Ensuring video testimonials comply with SEC’s marketing rule

For advisors who want to reap the benefits of SEC’s revamped marketing rule, Vidiance is offering a solution.

The video marketing agency has launched a program that will aims to help advisors create professional-quality videos, such as client testimonials, advisor profiles and more – and it’s 100% remote.

“The firm's compliance oversight greatly reduces re-shoots and ensures videos are in keeping with current regulatory requirements prior to the review by a compliance department,” according to a Vidiance statement.

But is it worth the time and expense? With the opportunities provided by the SEC marketing rule, Brian Thorp, founder and CEO of Wealthtender, a platform that helps clients find advisors and provides an SEC-compliant online review platform, says advisors can utilize these services to do more professional recording of testimonials with their clients.

“It's not cheap … but if there's a really glowing testimonial, you can really tell the difference between just an advisor trying to capture that testimonial or him or herself over a Zoom video, versus the professional quality of other types of video production firms,” he said.

Thorp added that there’s been a great acceleration of interest from advisors after seeing other firms taking part, and he expects more seasoned advisors taking advantage of what Vidiance has to offer.

Andrew J. Evans, CEO and founder of Rossby Financial, an RIA platform, doesn’t think videos are for every advisor, but said they’re certainly for those who want to be active, who want to grow a web presence, and who want to actively showcase that they have a robust following of clients.

“This is a very solid way for them to get content made quickly that is impactful for the growth of their business,” Evans said. “It's directly about them, their culture, and it brings advocacy for them.”

Robert Sofia, CEO of Snappy Kraken, a digital marketing firm, said that Vidiance is still a young company and that it can take several years to get established compliance workflows.

“You need to get content approved, sometimes preapproved, [compliance] needs to review it and there's editing that needs to be done,” he said. “They have certain disclosures they want included, and they want certain archiving and record retention included. When it comes to testimonials, there's special disclosures around whether they were paid or receiving any compensation.”

Sofia added that Snappy Kraken has worked hard to get its workflows created, having gone so far as submitting documents like scripts and outlines to Finra ahead of time.

“One key to success here is having a good workflow in place so that all of your advisors can benefit from this kind of opportunity,” he said.

He said that in updating the marketing rules, SEC took a huge stride by allowing advisors to use video testimonials in their marketing – a type of marketing the industry has been behind on for a long time.

“What [Vidiance] is doing is really important, video content is really important. We consistently find that video content outperforms text-only content,” Sofia said.

If advisors are looking to start filming testimonials, Thorp recommends putting out an invitation to all current clients to write a review.

“As you see those reviews [from clients] come in, it's very likely that you're going to see really glowing reviews or thoughtful reviews coming in from certain clients that maybe cover a particular topic or how you help them as an advisor that you didn't even realize,” he said.

While Evans thinks the SEC is doing the best they can with limited updating of regulation, he would like to see more advances in the core regulations for advisors.  “That can then trickle down faster to firms who are writing out their policies and procedures, then deliver that back to the compliance and supervisory teams, which then, ultimately, come back to our advisors and allow their creativity to flow.”

With the new marketing rule, advisors have a opportunity now to leverage testimonials and endorsements, Sofia said, with the ability to get their clients on camera talking about the value the advisor delivers and doing so compliantly.

“That is a good thing, and more advisors should do that,” he said. “It will help them differentiate.”