SEC Risk Alert: 3 Takeaways on Testimonials for Marketing Teams
Key Takeaways:
- Disclosures must be visible and prominent at the time a testimonial is presented to meet SEC requirements.
- Unpaid client testimonials remain subject to core disclosure, eligibility, and oversight obligations.
- Effective testimonial programs should rely on a defined process, led by the client-facing professional.
In December 2025, SEC staff published a new Risk Alert regarding compliance with the Advisers Act Marketing Rule. We have previously discussed the rule’s seven general prohibitions and noted multiple enforcement actions related to compliance failures.
The new alert, titled “Additional Observations Regarding Advisers’ Compliance with the Advisers Act Marketing Rule,” focuses on two specific areas:
- Testimonials and endorsements
- Third-party rankings
In this post, we share guidance specifically for marketing and communications professionals, drawn from our own experience helping firms gather and create testimonials. (We will revisit third-party rankings in a future post.)
Highlights from the risk alert
For marketing teams, the alert offers a crucial "check-up" on current practices.
Here are three key takeaways regarding the deficiencies SEC staff observed around testimonials and endorsements:
- "Clear and Prominent" failures: Required disclosures were often hidden behind hyperlinks, printed in unreadable font sizes, or visually buried, failing the "clear and prominent" standard.
- Written agreement lapses: Obligations regarding written agreements—including the proper application of the $1,000 de minimis exemption—were frequently misunderstood or overlooked.
- Oversight gaps: Firms often failed to properly vet promoters or disclose material affiliations and disqualifications.
To understand these pitfalls in detail, we suggest reading summaries written from the standpoint of compliance professionals. There are a number of excellent legal updates on the topic, such as this one from Standish Compliance.
Guidance around unpaid testimonials
In our work with asset and wealth managers, we rarely see firms using paid third-party endorsers or paying current investors for testimonials. (Note: The Marketing Rule defines endorsements as coming from third parties and testimonials from current clients or investors).
What we do see is firms gathering unpaid testimonials from existing clients. While these are exempt from some stricter requirements (like written agreements), they are not exempt from core disclosure and oversight rules. For example:
| Requirements | Unpaid Testimonial Status |
|---|---|
| "Client" Disclosure | Required: You must clearly and prominently disclose that the person is a current client. |
| Compensation Disclosure | Not required (but recommended): The Rule does not strictly require you to state that no compensation was paid, but doing so prevents any ambiguity. |
| Conflict Disclosure | Required: You must disclose any material conflicts of interest. (While usually tied to payment, other conflicts could exist and must be stated). |
| Written Agreement | Exempt: You do not need a written agreement for unpaid testimonials (or those with de minimis compensation of $1,000 or less). |
| Disqualification Check | Required: Generally, you cannot use testimonials from "ineligible persons" (e.g., bad actors), regardless of payment. |
Practical suggestions for gathering unpaid testimonials
Based on our experience developing testimonial programs in the wealth management space, here are several practical suggestions for your workflow:
- Let the advisor lead: Whenever possible, the financial advisor—not Marketing—should make the initial approach. A respectful script might sound like this: "You told me something recently that really made an impression on me—and if you’re willing, I think it’d help other people to understand what we do here…."
- Stay brief: Ask for a 15-minute meeting with the client that includes both the financial advisor and a Marketing representative.
- Set expectations in advance: Share basic questions in the emailed meeting invitation so the client knows the direction of the conversation.
- Know exactly how you’ll use the material: Have a clear vision of how the testimonial will be used (e.g., paragraph-length vignettes or pull-quotes). Knowing this will help you ask specific questions—consistent with the overall direction you’ve shared—that elicit comments you can use.
- Capture the client’s voice: Take extensive notes to ensure you capture the client’s own words and tone.
- Review and seek client approval: Prepare the testimonial (potentially in multiple forms) and provide it to the financial advisor, who can then share it with the client for final approval along with a release form.
As always, work closely with your compliance team throughout the entire process!
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