PLANADVISER - July/August 2021 - 30

growing your practice / sales champ
" not fully baked yet in any of the shops, " Deringer explains.
" They're working on what they're going to do and what policies
and procedures they'll adopt. "
Another factor could be the perceived risk of being
among the first organizations to experiment with the new
rule, a status that is more likely to attract SEC scrutiny.
" You don't want to procrastinate and be scrambling at the
last minute to put in place policies and procedures, " says
Deringer. " But at the same time, being the first to adopt is
not an advantage either. So, I think everybody's in a little bit
of a waiting game, looking at what the industry is going to
do and how [it proceeds]. "
How Do We Do This?
Compliance attorneys will issue detailed guidelines eventually,
giving advisers a better sense of what they can and
cannot do under the marketing rule. Implementing the new
paradigm raises practical questions, though. For instance,
which clients should you approach for a testimonial, and
the new digital realities and really work hard to ensure that
clients are being well-served, that perceptions are positive,
that issues are resolved quickly and amicably, etc. "
While seeing negative comments on an online forum
always makes good businesspeople cringe, it is actually
a gift, Swift asserts. She says there have been studies
showing that companies with a few marginal or negative
reviews are seen as more credible and real than those with
100% positive reviews. " In addition, a good reality check
is always helpful; hopefully the negative or marginal
comment does not surprise the adviser, and perhaps the
issue can be mitigated and new comments added to the
online forum, " Swift says.
Having a written social media policy and a plan for what
... companies with
a few marginal or
negative reviews
are seen as more
credible ....
how should you pose the question? Hourihan emphasizes
the need to avoid forcing the issue or making it feel
contrived, whether you are discussing social media or traditional
advertising methods. " I would say advisers should sit
down and pick their top five favorite clients, " she says. " The
next time they're in a regular plan review meeting, add it
as an agenda item, and then just bring it up and explain
that the industry's changed. 'Social media is here to stay.
Would you be willing to provide us with a testimonial based
on your working experience?' "
Marie Swift, founder and CEO of Impact Communications
Inc. in Leawood, Kansas, suggests an alternate, more wideopen
approach. She reports that, in her attendance of webinars
with industry compliance professionals, some experts
have suggested approaching not only a firm's best clients.
Instead, Impact's advice is to offer testimonial opportunities
to all of the firm's clients via email or a survey mechanism,
or to add their comments to LinkedIn, Facebook and
other business pages and directory listings such as Yelp and
Google My Business.
That may sound risky, but Swift points out the inevitable
difficulty of squelching bad online reviews. " The reality is
that anyone can now go online and post their comments
about the firm, " she observes. " So, we all need to get used to
to do in the event of less-than-stellar comments is a good
idea, she continues. If you decide to edit comments, be sure
to review the rule's marketing guidelines. For instance, if you
delete or suppress negative comments or prioritize positive
comments, the SEC will attribute the comments to you as
indirect statements. Fortunately, per the rule,
you may edit " profane, unlawful or other such
content according to a neutral pre-existing
policy as the adviser adopting the content. "
requirements-essentially
Mind the Rules
Deringer says that the SEC generally did a good
job of establishing a principles-based approach
with the new rule vs. the prior prescriptive
prohibitions. This will allow compliance
departments rather than the SEC staff to make
judgments " in terms of what should and should
not be allowed, " he says. However, the rule does
spell out specific prohibitions and disclosure
honesty-in-advertising
guidelines.
Prohibited are:
* Untrue statements or omissions;
* Unsubstantiated material statements of fact;
* Untrue or misleading implications or inferences;
* A less than fair and balanced treatment of material
risks or material limitations;
* Cherry picking; and
* Otherwise, materially misleading items.
Endorsements and testimonials also have their own
required disclosures, covering compensation and material
conflicts of interest. Obviously, all marketing communications
will continue to need review. " If the firm is planning to
put one or two comments, with attribution to the client, in
a brochure or a white paper or on its website, check with a
compliance professional to ensure that this is permitted and
that all of the proper disclosure statements are included, "
Swift recommends. " Asking the client's permission and
getting confirmation in an email exchange will likely suffice
in a compliance audit. "
Another possible catch can arise if you have endorsement
arrangements that were established under the
previous cash solicitation rule, because those arrangements
are now covered under 206(4)-1 instead of a separate
30 | planadviser.com July-August 2021
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