Diana Cabrices (0:00): and do this. So first to start, why are we all here? Who are we here with? We're talking about the SEC marketing role. You've probably heard this term a million times. You probably mostly understand the role, but there's still some confusion around it. Maybe you've gotten started with the expanded, you know, testimonial marketing and advertisements and what they've really expanded that with this new marketing role. And you're here because you want to make sure you're not doing anything wrong. Whatever the cause may be, we all have probably read that recently, especially if you signed up for this webinar, we talked about it a lot. There has been some crackdowns, right? There was over nine investment advisory firms that were charged by the SEC because of their failure to include disclosures or proper disclosures or, you know, other reasons around testimonial marketing and who they're saying supports them and who advocates for them. In some cases, what awards they may have won. So it gets a little bit hairy, but the fines are very real. Over $1.24 million were fined in total across these nine firms. And folks, these aren't just the big firms that we usually see in the media that are getting fined because of text messaging or something along those lines. These are both big and small firms. So I think it's becoming more real than ever. So I'll quickly introduce myself and then I'm going to let my panelists introduce themselves. They are the experts here around the topic. My name is Diana Cabrices. I'm chief evangelist at Wealthtender. We are the first SEC approved testimonial marketing platform. We're built for financial advisors. So I'm very passionate about the topic. I think in order to succeed with your marketing prospecting, your clients build loyal relationships. Testimonials are really key in that. They're storytelling at its finest, but we have to do it right. We have to do it compliantly. That's where we built technology into the picture. Love working with advisors. I've been doing this my whole career. I go out often and speak on stage, teach you how to market and grow, but everything's about scalability and everything is also about compliance. So we've invited some compliance experts on the line with us today. We have Leila Shaver, who's the founder of My RIA Lawyer and Brian Thorp, who's the CEO of Wealthtender. So Leila, I'd love if you could just jump in for a minute or so and introduce yourself. I'm sure most of the people know who you are, but we'd love to hear from you.

Leila Shaver (2:23): I appreciate that. Thank you so much. I'm excited to be here with you guys today. My name is Leila Shaver. As Diana mentioned, I'm the owner and founder of My RIA Lawyer. We are a law firm that provides legal and compliance services to RIA's fees and fund managers. Our focus as a firm is really helping investment advisors understand all this regulation that's coming out, and it feels like it's coming out faster than ever here in the last few years. But we really focus on helping them navigate what those rules are and how they apply to their businesses. So whether that's coming in and doing the testing and implementing the processes or providing that legal defense and support when they find themselves on the other end of the SEC in an enforcement investigation, we're here to kind of help firms walk through this process and figure out how to defend themselves and really ultimately implement processes to make sure that they're complying with state and federal regulations. So I know marketing is a big area of concern, but it's a great area to be focused on. So I hope at the end of today's webinar, everyone walks away feeling empowered to go do some marketing with the understanding of kind of where those boundary lines are. I love that.

Diana Cabrices (3:43): The word empowered, that will be our keyword today. So Brian, if you could take a moment, introduce yourself as well.

Brian Thorp (3:50): Sure. Well, thank you. And Leila, thanks so much for being here. For those that don't know, Leila is our securities attorney, has worked with Wealthtender since we first launched in 2019. And prior to launching Wealthtender, I worked for Invesco for 22 years and had a great career, wonderful people, but I've always had the entrepreneurial bug and believed that when there is regulatory change, it creates opportunities. And again, I think that's what we're really going to spend a lot of time talking about today. Even though there's a little bit of fear and concern, the fact of the matter is more than anything, this is really such a tremendous opportunity. So excited to share more about what we're doing to help advisors and wealth management firms at Wealthtender grow and really succeed with testimonials and ways to work within the framework of the SEC marketing rule. And I love Leila's background. As a compliance nerd, I consider myself a compliance nerd as well, and also a marketing nerd. So really trying to wear both of those hats. And importantly, the way we designed Wealthtender is really compliance first, ensuring that everything we've designed is incorporating everything about that 400-page marketing rule, along with other regulations, and then putting the marketing engine on top of that. So Diana, I'll turn it back to you.

Diana Cabrices (4:57): Absolutely. Okay. The first thing that I want to do, and again, thank you both for being here. You're the best people that could possibly be here right now to talk about this topic, is I want to hear from the audience. So I'm going to launch a quick poll, and I will absolutely share your results with everyone as well. I think it's important to understand what are your peers feeling right now? Where are you at mentally with this? So the question is, what's your biggest near-term concern regarding SEC marketing rule compliance? So feel free to answer the poll that's just popped up on the screen. Don't be shy. And you should be able to see it. Brian, Leila, can you see it as well? Perfect. All right. Looks like we're getting some responses. So maybe it's avoiding fines. That's your number one fear right now. It's like, I don't want to get fined. Or maybe it's, hey, I really need to make sure my website meets these compliance standards. Just staying compliant as you grow. If you're in growth mode right now, we all know that that can get a little complicated as you add advisors, and you add strategies, and you need to kind of tame the beast a little bit with compliance. And then lastly, understanding and applying new SEC regulations effectively. As Leila mentioned, it's all happening quite quickly. So it looks like some of you are still answering, so I'll give it about 5 to 10 more seconds. I'll end the poll, and then I'll share with you where you're all out. And I'm not surprised what I'm seeing right now. Also, I think I meant to include in all of the above. So maybe you're feeling all of these things right now, and that's okay too. All right. I'm going to end the poll and share it back. So we're kind of almost split here between just staying compliant while you grow your firm, and also understanding and applying these new regulations effectively. And the SEC marketing role from 2020 to 2021, as it sort of came out and evolved, I mean, that still feels like yesterday. So this is all still very new, and things are also changing quickly. Leila, Brian, any thoughts on this?

