In an effort to keep up with the ever-evolving social-media world, the SEC recently released a social-media guidance update. And one of the biggest changes relates to the use of third-party review sites and testimonials.

Third-party reviews. The SEC states that client reviews do not violate its ban on client testimonials, as long as they appear on independent social-media or review sites. Those sites, however, must let viewers see all public comments—whether good or bad. Advisors can have no sway or control over the comments.

Allowed: Testimonials on Yelp, Google or any objective “review site.”

Not allowed: Testimonials written on your Facebook fan page (because you control this page) or LinkedIn recommendations.

Advisors can (and should) use social media to point prospective clients to those reviews on objective third-party sites. For example: “Check out what people are saying on Yelp!” They must, however, direct them to a page displaying all reviews and not just a single one.

And there were a few other clarifications:

Testimonials on outside subjects. Direct testimonials are okay if they are not related to your financial expertise but to your community involvement.

Now you can list your involvement in Habitat for Humanity, your passion for skiing and your knowledge of antique automobiles as LinkedIn “skills” for your connections to endorse. This opens the door to connecting with clients and prospects on new and deeper levels.

Directing traffic to social sites. Advisors are allowed to acknowledge social-media channels in various media.

Allowed: Inviting listeners of your radio spot or interview to “check us out on Facebook.

Not allowed: Including “follow us on Twitter for up-to-date information” in a direct-mail piece.

Do not print a specific testimonial in an advertisement or read one particular review during an interview.

Additionally, the SEC has stated that “friending” someone on Facebook or “connecting” with someone on LinkedIn does not constitute a testimonial or endorsement.

In crafting your social-media marketing campaign, it’s important to keep these rules in mind so as not to  run afoul of the SEC.

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