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The Do's and Don'ts of Using Client Testimonials

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Financial advisors gave an immediate thumbs-up to the Securities and Exchange Commission’s announcement last December that it was finally giving the go-ahead for client testimonials

The good news is part of the SEC’s revamped advertising and marketing rule that went into effect this past May. The compliance date is Nov. 4, 2022.

Meantime, some eager advisors have already begun to try testimonials. 

Larry Sprung, founder of Mitlin Financial, who started taking them in August, tells ThinkAdvisor in an interview that they “add one more touch point for that potential client to feel comfortable to give us a call.”

Sprung, a certified financial planner, relies mostly on referrals but uses social media as a way to “advertise,” says the FA, whose firm manages about $85 million in client assets and is the only Carson Partner firm based in New York, according to Carson Wealth.

In the interview, the 25-year advisor, whose practice is in Hauppauge, Long Island, provides five do’s and five don’ts for obtaining and using client testimonials.

For example, in the don’ts category, “You can’t ask a client to give you a five-star review on Google,” he says. “That’s entanglement.”

Before forming his own firm in 2004, Sprung was an advisor with Bank of America and Salomon Smith Barney.

The do’s and don’ts he discusses in the interview come from guidance he has received from Carson. It consists of specific guidelines on “how to do this effectively and what not to do to stay out of trouble,” he says.

ThinkAdvisor recently interviewed the Mitlin Financial founder, who was speaking by phone from Hauppauge. Eventually, the question arose: “Who is, or was, Mitlin?”

Answer: The name combines those of Sprung’s wife’s grandfather, Mitchell, and Sprung’s mother, Linda. In memorializing them, the families recall that the two had a strong trait in common: They were great listeners.

This is indeed appropriate for a company giving financial advice. 

Here are highlights of our interview:

THINKADVISOR: You’ve started to use client testimonials as part of your marketing. What’s the difference between a testimonial and an endorsement?

LARRY SPRUNG: The SEC rule states that a testimonial comes from a client, and an endorsement is from someone promoting your services, such as a CPA who refers or recommends your services and gives a testimonial. 

In my view, they’re kind of the same.

Where can clients post testimonials about financial advisors?

They can be left on Google or LinkedIn as well as on Facebook, Twitter, Instagram [and other platforms]. Clients can do “reviews” on Google and “recommendations” on LinkedIn. A “like” is considered a testimonial, too.

What platforms are you using?

Google and LinkedIn predominantly. Those are the two important places. Business people can see them on LinkedIn; Google is more for the general public. 

As for other platforms, we don’t want to do this everywhere.

But we also get reviews of our podcast, “Mitlin Money Mindset.” Somebody rated it one star. That was unfriendly, but if that’s the way they feel, that’s fine.

You’re a Carson Partner. Did Carson suggest or ask that you get client testimonials?

I don’t think Carson ever took a stand that we should or shouldn’t be doing this, or that they want us to do it. 

As a firm, we proactively felt it would add value to the practice and help us build solid relationships.

Carson makes you aware of tools that are available, and it’s up to you as a business owner to implement them or not.

Once the rule [went into effect in May], they asked us to hold off, and then they gave us guidance. We started taking reviews in August.

Does Carson’s guidance give do’s and don’ts about using testimonials?

The SEC [advertising and] marketing rule is, like, 400 pages long. Our compliance team went through it.

We’re getting what we can and can’t do off the specific guidelines that Carson has provided on how to do this effectively and what not to do to stay out of trouble, in addition to getting [input from] our compliance team.

How do you encourage clients to give you a testimonial?

We request them.

More on this topic

The rule was implemented in May. Why did you jump into doing this very early — in August?

[Broadly], people are looking at reviews and seeing if [clients and customers] are happy with the services from [specific providers]. 

People very frequently use Google reviews to support their decision on whether or not to contact a certain service provider.

This is important today, and it’s only going to become more and more relevant as time goes on. If people have a good experience, they’re accustomed to leaving a Google review. It’s becoming more commonplace.

Most prospects probably have already conducted research about your firm before they contact you. Why do they need to read a testimonial too?

If we can have one more area where they can see us in a very positive light [through current clients], it adds one more touch point for that potential client to feel comfortable to give us a call.

What level of satisfaction have you derived from client testimonials thus far?

We just started to do this, so I don’t know that we’ve seen any direct results. But I imagine that in time, they’ll assist us in working with new [client] families. 

If someone is referred, [my] hope is that they read some of the reviews and are prompted to call us a little sooner — because they’ll see other people’s positive experiences in working with us.

Can you make additional use of the testimonials anywhere other than where they were posted?

We’re submitting some of the reviews to our compliance team and will then repurpose them by using them on our website. 

What’s an example of a review that you’ve received? 

Here’s [part of] one we got a few days ago: “I’ve been working with Larry Sprung for several years, and I couldn’t be happier. … He and his staff of professionals are responsive and are just great to work with. 

“When there are fluctuations in the market, Larry is quick to put out a calming email explaining what happened and to offer his time to discuss any concerns …” 

Let’s talk about some of the do’s and don’ts. First, what are you permitted to do?

We can ask clients to give us testimonials. We can show them where and how they can submit their review. But our involvement has to end at that point.

The testimonials should be service-focused, not performance-driven. You have to be careful if there’s inappropriate stuff in them, like foul language. But you can edit it.

Every time someone leaves a testimonial, we get a notification. We review them to make sure they’re in line and [to spot] profanity, offensive statements or untruthful content. Maybe some testimonial wasn’t even left by a client, or maybe there’s a factual error. We had one situation where a client wrote a review that wasn’t well-written or even coherent. So we asked them to edit it, or re-review us or take it down.  

If a poor review comes from a bona fide client, it would have to stay up there. But should there be a bad review and we can prove it’s not from a client, I think my compliance folks wouldn’t have an issue with it being removed.

If it wasn’t from a client, just someone giving you a bad review, like a competitor, we would be able to work to get it removed, making a clear case that it didn’t belong there. 

Now, what are some of the don’ts?

We can’t coach or guide the client or any individual on what they should or should not be writing in the review. And the length is up to them.

You can ask a client to give you a review, but you can’t ask them to, say, give you a five-star review on Google, because that’s entanglement.

[Instead], you can say to them, “Hey, you like our service. You enjoy what we’re doing for you. We would really appreciate it if you went to Google and gave us a review.”

We don’t want clients talking about returns or a specific return because it may be misleading, and it’s inappropriate. We want them to talk about our abilities and service.

You also don’t want to be selective in the review process, where you’re putting more favorable reviews at the top.

So you can’t rearrange them. You have to leave them in [the order] they came in.

If you get a bad review, as long as it’s a legitimate review from a person that you’ve done business with, the review has to stay and cannot be removed. [That is], you can’t discriminate.

What’s another big plus to getting client testimonials?

From time to time, clients have said: “Thank you so much. Is there a way that we can help you?” 

Now we can say, “If you’re so inclined, we’d love for you to leave us a review on Google.”