Leila Shaver (7:02): You know, I think that something the audience should keep in mind is anytime there's new regulation, there is going to be some level of confusion, right? It's regulation. So it has to be written broadly enough to cover a range of scenarios, but it's never going to be so specific that you know exactly what to do in every situation. So with new regulation, that's where we see examinations. There's guidance that comes from those examinations. After that kind of compliance period where regulators are giving you time to kind of figure out the rule and implement processes, there will be investigations into violations, and we get additional guidance from reading those orders that come from those settlements. So, you know, it's not unusual what's happening with the marketing rule and everything that's happening afterwards. This is consistent with new regulation. So I would encourage everyone, you know, go and read these different press releases. Read what, you know, why these different firms were fined. That's really going to help you inform, you know, what you have to do to stay compliant. And then just as different scenarios and fact patterns come up, that's where you can evolve your policies and procedures moving forward.

Brian Thorp (8:18): Yeah, and I'm certainly not surprised to see the responses. I think when we look at a rule like this with a principles-based approach, there's always going to be that continuing education in terms of, okay, now what are we seeing with the actual enforcement actions, as Leila mentioned, and being able to incorporate those insights into the actual policies and procedures and implementation strategies amongst firms as well.

Diana Cabrices (8:40): Great takeaway. Just I love what you both had to say. And to summarize that, go read what's happening. Learn from it. That's how we're going to continue to evolve in this. And if you're too lazy to read, go to use chat GPT and ask it, what is the summary of what recently happened with this SEC crackdown? It will tell you. Okay, so this is super helpful. We're going to move into some of the questions that I've developed today based on feedback from the audience. Some of you sent questions in beforehand, and then we will have an open Q&A. So if you're on this webinar and questions start coming up about your unique situation, feel free to write them down. Go ahead and put them in the chat or the Q&A box. We have both open for you today, and we'll make sure that we cover those at the end of the call. Okay, so I'm going to move along here to the next slide. By the way, in case you can't stay to the end, although we highly encourage it, we have a free downloadable playbook for you to help you with testimonial marketing. But in case you cannot stay, this is being recorded. So we will share the recording after the webinar ends. All right, let's talk about some compliance red flags. So Leila, I think I'd like to start with you. And we've already talked about this, but like the recent SEC fines highlighted several compliance violations. So what are some of the most common red flags that firms should watch out for, especially around making unsubstantiated claims or missing disclosures?

Brian Thorp (10:04): Sure.

Leila Shaver (10:05): So great question. I think, you know, when it comes to marketing, you know, one of the core foundations of any good marketing program is having a good website, right? Having a good social media presence. What you have to be really careful about is what you're saying on those different platforms, right? So, you know, especially in light of the recent enforcement actions in those settlement orders that came out, you know, what we were looking at was language, whether in social media or on websites around, you know, claims that can't be substantiated. So whether it's we're the best financial advisor or we're the only financial advisor that does X, Y, and Z. Whether it's something like, you know, there's no other firm that does it like ours. How do you substantiate those kinds of claims, right? They're broad, they're kind of vague. Unless you're able to say, here's our award for being best in state. So now we can say we're the number one financial advisor in the state. You've got to be able to kind of prove some of these statements. Some other kind of concerns that came up, and I've seen this myself with different clients we've worked with, some firms will go on their website and say they're a conflict-free firm, right? They have no conflicts of interest. But here's the thing, if you're being paid for the service, you inherently have a conflict of interest, right? Because you're receiving compensation. So you can never say, we don't have any conflicts of interest. So, you know, I think it's language like that, where if you're going to make a claim, we are the best, we are the only, we do this, we do that, we make this claim, you have to substantiate it. If you say you're part of an organization, you have to show that you're part of that organization. I think one of the orders, there was a claim to be a part of an organization that doesn't even exist, right? So you have to be able to kind of prove some of these statements. So if you can't, then don't say it, right? And I know we're all trying to, as businesses, you're trying to stand out from your competition. That is not the way to do it, at least from a regulatory perspective, because you have to be able to kind of provide, you have to be able to provide proof behind what you say. So I would say that's a big thing. And then there's always missing disclosures. So, you know, when we're talking about, you know, testimonials and endorsements, especially, there are places where you have control, like if you've claimed your Google My Business page, you've claimed your Yelp page, you have a firm Facebook page or LinkedIn page, these are all places that you have control. So you have to make sure that any content that's posted there, and anyone who shares any information on those pages, that they come with the appropriate disclosures.

Diana Cabrices (12:53): Yeah, and that's actually that was going to be part of my next question is when we think about these third party ratings, what what are these appropriate disclosures? Like what does this look like? And how can firms avoid presenting these testimonials that they're getting in an incorrect way?

Leila Shaver (13:11): Sure. So let's talk about third party ratings. So I look at this as like awards. You know, we were we were number one in this, we were the 25th largest this. So in those cases, you have to say what year you were awarded that, right? When did you get this rating? So you have to put the year you have to provide information around the methodology behind being selected. Is it some sort of algorithm? Do they just go into IAP and pull a list and put it in alphabetical order and say, okay, A, you're one, you know, number one, B, you're number two. So you have to provide the methodology, you also have to disclose whether or not you've compensated this organization to be part of their list, and to be rated. Right, that's considered a conflict of interest, if you've had to compensate an organization to get rated, right. So you'd have to disclose if there was compensation involved. And then any other kind of potential conflicts of interest that someone should be aware of when looking at this rating. So those are the kinds of things you want to disclose with with any sort of like third party award or rating that you receive. In terms of testimonials, disclosures with that, so any reviews from a client, or non-client, there's three areas that you have to address. One, are they a client or not? Two, did they receive compensation for the review? And then three, any other material conflicts of interest. So this is a client, but it's also my mom. Right, you probably know that for the context of the review. Oh, this is our client, but they're also a vendor. They also, you know, they were a sponsor at our last conference, things like that, where there may have been some support or compensation exchange at some point or some other kind of issue that creates a conflict of interest, right? They have, they're in a position where they're kind of incentivized, or they feel like they should give you a positive review. So something like that, you know, those would be kind of considered material conflicts of interest to disclose.

