Ratings and reviews of financial advisors are here, as is the technology to support both the reviews themselves and the expected compliance requirements.
Whether to allow such reviews is sure to be something advisors and their firms will wrestle with going forward.
When searching Google for advisors that I know have reviews, the SEO advantages seem obvious.
Over the last few months I’ve spoken with the founders of three technology platforms that serve advisors in creating, publishing, and hosting reviews—Amplify Reviews, Indyfin, and Wealthtender—as well as some advisors pioneering their use and a compliance consultant.
For years, advisor testimonials were forbidden, but with the implementation in May 2021 of the SEC’s marketing rule, financial advisors gained new options that now allow them to solicit client reviews, recommendations and testimonials.
The risk alert published by the SEC on June 8 reiterated that the commission will be looking for “reasonably designed” policies from firms using testimonials in marketing and diving more deeply at times into reviews searching for “ineligible persons” and whether reviewers were clients, compensated or had conflicts (the “3 C’s”).
“Many advisors already have accolades and testimonials and I think the rule is going to give them more guidance on how to do this compliantly,” said Tiffany Duncan-Magri a regulatory advisor at compliance and communications archiving and monitoring technology provider Smarsh. In her work she specializes in cloud-native digital communications capture, retention and oversight.
Smarsh's Tiffany Duncan-Magri
“Many advisors are not doing it compliantly based on some of the firms I’ve reviewed,” she said.
That would seem all the more reason to find the right technology partner if you are interested in ratings and reviews.
Even so, I’ve been surprised to find the uptake has thus far been slow and so I sought out a few advisors that have taken the plunge to find out why they did.
“I know when I’m shopping I care about reviews, how many are there, what do they say?” said Rex Macey, CEO of Atlanta-based RIA Red Tortoise. He added that ultimately, he believes reviews and ratings for advisors will be table stakes.
Amplify CEO Whit Lanier
“If a potential client is visiting the websites of two advisors and one has reviews and the other doesn’t, they are going to go with the one with reviews,” he said, noting that when he first heard about the new marketing rule that he wanted to be prepared for it.
Macey is working with Amplify Reviews, which is a relative newcomer to the advisor market.
While Amplify may be new to advisors, the company’s team, as noted on their website, has been helping highly regulated companies with their online reviews for nearly a decade. Amplify co-founder and CEO Whit Lanier points out that doctors started down the reviews path in 2014. His firm now has years of experience working with lawyers and realtors too.
“Feature-wise, we are very mindful that if advisors draw the attention of the SEC, and [the commission] basically wants receipts showing that reviews have been verified, our platform can provide that,” said Lanier.
He explained that with Amplify’s process, an RIA uploads a list of clients and an email request goes out with each link being sent with a tracker. An RIA visiting their dashboard on the technology provider’s site can then see what has been sent and who has responded and is filling out or completed a review.
This is a key Amplify differentiator from generalist review sites like Google or Yelp, he said, because every review his firm publishes is from a verified client who has completed an independently administered survey.
“Users [advisors] can archive a review and provide a reason and some explanatory commentary like ‘obscene language,’ ‘this has an unsubstantiated future predictions’ etc., and if they ever got audited they would have a record,” Lanier said.
And that last item should be a top concern of advisors thinking of using a reviews provider according to Smarsh’s Duncan-Magri. The firm works with more than 6,500 companies across different industries and monitors and archives more than 3 billion messages across more than 100 channels (whether email, text, social media, etc.) every day.
“If you need to go back and get a record from them [your provider] for an audit can you get it from them immediately?” she said, noting that she expects to see an uptick in audits and sweep reviews of firms because of an expected push by the SEC enforcing the marketing rule.
Wealthtender CEO Brian Thorp
A part of those exams and audits the SEC will likely be looking for “reasonably designed” policies and an indication that firms understand both what they are doing and how the technology works, she said.
“Off-channel communications—texting, for example—has gone unenforced for a long time and the SEC is looking at it now,” she said, noting that advisors need to do a holistic analysis of vendor risk management and consider factors including cybersecurity and privacy.
“Privacy is a huge concern. Do you have the option for people to opt in? And opt out? And then record keeping and supervision is paramount,” she said, “Retain it and supervise.”
“Communications, ways to be more proactive, looking through your comms and reviewing them and be able to prove that it happened under audit—that you were reviewing—ground zero has always been your policies and procedures but now we are moving into ‘I want to know a detailed account of your supervision, a growth of that over the last couple years,’” Duncan-Magri said, adding that the days where the expectation that regulators will be more lenient in some of these cases are disappearing.
Brian Thorp is the founder and CEO of Wealthtender, which he launched in 2019 after he had spent some 22 years with Invesco (the last three as head of financial advisor platforms at Invesco US).
“Wealthtender is very squarely focused on helping investors find an advisor,” Thorp said, adding that more than 260 advisors (about half state-registered and the other half SEC-registered advisors) have joined the profile and matching site and that of those, 50 have begun collecting and promoting reviews (for which there is no additional charge to the flat monthly fee Wealthtender charges, which ranges from $29 to $59 per month across three different plans).
After joining and setting up their profiles advisors can turn on “certified advisor reviews” and download a widget allowing advisors to collect and display the reviews on their websites.
Advisors can also somewhat customize how the reviews will look but the disclosures, bullets at the bottom of the reviews, ratings themselves and the reviews “must all be within the four corners of the review itself.”
While it is required that the reviewer share their email address, she or he can be anonymous on the review or provide their name or first name only. And once the reviewer submits the review it is not immediately published but is sent to the advisor who checks the three boxes that regulators will be looking at: whether it’s a current client, that there was no compensation and that there are no conflicts of interest (or that anything needing disclosure is disclosed).
Wealthtender also allows advisors to import reviews from Google and Yelp (it is important to recall that users own the reviews they write, not the firms that host them). Such reviews will be noted with a small icon.
“The emotional connection consumers can make about an advisor in a review are also going to be very valuable—how does that advisor make them feel?” said Thorp. “In a trust-based professional, that can be one of the most important factors beyond just the credentials and facts about the advisor.”
“Advisors that get started with reviews, they will get the opportunity to not only stand out and boost their SEO results, and in a few years if you don’t have a pretty solid lineup of good reviews, well who is going to go with you?” he added.
After my years working with PC Magazine, where we tested, rated and wrote reviews on everything we did, whether hardware, software or web services, I have to agree, once people—investors—get used to seeing reviews for advisors, they will expect to see them.