What you need to know
Advisers preparing for the SEC’s upcoming marketing rule compliance date should start by laying the groundwork for leveraging social proof in their marketing, says FMG Suite’s Susan Theder. The first and most crucial thing in this process should be to make use of the Google My Business tool, he says. Advisors should also check with their compliance departments to ensure they are meeting established guidelines.
The Nov. 4 compliance date for the Securities and Exchange Commission’s new marketing rule is fast approaching, paving the way for advisors to use testimonials in their advertising and marketing.
Marketing and compliance experts offered their advice Tuesday on how to comply with the rule and how to get the most out of the new marketing channels available.
As the SEC warned on Monday, when it released a Risk alertadvisors can no longer choose to comply with the previous advertising and cash solicitation rules as of November 4th.
To begin with, an advisory firm “must ensure that it has familiarized itself with the changes contained in the rule and has enacted policies and procedures reasonably designed to detect and prevent violations of the marketing rule,” according to Jason Vinsonhaler , RIA in a Box. compliance manager
“The SEC has published examination priorities for the rule, which include policies and procedures and books and records,” he said, adding that the regulator will also “review substantiating information for statements made in advertising.” .
He added that “performance advertising also remains an area of focus.”
Social proof
“Advisors preparing for the upcoming SEC Marketing Rule compliance date should start by laying the groundwork for leveraging social proof (reviews and testimonials) in their marketing,” according to Susan Theder, Chief Marketing Officer and expertise from FMG Suite marketing advisory firm.
“The first and most important element of this process should be to claim and set up your Google My Business account,” he told ThinkAdvisor on Tuesday. “This will give advisors a place to collect, respond to, and reuse reviews. When advisors receive a review, Google will send them an email alerting them, and it’s important that they respond quickly to each review.”
That’s because “engagement with reviews, like social media, is critical and will also improve your SEO results,” he noted.
Second, he said, “they need to think about and outline all the channels and marketing assets in which they can leverage their positive reviews.”
An advisor’s website is an “obvious channel, but other marketing assets such as slides, case studies and blogs also provide a means to promote that social proof,” he explained.
Third, advisors should also “think about the ways in which they want to solicit/collect reviews in a compliant manner,” he noted. “One method worth considering is to simply incorporate messages and a link into your email signatures and appropriate customer communications.”
Finally, he said, video testimonials can be especially effective. “Advisors looking to leverage video should identify clients who are willing to engage and make sure they reflect their ideal client persona,” he said.
“And, of course, before doing all of this, advisors should check with their compliance departments to understand their company’s policies and procedures and make sure they’re meeting the guidelines that have been put in place,” he said. add.
Justin Boatman, chief product officer at Riskalyze, agreed on the importance of advisors consulting with their company’s compliance departments.
“One of the overarching themes of the marketing rule is the level of importance the SEC is placing on client engagement as a prerequisite to presenting investment material to clients,” he told ThinkAdvisor.
He added: “Advisers should, of course, consult their own compliance resources about the rule, but those who involve client input in their proposal processes and document their approach can rest easy knowing that their clients they are doing well.”
Some advisors are behind
“Right Now, [advisors] should work to review all marketing and advertising pieces that will be used on Nov. 4 to comply with the new rule,” according to Amy Lynch, founder and president of FrontLine Compliance, who previously served as a regulator for the SEC.
“Written policies should be scrapped now or nearly done, and companies should ensure that the type of marketing materials used are covered in the policies,” he said on Tuesday. “For example, if a company uses hypothetical performance, the policy should contain a section on the use of hypothetical performance and how it will be permitted, monitored, etc.”
Advisory firms also “need to ensure that they have all necessary support and backup for any performance data or other factual data displayed in marketing or advertising,” he said. Each company’s ADV Part 2A prospectus “may need an update before November 4 if the company uses promoters, so that should also be reviewed,” he added.
However, “many councilors are behind the eight ball of this rule”, he warned. “This is because there is more to it than just updating the company’s marketing policy. Several areas need to be addressed and changes may need to be made to the actual marketing materials and application practices. This can be a lot of work and if companies haven’t started yet, they’re already behind.”
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