Diana Cabrices (15:19): Yeah, yeah. And, you know, if you're an advisor, financial plan firm, you know, you might be thinking like, this is, this is too much. You know, I don't want to have to do all of these little things, because what we just went through was, you know, quite a few different things. And that's why a playbook is so helpful. But I think at the same time, we have to remember, this is also about transparency for consumers, and helping consumers, you know, even just the profession in general, like the trust factor there, like helping repair that, because I think for a long time, that's been a little bit broken. And you've probably seen data, like we've all talked about this, but, you know, financial professionals and car salesmen are like, right here to one another when it comes to trust, which really isn't fair. Yeah, there's, there's some bad apples out there. But it's usually the bad apples that create, you know, necessities like this one, because people have been burned. So a lot of this, remember, it's about transparency. And if you're winning awards, that's amazing, you should still be able to promote those things. But you should also be able to be as transparent as possible with consumers. So thank you, I love for going through that, and giving us some real examples. So if you're on this call, I hope you're taking notes. Because what she just gave away was really, really important. If you're thinking about promoting any awards you've gotten or any client testimonials. One thing I'll say just to wrap it up. And then Brian, I want to hear from you is we also say the client testimonial piece with the disclosure, an easy way to remember that is just like the triple C, like just like you said, client compensation, conflicts of interest. Okay, let's move along to you, Brian, I want to talk about some safe marketing practices. So many firms struggle with this, right? They struggle with how to write, how do we effectively promote testimonials, but also stay in line with compliance, not cross any compliance line. So what have you seen with advisors that are doing this successfully, but you know, they're marketing the firm, they're marketing these testimonials, but they're also staying in line with SEC expectations.

Brian Thorp (17:20): Sure. And then we'll incorporate as well, the privacy concerns of clients, because I do see a question that came in. And just to address that, as we dive into the safe strategies, the question being, if someone is a client and they provide a testimonial, is it not, or is it a violation of privacy policy to disclose their name? And, you know, from there, I think it's important to know that the SEC does not require that testimonials provide the full name of the client, or if your firm policy is that you prefer to not disclose the full name of the client, you certainly don't have to do that. A couple of things to consider. There are, you know, public review platforms, and it's a whole nother ball of wax that we can talk about a little bit later, like Google reviews, where essentially, if somebody writes a review, their full name will be disclosed. So that's where alternatives such as Wealthtender, or if you're collecting reviews on your own website or testimonials, you do not have to, you certainly need to know who these individuals are, so that you can provide the appropriate disclosures, but you don't have to publicly display their name. And so we do see a number of firms that choose to come to Wealthtender for that very reason, either so their clients can confidently write a review without disclosing who they are, or even the firm might say, hey, we know you may be comfortable sharing your full name, but we would prefer to not put that out into the world for multiple reasons. Beyond that, you know, safe strategies, back to the original question, Diana, a number of things that firms can do. So at a minimum, you know, you can think about all the different places where as a firm, you have control. And first and foremost, your website, you have absolute complete control. So this is an area where you can really mitigate risks that could occur on third party platforms by simply collecting testimonials and publishing on your website. Now, of course, the challenge is being the full goal and benefit of testimonials is that you're putting them more broadly into the world and helping to amplify that reach so that they're driving people to your website. But a very safe strategy just to get the ball rolling could be to invite all of your current clients to write a review. So to avoid the cherry picking concerns, the SEC really doesn't want you as a firm to simply selectively choose individuals to submit a review. So we always encourage advisors and firms to use a template that we make available. You can certainly personalize it, customize it, use whatever you wish. But we've seen that it's proven to be very effective. Send that out to all of your current clients and provide them that same opportunity to write a review, write a testimonial. If you're going to just do it on your website, you can simply, you know, have them even reply by email, but make sure you've got a collection of that. And then what I would suggest is having a testimonials page on your website where every single response you receive is listed along with the disclosures accompanying each and every review, as Leila mentioned, indicating whether or not the testimonial is coming from a current client or not, if they were compensated in any form to write that review or not. And then if there is any material conflict of interest, and that should be right there with each and every review because those disclosures may differ depending upon the individual. And then once you have all of those reviews on a single page, you do have the opportunity elsewhere on your website to selectively take certain reviews. So if you just want to highlight a couple of reviews, you can do that. But it's important to, again, ensure that wherever you put those reviews, if you have a handful of reviews on your website homepage, as an example, that you have all of those disclosures still there, along with an additional disclosure indicating that the reviews from those handful of reviews or single review are not representative and provide a link to that page where somebody can see all of the testimonials that you've received. So that's what I would consider to be the absolute safest strategy for the very reason you have complete control to have your policies and procedures really aligned to that. Now, of course, we designed WealthSender to also be a very safe strategy where essentially it's rented land. It's not your website per se. But coming upon and coming to our platform, you have all of those same abilities and the tools to very easily invite your clients to write reviews on a platform where those reviews are not going to be published when somebody submits that review until such time as we provide you with the details of that pending review, along with a form where you can add all of those disclosures that are required so you can feel confident that those reviews are not going to be published or visible outside of your walls until the appropriate disclosures are there. And then more compliance tools beyond that to help further from there as well. Where you start to get in and really open the door to regulatory risk are other platforms that really weren't designed with the marketing rule in mind, where I touched a little bit on Google, where if you are inviting clients to write a review out there, keep in mind there's not going to be disclosures to accompany those. And if somebody does say something that's a little problematic or outside the realm of what the SEC would consider to be a prohibited content or an acceptable testimonial, you do start to at least open that door to risk that if you reference, hey, go check out our Google reviews or you link to them or any number of factors that we still have yet to see crystal clear guidance on the SEC in terms of how they're going to treat and handle and ultimately enforce particular actions related to those types of platforms. It's just something to be aware of that, yes, they can be a place to collect reviews, but be aware that the further out you go on the spectrum, you are starting to open that door to regulatory risk.

Diana Cabrices (22:49): Yeah, we've seen horror stories. I mean, people getting reviews, advisors getting reviews on Google that they can do nothing about, that they have no clue who left it, that it was a spam review or somebody upset and trying to work through Google can be a nightmare. I'm sure you've heard that too, Leila. So I want to ask you one more question, Brian, just because we're on the topic of technology. And I think it's really important, as I mentioned in the beginning of this webinar, it's one thing to market, but you have to be able to scale and stay compliant at the same time. So let's talk about how technology can assist advisors in gathering these testimonials, but also showcasing them, promoting them while maintaining trust.

