Financial Advisors Using Yelp for More than Just Restaurant Recommendations?
Financial Advisors Using Yelp for More than Just Restaurant Recommendations?03.11.2015
A new SEC guideline now allows investment advisors to publish public reviews on third-party websites, possibly giving advisors the opportunity to leverage this new freedom as a marketing opportunity to build business.
The new SEC guideline to rule 206(4)-(a)(1) of the Investment Advisors Act of 1949 essentially states that advisors may publish unaltered public comments about their services that are posted on third-party websites, provided that they include all comments, both positive and negative, and that the advisor has no connection to the third-party site or influence on the comments. Additionally, advisors may post a mathematical average of comments from third-party review sites.
Ultimately, this new guideline allows investment advisors to participate in a PR/marketing channel from which they have been previously excluded, due to SEC regulation. Multiple industries, including restaurants, hotels, spas, and so many more have relied on endorsements, reviews, and recommendations from happy customers on websites such as Yelp or Angie’s List as a form of promotion. Although this provides a new opportunity for advisors, they must carefully measure the pros and cons of publishing reviews as this decision affects both PR/marketing efforts as well as regulatory compliance.
For investment advisors, it’s important to keep in mind that the world of free, open-forum reviews is a double edged sword. The SEC guideline clearly states that both positive and negative reviews must be published as they are, unedited. Although positive feedback can give your advisory business a boost, it’s important to maintain compliance with the SEC and any other applicable regulations, as well as be prepared to counteract potential negative feedback. Although no professional desires negative feedback, not all negative reviews are bad. Sometimes, this is an opportunity to find out where you fall short, and show customers that you have taken action to remedy any previous challenges. In some cases, the story of turning an unhappy customer into a happy customer makes the best review.
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Written by CalSurance Team Published March 2015