signals in financial services marketing. For advisors who understand and implement the rule correctly, it's a significant competitive advantage. For advisors who implement it incorrectly, it creates regulatory exposure.
Here's what the rule actually requires.
The difference between testimonials and endorsements
The Marketing Rule distinguishes between testimonials and endorsements. The distinction matters because the disclosure requirements overlap but are not identical.
A testimonial is a statement by a current client of the adviser about the adviser or the adviser's services. The client is talking about their direct experience as a client.
An endorsement is a statement by a person who is not a current client: a colleague, a professional connection, a third party who knows the adviser's work. The endorser is recommending the adviser to others.
The Marketing Rule permits both, with different but related disclosure requirements. The client quotes advisors want to display on their websites, about their experience working with the firm, are testimonials.
What must be disclosed alongside a testimonial
When you display a testimonial from a current client, the Marketing Rule requires three disclosures. These must be clear and prominent, and they must appear in the same medium as the testimonial.
Disclosure 1: That the testimonial is from a current client.
The disclosure must make clear that the person providing the testimonial is a current client of the adviser, not a former client or a third party.
Example language: "Statement from a current client of Smith Financial Planning."
Disclosure 2: Whether the client was compensated.
The disclosure must state whether the client received any direct or indirect compensation in exchange for the testimonial.
If compensation was paid: "The client providing this statement was compensated for their testimonial." Or: "This client received [describe compensation] in exchange for this testimonial."
If no compensation was paid: "The client providing this statement was not compensated for this testimonial."
Disclosure 3: That the client's experience may not be representative.
The disclosure must include a brief statement that the testimonial may not be representative of the experience of other clients, and is not a guarantee of future performance or investment success.
Example language: "This client's experience may not be representative of other clients and is not a guarantee of future results. Investing involves risk."
The proximity requirement
These disclosures must appear in close proximity to the testimonial itself. A general disclaimer page that covers all testimonials with one disclosure block satisfies this requirement if it's clearly associated with each testimonial and easy to find.
But a footer disclaimer two pages away from the testimonial, or a disclosures page reachable only through a link, does not satisfy the proximity requirement if a reasonable viewer wouldn't associate it with the testimonial.
Best practice: include the required disclosures directly below or adjacent to each testimonial on the page where it appears. It doesn't need to be in large font or visually dominant. It needs to be present and legible.
Testimonials vs. client stories: the difference
A testimonial is a direct quote from a client about their experience.
A case study or client story is a narrative about a client situation, typically describing the financial challenge the client faced and how the adviser helped address it.
Case studies and client stories have existed in financial services marketing for years, and they're subject to their own set of rules under the Marketing Rule. The key distinctions:
- Case studies may be hypothetical or based on real client situations. If hypothetical, they must be clearly disclosed as such.
- Case studies based on real client situations must not cherry-pick favorable outcomes.
- If a case study names or identifies the client (even indirectly), consent is required.
- Real client situations used in case studies are subject to the same overall "fair and balanced" requirement as other marketing materials.
Many advisors use anonymized case studies effectively: "A physician client in their late 40s with a practice partnership buyout approaching and no financial plan. Here's how we structured the transition." This type of content is valuable for demonstrating expertise and is less restrictive than direct testimonials because it doesn't include a client's personal statement.
Testimonials from former clients
The Marketing Rule requires that testimonials be from current clients, not former clients.
Former clients can provide endorsements (the non-client category), which are also permitted under the Marketing Rule with the same disclosure requirements as testimonials, plus disclosure of any material conflicts of interest.
If a former client wants to provide a statement in support of your practice, it should be treated as an endorsement rather than a testimonial, and the disclosures should reflect that.
Soliciting testimonials compliantly
The Marketing Rule does not prohibit soliciting testimonials. You can ask clients to provide them.
Best practices for soliciting testimonials:
Choose the right moment. Ask after a positive milestone: after a financial plan is delivered and well-received, after a successful outcome (a business sale, a retirement, a large financial decision handled well), after a client expresses satisfaction.