Brian Thorp (23:29): Sure. So, you know, thinking about technology, there are tools to help streamline the process and importantly, also the tools to help you when the SEC examiner comes into your office so that you'll be able to show that you've taken all the appropriate steps for compliance. And so what we've done with Wealthtender, just using that as an example of technology built for this very purpose is again, providing those tools so that you have the resources to use our templates and then send them from your CRM. So that's one piece of technology, knowing that that email going to all of your current clients from your CRM is going to be an easy way for you to be able to show that SEC examiner, you did not cherry pick at the outset that this went out to everybody. And then from there, leveraging the technology rather than going and building a repository to collect the testimonials, using a technology again, like Wealthtender or others, where you can then request those reviews or testimonials to come in where you're going to have a repository that's already designed to incorporate the appropriate disclosures along with any notes that you might need to add or additional disclosures. So perhaps there are testimonials as an example where one of the things the SEC says is if there's a claim made by, let's say a client within their testimonial about services you provided or something you've done for them, that needs to be something that you can substantiate. And so incorporating additional disclosures or having a repository where you can have that handy. So if the SEC says, well, this particular testimonial, this individual who's a client said you did this for them, can you confirm that or can you substantiate that? And if you, in real time, as those testimonials come in, just go ahead and substantiate it on the spot. It's going to make your life a lot easier when that SEC exam rolls around. And then beyond that, again, thinking about technology and how this can really take an individual testimonial, which testimonials essentially have been around forever in the form of word of mouth, people saying great things about you at a party or a social event. And the real power here of technology is that that individual submitting their testimonial on a platform designed to compliantly put that word out into the worldwide web is becoming really impactful, not only for SEO search engine optimization purposes to help your own website and your profiles rank higher in search, but also providing that ability for you to get better, better visibility and amplify the reach of that testimonial that historically was more of just a one-on-one conversation, but now can reach thousands or even millions of people across the country.

Diana Cabrices (25:55): Yeah. It's essentially a digital referral. It's the same thing as somebody referring you, but instead of one person being told you're amazing and they need to work with you, it's now hundreds, thousands, if not tens of thousands and more based on the power of the internet. So love that. Thank you, Brian, for your take there. Now I want to kind of move back over to you, Leila. And I want to talk about some pitfalls because there's always pitfalls to everything. And so when firms are using client testimonials, first off, I want to hear what common mistakes that you might've seen. I know you mentioned something earlier about the person not being a client anymore, and they didn't update that. And that sounds super important to update, but also just how they can stay compliant in these situations, especially if these endorsements are coming from paid or non-client sources.

Leila Shaver (26:43): No, and it's a good question. So, you know, first and foremost, one of the things I talked about and Brian talked about as well is this idea of control, right? Control of your website and control over these social media sites. I mean, ultimately, where you exercise control, that's where you have to comply. So if you've got a client and they're on their personal Facebook page and they left a review on the personal Facebook page, you can't force them to take them down. You can't force them to add disclosures to it. So there's no worry about trying to comply with the rule over something you don't have control over. And I say this also kind of in reference to the question in the chat. So if you have a post and you allow people to comment on the post and they leave something negative, technically, you're supposed to leave it, right? Because Brian also mentioned this idea of cherry picking. If you're going to accept testimonials, you have to accept all of them. You can't pick and choose which ones you're willing to display. Now, that is different from if you're on Google or Yelp or Yahoo or whatever platform and someone leaves a review and they're not a client. They've never come across your firm. Maybe it's the wrong business that they're referring to. There are like through these different platforms way to dispute reviews. That's not considered cherry picking. So you can do things like that. But if they are someone who has had a legitimate interaction with your business and they legitimately left a negative review, then yes, unfortunately, you would have to keep it. But that's where when I go back to talking about control, you can look at things like depending on the platform, you can restrict where anyone can post to your post on social media. You can restrict comments. Like some websites allow for you to leave comments. You can restrict commenting on your website. So there's a lot of different settings that you can take advantage of to kind of limit the ability for someone to leave any sort of comment or testimonial so you can have more control over how any testimonials are displayed. So if we're going to pursue client testimonials as a firm, really take the time to identify what are the platforms you want to use. Look at the different settings for that platform. To Brian's point, a lot of these platforms are not set up to specifically comply with financial services related regulations. So you want to look into that and then make a decision where you would want to kind of push all of your clients or non-clients to go and leave those testimonials. So just thinking it through, right? Just thinking it through, thinking it through operationally, doing a little bit of due diligence and figure out what works best for your firm. So I think that's the big thing. I think the second thing too is a lot of companies, they're working with marketing teams that are not necessarily familiar with financial services or they don't work with a lot of companies in the financial services industry. So they don't have an understanding of what the marketing rules are. So if you have a website designer who or someone who's creating your content and they're not aware of these rules, they may be adding content that's problematic or they may be posting testimonials that don't have appropriate disclosures with them. So you have to also inform your vendors that you may be outsourcing some of your marketing to, so they kind of can understand not only there needs to be contemporaneous disclosures with these testimonials, but some of the other kind of problematic issues we've discussed, right? Saying that you're conflict-free, not being able to substantiate certain claims. From a marketing perspective, it sounds great to say you're the best firm around, but from our industry's perspective, you have to be able to substantiate it. So I think taking the time again to educate your vendors who may not be as familiar with the financial services industry is going to be really important. In terms of specifically endorsements, I think this is where we've seen some guidance come out of this recent kind of enforcement action. So there was a firm that essentially became the official financial advisor of an organization and they had banners, they had social media posts, they had tote bags, whatever that says, you know, here's the firm name, we're the official financial advisor, we're the official partner of this organization. The SEC said that's an endorsement and none of the none of the physical items, the banner, the tote bag, the social media posts, none of those things had disclosures related to it. And I know some of you are like, WTF, what are you talking, I'm supposed to put disclosures on a freaking tote bag, like I'm supposed to put disclosures on a banner? Yeah, apparently according to the SEC, when you have something that says simple as we're the official partner of or we're the official financial advisor of this organization, that is considered an endorsement. So I think some of the things we need to start thinking about because of this recent order that we got the opportunity to read and learn more about, is that you've got to start thinking about what are the statements that you are making in your marking that could be considered endorsements and start thinking outside of the box, essentially. And, you know, that's something that maybe many of us wouldn't have considered to be an endorsement and the regulators are seeing it that way. So that's kind of a big thing that's come up that's new. But I think in general, with endorsements, you have to remember you have those three disclosures, right? Whether or not you're a client. So if you're not a client, you have to be very clear that they're not a client and what they are their service provider, their vendor, their partner, whatever the case may be, whether they were compensated, right? So we have that compensation piece. Also, remember the marketing rule combined the advertising and solicitation rules. So some of that paid part of it also may mean that you have a relationship with someone who's considered a solicitor. Under the new rule, they're now called promoters, right? So if you have someone who is a promoter for your business, remember there's additional requirements, like having a promoter agreement with them and disclosing that compensation arrangement as well for any endorsements they make. So those are things you definitely have to think about. Now, silver lining, there is a de minimis exemption. There's $1,000 de minimis exemption. So you can compensate an individual up to $1,000 in a 12-month period for providing a testimonial or endorsement. That didn't exist before. So now that's nice. You can get your gift cards out, go buy an iPad, give it away in a client satisfaction rally or whatever. But those are things you really have to think about and make sure you stay informed. And then finally, one other kind of area that you should keep in mind is one of these orders that came out last month as part of the nine firms that were signed through these different enforcement actions, this idea of testimonials that were made by people that are no longer clients. So perhaps at the time they made the testimonial, they were a client, but at some point they stopped. And the idea is that regulators are expecting us to go back to these testimonials and update them if that person is no longer a client. So this idea of keeping your disclosures up to date and fresh. So that's something to keep in mind too, because I don't know that a lot of advisors were thinking about, I have to go back through my disclosures and review them and make sure it's still up to date. So that's something else you've got to keep in mind as well.

