The Client Testimonial Onslaught and ‘Powerful’ Organic Growth Coming

Testimonials and endorsements — in the form of videos, written words, and star ratings — undeniably work. Social validation is powerful, be it from paid actors or willing customers. That’s why American Express pays celebrities to use its credit cards in television ads, and consumers seek out business reviews on Yelp.

Those same principles have always applied to wealth management, but testimonials were barred from ads until recently. In December, the Securities and Exchange Commission approved new rules governing how investment advisors can market themselves. The rules codified long-standing recommendations from the regulator and legalized practices previously banned.

“Stories sell, word-of-mouth sells, and we’ve been muting that to some degree with the archaic laws in place,” said Andrew Rosen, the president of Diversified, a wealth manager in Wilmington, Del.

The rules pertaining to advisors and cash solicitations were adopted in 1979. Other rules were last updated in 1961. 

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Kristin Harad, who was a financial planner before she started her own marketing and coaching business for advisors in 2014, agrees with many that the changes were overdue. "It is what’s been missing for a long time. To be able to actually put real legitimate clients on your site, whether on video or quoted, it is going to be a big difference in demystifying the benefits of the services that we offer," she said.

Now, the prospect of leveraging testimonials has advisors and marketing executives drawing up plans. They’re reviewing client rosters for the best stories and camera-ready clients, and brainstorming how they’ll use testimonials in video, blogs, social media, and print. Some are considering hiring local celebrities and influencers to endorse their firms.

But testimonials and endorsements require flexing creative muscles that are underdeveloped, or nonexistent, at most wealth managers.

Video, audio, and text-based testimonials from willing clients can personalize an advisor and burnish their credentials. They are also relatively easy to secure and inexpensive to produce. Paid endorsements, while more expensive, might garner attention and help RIAs stand out in a crowded marketplace.

Who, Where, and How

When it comes to testimonials, advisors agree that video storytelling packs the biggest punch. A good video is a gift that keeps on giving: It can live as a long-form testimonial on a firm’s website, and clips can be shared across Facebook, Instagram, LinkedIn, and in targeted email newsletters.  

“What gets me really excited is the opportunity to have video testimonials from clients that tell the story of how or why the advisors solved this specific issue or help them to be able to live their best life, like fulfill their dream of a happy, fulfilled retirement, or helped with intergenerational planning,” said Abby Salameh, chief marketing officer at Hightower Advisors. 

“I think it is going to be very powerful for organic growth.”

Hightower has more than 100 advisory practices in offices throughout the U.S. managing an aggregate of $79.6 billion. To help them leverage testimonials, Salameh’s team plans to distribute compliance and standards training then help advisors identify ideal clients willing to sing their praise. The RIA’s corporate office will also assist them in writing scripts as well as the production, editing, and distribution.

But smaller wealth managers without that central support shouldn't fret. 

RIAs can hire their own videographer to shoot, edit, and produce content starting at a few thousand dollars. With a little more investment, about $10,000 or more, a production company can handle scripting, staging, editing, and post-production, delivering a better quality product. Editors can also create audio and text versions to be used for podcasts, blogs, articles, and print materials. From there, videos can be used on firm websites, in social posts, and even targeted emails.

Is the additional expense worth it? That decision is largely up to the RIA. Even infrequent moviegoers can tell the difference between big-budget and simply budget films. But both have their charms and serve their purpose nonetheless.

RIAs may not even have to invest new dollars, but rather reallocate some of their current marketing budget. 

“It doesn’t require a significant expense. For example, you could take money away from live events, and reallocate the money and use it for testimonials,” suggested Patrick Brewer, CFA, CPA, and CEO of SurePath Wealth Management.

Who should you ask to give a testimonial? Brewer said RIAs should identify their target audience, whether a certain profession or a demographic segment, and then find some of your most successful clients to showcase.

Of course, the most effective testimonials will feature well-dressed, well-spoken clients who are comfortable in front of the camera. If someone stammers or is nervous, they may not convey the very confidence that advisors want prospects to hear.