Make it easy. Provide a direct link to a platform where they can provide a review (your Google Business Profile, your website's testimonial submission form). Don't ask them to write something from scratch.
Ask for honesty. Your request should ask for the client's genuine experience, not a scripted positive review.
Keep records. Document when and how you solicited each testimonial. The Marketing Rule requires advisers to document their compliance with the rule, and a record of your testimonial solicitation process is part of that.
Don't offer inducements casually. If you want to offer any incentive for a testimonial, this must be disclosed and the compensation structure must comply with applicable rules. Asking for testimonials without compensation is the cleaner path: it avoids the compensation-disclosure question entirely.
What testimonials should not say
The Marketing Rule prohibits testimonials that are misleading. Testimonials that violate this include:
Statements implying guaranteed returns or guaranteed performance. "Working with Smith Financial has guaranteed my retirement security" would be misleading because no financial adviser can guarantee retirement security.
Statements about specific investment performance without full context. "John helped my portfolio grow 25% last year" is problematic because it represents cherry-picked performance and doesn't include the required performance advertising disclosures.
Statements from clients who have been selected specifically because their experience is atypically positive. You don't have to display every client's review. But you cannot display only the testimonials from your most successful clients while suppressing less positive experiences, as this would create a misleading overall impression.
Statements that are factually inaccurate. If a client's testimonial contains a factual error (a wrong date, an incorrect description of a service), you cannot display it as-is.
The practical guideline: testimonials about the experience of working with you, the communication, the planning process, the feeling of confidence, and the professionalism of the firm are generally within bounds. Testimonials that make specific claims about financial results are riskier.
Google reviews vs. website testimonials
Many advisors receive Google reviews from clients. These are technically testimonials (client statements) and technically fall under the Marketing Rule if you make them part of your marketing.
The SEC has provided guidance indicating that reviews on platforms you don't control (like Google) may not require you to add the disclosures to those reviews, because you can't modify the content of a Google review.
However, if you embed Google reviews on your website, or direct prospects to your Google review page as part of your marketing, you are incorporating those reviews into your marketing materials. At that point, the marketing rule's testimonial requirements apply.
This means you should not selectively display only your most positive Google reviews on your website without the required disclosures. And you should not actively solicit Google reviews in a way that violates the Marketing Rule's prohibition on misleading testimonials.
FINRA rules for broker-dealers: different framework
BD-affiliated advisors are subject to FINRA Rule 2210, not the SEC Marketing Rule. The rules are similar in some ways and different in others.
Under FINRA Rule 2210, member communications (including websites) must be fair, balanced, and not misleading. Testimonials are permitted but must meet these standards.
FINRA requires that testimonials be genuine, from actual customers, and not misleading. The disclosures required under FINRA's framework are somewhat different from the SEC's Marketing Rule disclosures.
BD-affiliated advisors should work with their firm's compliance department on testimonial implementation. Broker-dealer compliance departments set specific procedures and required language for testimonials in customer communications.
How to implement testimonials on your site
The practical implementation for most advisors:
Step 1: Consult your compliance officer or a compliance attorney before adding any testimonials. Confirm your registration status and which rules apply.
Step 2: Draft your disclosure language. Have it reviewed by compliance. Agree on the format and placement.
Step 3: Identify 2-4 clients who may be willing to provide testimonials. Choose clients who can speak to the experience of working with you, not to specific financial outcomes.
Step 4: Request testimonials at a natural positive moment. Provide any necessary guidance on what would be helpful and what the testimonial will be used for.
Step 5: Review each testimonial for compliance issues before displaying it. Remove or revise anything that implies guaranteed outcomes or cherry-picked performance.
Step 6: Display testimonials with the required disclosures, clearly and in close proximity to each testimonial.
Step 7: Document the process.
Done correctly, client testimonials are one of the most effective trust signals available on an advisory website. The compliance framework is specific but manageable. The competitive advantage over advisors who haven't yet implemented compliant testimonials is real.
This article is for informational purposes only and does not constitute legal or compliance advice. Consult a qualified compliance attorney or your compliance officer before implementing testimonials on your website.
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