Diana Cabrices (34:32): Yeah. So many good points here, timely, relevant, and what you had to say about checking with your marketing providers. It really hit home. I think I remember vividly, it was like back in 2018, maybe 2017, I was on a speaking circuit for a company I'd worked for, and we had partnered with a website provider. And we got on stage in front of a bunch of advisors and they started talking about how when they build your website, they're going to be able to incorporate all your testimonials. And it's going to look really beautiful. And this was back in 2017, 2018, before the new SEC marketing role was still in the prohibition era. And so many people in the audience were like, wait, what? They were scratching their heads. But there were some that didn't even genuinely follow. They're like, oh, that sounds great. And so if your marketing provider isn't specific to financial services, I could not agree more with your advice there, Leila, you need to check in with them. And maybe for me personally, if I'm putting myself in the financial advisor role, I might consider only hiring marketing professionals that are specific to financial services, because this is highly regulated stuff. So okay, love that, Leila. Let's move over to Brian. And then I have a couple more questions. If we have time for them, we'll see. But I do want to take a quick pause, encourage the audience if you're here to drop any questions that you have. We have a chat box open, you can send it directly to us. We have a Q&A box open, whichever one works best for you. We've already gotten a few good questions in here. Thank you, Katie. And we're going to go ahead and move along. So let's talk about the implementation side of it, Brian. As advisors adopt compliant strategies, like what practical steps can they take to minimize the risk of the SEC penalties while also focusing on growing the business?

Brian Thorp (36:19): Sure. So first and foremost, in terms of the actual steps, I think it's important to establish your policies and procedures and really use that as the guidepost and framework for what your approach is going to be. Because there's some things you can really take into consideration here where your policies and procedures might actually say, here are the platforms where we actively collect testimonials or perhaps narrowing in to indicate whether or not you accept and promote testimonials from only current clients or if you do also allow endorsements from non-clients. Do you have a policy around compensation? Are you going to allow your advisors to provide any form of compensation, which again could even be a gift card and there's also some gotchas. So if your tactic or your approach is to say our policy is that we only accept testimonials and solicit testimonials from current clients who are perhaps even taking it a step further, who are not family members, who are not related in any way or vendors, you can really hone in and be very specific to provide yourself with the framework to kind of help keep you within those guardrails. Now with that said, if those are the rules that you put into your policies and procedures, you need to make sure you abide by them. So again, the SEC, the opportunity for them to go back and just see if you are living up to your approach, but if you have thoughts around what's going to be most important and impactful for your firm, that's a great way to, a great place to start. So, you know, making sure you have the policies and procedures in place. Beyond that, I think then training your advisors and ensuring that they understand what the policies and procedures really entail, and then ensuring as well that you're inviting all of your current clients when you're ready to get started. And that could be through an email. If you have a client newsletter, you could have a section inviting your clients to do it there, which would also be a great way to be able to say, hey, we put out that invitation to all of our clients. Now I will say you're going to get a much better response rate by having that come from your CRM and your individual advisors, inviting clients and to write a review or provide a testimonial. Then beyond that, you know, thinking about that implementation, now that you've got those testimonials that are coming in, where you can really put them to work for you. So deciding upfront, and again, I would encourage having this in your policies and procedures, where will we promote our testimonials? Will we put them on our website? Do we anticipate incorporating them in third-party platforms? Will we utilize them in testimonials or social media posts? And if so, what is the policies and procedures that you're going to have around how you ensure that when you're completing those or creating those testimonials, social media posts, that you're incorporating the appropriate disclosures and having a process. So perhaps as it goes to somebody in marketing, that there's also a sign off by somebody in compliance to look at those as well. And, you know, like we've talked about earlier, we'll have a playbook at the end that provides a lot more practical steps. So I think some great tips in there, but turn it back to you, Diana, so we can kind of take some more questions here as we see those coming in.

