No doubt within the first ten minutes of becoming a financial advisor, you received a list of taboos: those things you are never allowed to do because they are either ethically or legally forbidden. At the top of that list: using client testimonials.
Compliance officers often see the Investment Advisers Act of 1940 (206(4)-1(a)(1)) as a way to reject any marketing featuring the words of existing clients. To paraphrase, the law prevents any advertisement that refers to a testimonial concerning the investment advisor or concerning any advice, analysis, report or other service rendered by an investment advisor.
Unlike a lot of regulations, this one has merit. Referrals are almost always hand-picked in a way to ensure a positive response and consumers do respond favorably to them.
However, there is a difference between a testimonial where someone talks about the advisor and investment advice they received and a testimonial specifically about their experience and the sharing of a personal story that never mentions the advisor at all. Real-life stories create a connection far more powerful than any sales pitch. In addition, psychological studies show that buying decisions are more likely to be made for emotional rather than logical reasons. Testimonials help create that emotional connection.
So, if we can't use them outright, are there other ways we can generate the benefits testimonials offer?
There are other ways of minimizing customer skepticism and developing an emotional connection by showing the types of people with whom we work. Strategies that can have just as much of a positive effect (if not more) than a straight-out testimonial. Here are a few strategies that offer the benefits of testimonials without running afoul of regulations:
1. Publish a Lifestyle Magazine
For about $1 a copy, you can create a four-page magazine featuring the amazing lives of your clients. In their own words, the clients describe their beautiful dream house, their trip to Barcelona, or their work with charities. Be sure to include plenty of photos. Other than your company logo, no other reference to your company should be used (or is even needed).
Naturally, you'll need to first identify clients willing to share their story. To write the copy, if necessary, you can hire a freelance writer/editor through websites like Upwork or Fiverr.
Include in the publication any materials you would normally give to a prospective client. It can be far more effective than the standard brochure your competitors distribute. (Be sure to get approval from your compliance department before distributing.)