If an advisor is looking to save money, or a client is camera shy, a text-based testimonial can be an easy and low-cost way to share a success story. Paired with a nice family photo, it can also humanize websites, social accounts, and email, but won’t be nearly as impactful as video, marketers said. 

Whatever the medium, Brewer discourages compensating for testimonials to ensure honesty. Instead, after a client gives his business a positive review, Brewer might send SurePath-branded swag, such as cupcakes. “I like to surprise them on the back end, rather than incentivize them on the front end,” he said.

Clients or Paid Endorsers?

While a happy client should be willing to share their story for free, paid endorsers and influencers will require cash. In some industries, companies can exchange goods and services for endorsements, but that doesn’t really apply to RIAs. Instead, advisories will have to pay for a well-known figure to plug their firm.

Depending on the celebrity (and your definition of celebrity) endorser fees could range from a few hundred dollars to more than $100,000 for an actor, social media star or professional athlete to star in an ad or post on social media. Larger RIAs might be able to afford to engage well-known stars, particularly if they’re already clients.

“Some of our advisors focus exclusively on sports, athletes, and celebrities,” said Salameh. “The fact that they could now use those celebrities to endorse them, that is pretty powerful.” 

Smaller RIAs can still employ star power. Brian Hart, president of Flackable, a PR firm for wealth managers, expressed the value of earning positive reviews from local celebrity or influencer clients, such as well-known former college athletes, community leaders, or social media personalities.  “Usually with clients who are community leaders and being able to leverage that on your website, there is branding value,” he said.

But not everyone is convinced that celebrity sells. “My gut is, if I’m a prospective client, I’m going to trust the person who has their money with them and has experienced their service,” said Amy Gordona, EVP and CMO for Kestra Financial, an RIA and financial support firm for independent advisors.

However, "If they can put some meat behind their referrals and demonstrate those positive experiences through a one-to-many mode of communication, like social media or their website, it is a game changer," said Gordona.

Testimonials Matter for SEO

Testimonials will also play a pivotal role in a website’s visibility online and could disorder the internet as advisors know it.

Google rewards websites that have a large volume of reviews and gives preference to those with positive ones, ranking them higher in search results. Third-party review sites, including Google, Facebook, and Yelp, also help with search engine optimization. Original content, including videos and blogs, help boost a website’s search position, too. And the higher an RIA appears in search results, the more users are likely to visit their website.

“When someone searches for a local advisor, they see your rating and reviews, and that gives them confidence,” said Hart. “Third-party credibility is insanely valuable.”

Gordona said advisors should feature videos prominently on their websites. “Almost everyone, the first step they take is to go on your website and find out who you are,” she said. “It is a complete miss if it wasn’t on the website.”

While You Wait, Do Diligence

After President Joe Biden took office in January, he ordered a regulatory freeze “to ensure that the President’s appointees or designees have the opportunity to review any new or pending rules.” Included in the regulatory changes now paused are the SEC’s rules governing investment advisors and advertisements. 

It could be at least another 60 days from the president’s Jan. 20 order until new rules are approved and added to the Office of the Federal Register — the signal that new rules are active. (Although, active rules, no matter how specific, are still open to interpretation.)

RIAs who aren’t already preparing to use testimonials need not wait until this spring. They should huddle with attorneys and compliance officers to digest the rules, determine dos and don’ts, and outline what they’ll need to disclose and document. “That all needs to be mapped out before you can execute on any of this,” Gordona said.

In the meantime, industry veterans say testimonials and endorsements should be considered part of a well-balanced marketing diet, rather than a silver bullet. “This will be another arrow in our quiver that will allow us to have another perspective in the marketing,” Rosen noted.

Taking a big-picture view, Jud Mackrill, former CMO for Carson Group, and now CEO of financial technology firm Milemarker, said the rule change should inspire RIA decision-makers to revisit their overall marketing plan, including brand identity, objectives, and current marketing channels. Whenever you add a new element like testimonials or endorsements, he said, it should be additive and on-brand. The key is to demonstrate the issues real people face and how your advisors can help solve them.

“As a marketer, you shouldn’t be far away from understanding what real people are doing,” Mackrill said. “The secret sauce of marketing is actually empathy.” 

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