Diana Cabrices (39:16): Yeah, we've got some active questions going on. Leila's hopped in. She's been answering some of those. Thank you so much. I want to move on to let, you know, the reality where we're at today, right? That there are SEC sweeps and they're going to continue. It could be tomorrow that the regulators come knocking on your door. So I want to talk about some proactive steps that firms should take to audit their websites and their marketing materials. One of the ways we marketed this session was, is your website a ticking time bomb? So I'm going to leave this one open to the both of you. You can both chime in or just one or the other.

Brian Thorp (39:52): Sure. I'm happy to start, Leila, if you like. So, you know, I think, again, Leila and I, we both look at a lot of advisor websites and, you know, a couple of the places I would encourage everybody to start advisor bios. So the biography of the advisor, because that's such an easy place within a few sentences to say, you know, here's an award I won or, you know, something that it's really feels innocuous. But then you take a step back and go, oh, well, I just talked about something that is, you know, an award that's going to require disclosures on an Investopedia top 100 advisor or whatever the case may be. So, you know, really looking at those advisor bios and then going back to the substantiation requirement. When you're looking at the various aspects of your website, you know, are there things there that you feel confident if asked, if not provided right there, front and center, that you could substantiate very quickly and importantly, if it's something that you feel really requires substantiation, think about how you could maybe incorporate that to be there published on the website right alongside whatever that particular topic or matter is. And then the last thing, and Leila, I'll turn it to you is gamified a little bit, you know, put it out to your, after you have the education with your advisors, you know, put it out to your advisors to say, hey, you know, let's have a little fun here and have some prizes or awards to say, go see what you can find within your bio or on the site and essentially turn the entire team into compliance vigilance, if you will. And use that as an opportunity though, to make it a little bit more fun by giving some little rewards for those that help identify some of the areas that may have been overlooked.

Diana Cabrices (41:29): Love that. Leila, would you add anything to that?

Leila Shaver (41:33): Yeah, I mean, just a couple things to add. And I think this is where advisors can really use technology to their advantage to help stay compliant. So, you know, I know advisors that are using YouTube, they're doing radio stations, they're recording webinars like this and putting it on YouTube. You know, they've got great websites. This is where I think if you utilize technology to help, you can make your life easier. And what I mean is in websites, you can create template pages, right, and apply that template to the content in your website. So, whether it's a blog, a biography, but that template, if you make it template and it's applicable, if you need to change your disclosures, then all you have to do is change your template and apply those changes wherever that template's being made. So, one of the issues that comes up is, you know, like if you sell your firm, if you join another firm, if your name changes, you know, we have to update those disclosures, right, if your firm is just a DBA for another firm. You move from firm to firm as, you know, if you get acquired by a different firm or you drop a brokerage relationship or an advisory relationship, you need to make sure those disclosures are updated. So, utilizing a tool like a template on like WordPress, that'll make it easier to make the change once and it'll apply everywhere in your website. Same thing with YouTube videos. You know, if you have like an end screen or a beginning screen that has your disclosures, make that something that gets added to each video through the YouTube settings. That way, if something again changes with your disclosures, you just have to update the one beginning or end screen and then update it in your videos. So, things like that. And I say this because we have a client most recently that got acquired and they have to go and update all of their marketing material to show that they're no longer an independently registered firm, right, they're part of a different company now. You can't keep those old disclosures. And the same thing comes in play with, you know, testimonial endorsements. Make sure you have some sort of template that anyone who is managing your testimonials and endorsements, making sure that they understand what are all the key disclosures that are required. Training is always good. Ongoing education is always good. But I think one of the things that firms need to think about as well is operationalizing this, right? There should be some sort of quarterly task where someone in compliance or someone on your team is going in and reviewing your website, reviewing your social media, reviewing those testimonials and making sure that they're staying up to date, they're staying refreshed. And to the extent you have someone who left a testimonial that's no longer a client, well, we got to go update that disclosure now. And you can say something like, at the time the testimonials provided, this person was a client, but at this time they no longer are. So those are the things I would say, go ahead and start implementing, be proactive, implement those processes, do that testing. So you can make sure that you're keeping your content fresh. And then if you've heard anything today, right, if you're the official partner organization and that triggered something for you and you're like, oh shit, you know, go do something about it now because now you are on notice and you've got to act. And just to make sure everyone understands, those fines on those nine firms, the smallest fine was $70,000. I know a lot I could do with $70,000. I can do business development, I can invest in my marketing, I can go hire someone. That $70,000 could do a lot for my business to promote it and grow it. It does not belong in the pocket of a regulator. That is the worst place it can go. So I think it's really kind of, don't be afraid of implementing different marketing strategies. I think it's just be informed, be smart about it, think it through, operationalize it, and then implement it.

Diana Cabrices (45:56): I couldn't agree more. Such great advice. And we had a question just, I'm going to go ahead and insert it here. Since you mentioned YouTube videos, how much should an advisor worry about something they spontaneously utter on a live webinar that might be problematic? Great question.

Leila Shaver (46:14): I suppose it depends on what you spontaneously utter. I can answer where some of the disclosures that you provide as part of your video, and I like to put the disclosures at the beginning because statistically speaking, most people don't watch a video all the way to the end. And if they do, they're sure as hell not going to wait after you say, okay, thanks guys, and then wait to read the disclosure end screen. So I always recommend putting those disclosures at the beginning and putting the things like, this is the independent views of the advisor. This is for educational purposes only. It's not to be taken or construed as financial advice. Talk to your financial advisor about how this information pertains to you. I think it's really important to get those disclosures in the front end when it comes to YouTube videos or radio shows, anything where it's audio or visual, you want to get that content in advance of the content. But I think it's okay too, if you randomly said something that you think is inappropriate to go back and clarify, hey, I said this earlier and I want to make sure I'm very clear about this statement. Like, this is just an opinion. It's not meant to be advice for you guys to go and act on right now. Like, I don't know you and your circumstances, so don't take what I just said as advice. Take it as something to go have a discussion with your financial advisor about. So I think there's things you can kind of say in the moment as well to kind of modify or address anything you said that you think may have been problematic.

Diana Cabrices (47:45): Yeah, those are great tips. And there's always the replay. You can always, if you're going to post the replay, you can always add in additional disclosures there. And edit. You can always edit too. Yes, absolutely. Okay. I'm going to throw this next question at the both of you, because I think you both have very interesting perspectives, you know, Leila, with your practice as a lawyer, helping firms, and then Brian, really being in that technology space. So maybe we'll start with you, Brian, then we'll hear from Leila, and then we're going to open it up to Q&A. We do have another question in the chat, so I want to make sure that we're giving some time to the audience. Then we had a couple other questions that were asked before the webinar. So where do you see marketing compliance heading in the next few years as the SEC continues to crack down? How can firms prepare for future scrutiny? Like where is this thing going to evolve to?

Brian Thorp (48:36): Yeah, so I think one of the things we've seen is as much as we're talking about testimonials, and certainly the firms that have been fined for the activities that they've had in this space, it's still very early days. And I think what we're going to see, just as we've seen in every other profession and industry out there, is that online reviews, testimonials really become part of the fabric of marketing going forward. And that, of course, means that firms do need to be comfortable from a compliance perspective. So we've seen the rule, we've seen the risk alerts, we're now seeing the enforcement actions. We've got the blueprint that provides the guidance in terms of what you can and can't do. And now, as Leila mentioned, I think just not being afraid to really take advantage of this. And again, as Leila likes to say, you know, turn compliance headwinds into an opportunity. And that's what this is all about. So I commend those that are participating on the call today, because you're still in that very early stage among the firms that are actively thinking about this. And importantly, the firms that aren't thinking about it yet are more than likely have some infractions and things that they're not even aware of yet, and that they're going to learn the hard way. So for those of us in the firms and wealth management firms and advisors that are being proactive, the next few years, I think you're going to be in a really good spot, because you've got the framework. And even if there's a small infraction, you inadvertently did something or fail to do something, it's going to be such a better outcome than those that are not taking a proactive approach. And those that aren't pursuing and taking advantage of the opportunity with testimonials whatsoever, are really going to be left behind, because we've already seen as advisors are getting online reviews on Wealthtender or testimonies in general, they may be competing with some very large firms that from a regulatory perspective could choose to allow their advisors to collect testimonials, promote them. However, whether it's a wirehouse firm or other national networks, they're not choosing to do so. So this is a massive opportunity for infinite advisors to look for the approach that they can do compliantly and not have those firm restrictions to position themselves to not only be very competitive on a compliance perspective, but also to, you know, really win some business in ways that they haven't been able to do before in terms of leveling the playing field with firms that have some really massive marketing budgets.

Diana Cabrices (50:48): Absolutely, I like that leveling the playing field. Leila, anything you'd say here?

Leila Shaver (50:53): I think, I think what firms need to keep in mind is that, you know, I get asked a lot by some of our clients, like, how do I get the next generation to stay with me, right? I'm servicing the grandparents or the parents. How do I get the kids or the grandkids to keep their assets with me? And I think some of how you have to think about marketing, because so many firms rely on word of mouth, referrals from current clients or past clients, is that really to stay engaged in this industry and to move your business forward and create longevity in your business, you're going to have to engage in marketing. And you're going to have to get on social media, as much as some of us may hate it. You're going to have to engage with people and reach through the internet to get it done, because that's simply what the next generation is looking at. That's how they're communicating. So when you're thinking about how can I grow my business? How can I keep these assets at my business through the generations? You've got to start thinking about what needs to change in your business. And a lot of that means that we need to start thinking about how we're doing marketing differently. There are very clear statistics that you can find out there that testimonials reviews are one of the best ways to attract new clients. They're one of the most effective ways to market your business and get new clients. So many people rely on reviews when they go look at restaurants, when they go look at movies, when they go look at, you know, I need a or I need a electrician, they're doing the same for financial advisors, they want to know what others are saying about your services. So I think it's really important that you keep in mind, kind of what you have to do as a business to keep your business moving forward to serve the next generation of clients. And that means that you're going to have to get comfortable with the regulations. This is still a relatively new regulation, we're going to see more guidance, we're going to see, like, I think right now, the last time I looked yesterday, the day before, there were only still four or five FAQs around the marketing rule. Rules that have been around for a really long time, FAQs will be 20, 30, 40 FAQs about them. So I think this is one of those things where we're going to see more enforcement actions, we'll see guidance, we'll see more FAQs. The important piece is that you're keeping up with it and you're engaging your compliance and your compliance people and your attorneys, whether they're in-house or outsourced, you've got to stay engaged with those people to stay informed about what you need to do and how you need to pivot. And that's something that you should be looking at when you're doing your annual compliance reviews, that's something you should be looking at when you're reviewing your policies and procedures, looking back at what's been issued in terms of guidance and enforcement actions, and then using that to inform any updates or changes in process that you need to implement. So I think, you know, the SEC is going to follow their rulebook, they're going to continue to do exams, they're going to continue issuing these orders for us to look at and learn from, there'll be guidance at some point. But I think what we'll find are kind of new novel fact patterns that we didn't think about either that they're applying the school to. So just stay informed. Stay informed.

Diana Cabrices (54:10): That was awesome. Thank you both for these insights and different ways of kind of your mindset on this topic. I think there's been a mindset shift here today with our audience. I want to move forward really quickly. We're going to do a live Q&A, but as we do that, so feel free to go ahead and drop any questions that you have in the chat. I have some of the ones pulled up here that we got, and I know we're running out of time, but I wanted to give you guys a way to download the playbook that we talked about. So here's the QR code. And then I'm going to just leave this up for 30 seconds or so. So you can scan that now. And then I'll also pull up Leila's information in case you're not connected with her, and you want to get connected with her with my RIA lawyer. So again, this is how you'll download the testimonial marketing playbook. And in a moment, I'll pull up Leila's information as well. I'm going to throw out questions, Leila, Brian, you guys feel free to answer them as you see fit. I got a question yesterday from Janice who says, Hi Diana, I work with offshore advisors who are Series 65. Can you specify the marketing roles for targeting US connected clients offshore?

Leila Shaver (55:17): That's a good question. Started with a bang here. Yeah. So listen, as long as these advisors, which it sounds like they are, because they're Series 65, they're targeting US based investors, then you're subject to the rules. So you would have to comply accordingly. So as long as you're subject to the SEC and to, you know, US securities law, you'll have to comply with the rule.

Diana Cabrices (55:42): Great, thank you for that. Okay. And I have here, let's see, we've got another question in the chat. So Jared, it looks like you're, Leila, it looks like you're already typing to answer Jared's question, but he was asking.

Leila Shaver (55:57): I started, but I can answer it live.

Diana Cabrices (56:01): So the question goes around asking like randomly throughout the year, would that be considered cherry picking, even though we have no control over whether they leave a review on Google or not?

Leila Shaver (56:11): So asking randomly is not considered cherry picking. What would be considered cherry picking is if you had a subset of clients that you only went to, to ask, right? So if it was clients that you're offering a particular specialized service for, or clients that have been with you for a long time, you know, would leave really positive reviews. Where you're kind of targeting people based on the likelihood of them giving you a positive review, then that starts getting into the region of would that be considered cherry picking? And I think depending on the examiner that you talk to, some would say, yes, that's cherry picking and it violates the rules. Some might be coerced and determine maybe that's not. But I would say, you know, if you're going to ask your clients, you know, use a methodology that's not going to prioritize or create favoritism or suggest that you're favored in one group over another. So if it's something that, you know, you're just randomizing the client list, you're doing it in alphabetical order, you know, maybe it's a new process you implement and the request for a review goes out four months after they become a client. Things like that, that kind of standardize the process, that's not going to be seen as cherry picking.

Diana Cabrices (57:28): Awesome. I think there's always been a lot of confusion around that. So I'm glad you asked that, Jared. Thank you for chiming in. This next question, I know Brian, you're going to want to take a stab at this one. So, and actually I have a slide that might be kind of perfect to display this. But do reviews of financial advisors really matter? Our firm has grown considerably and we're just not sure we need them.

Brian Thorp (57:52): Yeah. So the short answer as we wrap up is that they do. And again, I think with ourselves and issues of consumers, whether you're hiring a doctor or a lawyer, you know, trust-based professions, you probably didn't go look to see where they went to school or what credentials they specifically have. The first thing we all do as consumers is we're looking to read those reviews. And we've seen that in action. I think the quote you're sharing here from a firm that joined Wealthtender and very quickly saw success from those reviews they collected and then putting them into their marketing activities where they're winning business over other firms by simply taking advantage of that first mover status where they have reviews and other firms don't. And it's that emotional connection that these reviews can really help that consumer get over the edge and decide, yes, in fact, you're the individual or the firm that I'd like to work with based on what other people are saying about their experience. And so, yes, short answer is it can be absolutely an incredible way and a very affordable way for firms to grow with testimonials.

Diana Cabrices (58:53): Absolutely. Couldn't agree more. I'm going to look and see here. We have one or two other questions. I know we're at the top of the hour. What is your perspective on paying for testimonials? Either or.

Brian Thorp (59:06): I'll take a stab at that as well. My perspective, again, with the hundreds of firms, the thousands of reviews that we've seen come in, the fact of the matter is there's already an exchange of value. The clients are compensating you, the advisor, for the services that you provide. And there's that human connection where more often than not, even though they're paying you fairly, they're happy upon invitation and you asking them to write a review or share a testimonial. It's a feel good for them. They're proud of the fact they work with you as their advisor and they're happy to share that. In many cases, they've already been doing it offline in the form of word of mouth. And this is an opportunity for them to really share what you've done for them. And importantly, I think what you'll see is there's something top of mind for people when they write that review about their experience. And they're not talking about investment performance. They're talking about how you've made them feel and probably something important where you've made a difference in their lives, whether it's helping them transition to retirement or funding education for their children. And I really don't think you should feel that you need to hand over dollars in exchange, but you certainly can as long as it's properly disclosed. And in certain circumstances, maybe it makes sense to have like a little gift card or something. But again, keep in mind that if you do that, you are going to have to disclose that. And Leila, anything you would add?

Leila Shaver (1:00:21): No, I mean, there's no reason regulatorily why you shouldn't or couldn't compensate for a testimonial or endorsement. I think to Brian's point, like most people would be happy to do so, right? And I think more so than anything, it's just incorporated as part of your process. Sometimes you've got to ask a few times, hey, here's that link to leave the review or here's where you go. Or if you have a form, hey, here's a form, if you'll complete it, send it back to me. You may have to nudge them and follow up a few times. But most people, I think when you ask them, they're very happy to do it, especially when you say how important their opinion is. I think people really want to want to help and give that feedback.

Diana Cabrices (1:01:04): Yeah, yeah. And that's a great way to position this is I'm not just asking because I want to have someone toot my own horn. This is going to help other people decide if I'm the right fit for them. So always putting it back in that help lens, I think is great. You two have been star panelists, of course, no surprise there. Thank you both so much. We're already a few minutes past the hour. I just wanted to one more time leave this up on the screen here for anyone who wants this playbook. And then if you also not what I wanted to show. Here we go. If you also wanted to get in touch with Leila, here's her information here on the screen. Leila, Brian, this has been super informative. We've got the full recording, so we'll be sharing it with all the audience in the future. Any last things that you want to add here?

Brian Thorp (1:01:49): I really appreciate the time. And if anybody does have any questions or looking for some one on one, just counsel, but not in the legal sense, feel free to give me a ring. And again, I can't say enough great things about Leila. If you are looking for official legal counsel and the compliance.

Leila Shaver (1:02:04): I appreciate that. No, I really appreciate being included in this presentation. So thank you so much. I'm available as well. Please feel free to reach out with any additional questions. I'm happy to answer them. Otherwise, I hope you guys feel empowered today after this presentation that you walked away with some understanding that, you know, of what you can do and what you cannot do. And hopefully the next step is you'll go and start accepting testimonials.

Diana Cabrices (1:02:33): We all want. Awesome. Thank you, Leila. Thank you, Brian. Everyone who came today. Thank you so much. And we will catch you on the next webinar.