For decades, SEC-registered advisors were effectively barred from using client testimonials. The updated Marketing Rule’s compliance date arrived in November 2022, and the door opened. Advisors can now encourage Google reviews, display testimonials on their websites, and use endorsements from non-clients — all legally.
But the rule didn’t simply flip a switch from “prohibited” to “allowed.” It created a new compliance framework around testimonials and endorsements with specific disclosure requirements, documentation obligations, and lines that are easy to cross without realizing it.
Fewer than 10% of SEC-registered advisers report using online reviews or testimonials, according to Kitces.1 The ones that are — many through Google reviews — may be creating compliance exposure they don’t know about.
When a Google Review Becomes an “Advertisement”
A Google review is not automatically an advertisement under the SEC Marketing Rule. It becomes one when the advisor crosses into entanglement or adoption — two doctrines defined in the SEC’s adopting release (IA-5653)2 that determine when third-party content becomes attributable to the advisor.
Entanglement occurs when an advisor involves themselves in the preparation of a review. Merely providing all clients an equal opportunity to leave candid feedback — such as a link to the firm’s Google Business Profile in a newsletter — does not, by itself, make the resulting reviews attributable to the advisor.
But if the advisor selectively asks certain clients for reviews, coaches them on what to write, or guides their responses to encourage more positive content, the advisor has become entangled. The review is now the advisor’s communication — an advertisement — subject to the full disclosure and compliance requirements of the Marketing Rule.
Adoption occurs when an advisor explicitly or implicitly endorses or approves third-party content. The most common example: pulling a Google review from the firm’s Business Profile and displaying it on the firm’s own website. That’s adoption. The advisor has taken someone else’s words and made them their own.
The practical consequence is that an advisor can have dozens of Google reviews sitting on their Google profile with no compliance issue — but the moment they select a few and put them on their website without the required disclosures, they’ve created an advertisement that may not comply with the Marketing Rule.
The Three Disclosures Most Firms Miss
When a testimonial becomes an advertisement, the Marketing Rule requires three specific disclosures under § 275.206(4)-1(b)(1)3, clearly and prominently. The SEC’s Division of Examinations has already documented firms getting them wrong.4
- Client status. The advertisement must disclose whether the testimonial was given by a current client or, in the case of a former client, that it is an endorsement. Google reviews can come from either — and the rule treats them differently. Many firms display quotes or reviews without any indication of who provided them or their relationship to the firm.
- Compensation. If the client received any compensation — cash or non-cash — for providing the testimonial, that must be disclosed. Even something as small as a gift card or a referral credit can trigger this requirement. If no compensation was provided, the safer practice is to say so explicitly.
- Material conflicts of interest. Any conflicts arising from the advisor’s relationship with the person providing the testimonial must be disclosed. If the testimonial provider is a family member, business associate, or has any other relationship that could create bias, that needs to be stated.
The rule also requires additional disclosures about the material terms of any compensation arrangement and any material conflicts — these three are the baseline, not the full list. And all disclosures must be “at least as prominent” as the testimonial itself. A testimonial in 16-point font with a disclosure in 9-point text at the bottom of the page does not meet this standard. The SEC exam staff has specifically flagged disclosures that are in smaller fonts, lighter colors, or physically separated from the testimonial they’re meant to qualify.
The Paraphrase Trap
An advisor writes on their website: “Our clients often tell us they finally feel confident about their retirement plan.” The advisor didn’t think they were using a testimonial. They thought they were describing their own value proposition.
But phrases like “our clients say,” “clients tell us,” and “the feedback we hear” attribute statements to clients about their experience — which could be read as creating an implicit testimonial under the rule. Even if it doesn’t clearly trigger the testimonial-disclosure regime, this kind of language raises substantiation and fair-balance questions: can the advisor support the claim? Is it presenting a balanced picture? At minimum, it’s a gray area that invites examiner scrutiny.
Responding to Reviews Can Create Exposure Too
In most industries, responding to every Google review is a best practice. For SEC-registered advisors, it’s more complicated.
When an advisor responds to a Google review — particularly a negative one — they may increase the risk of triggering the adoption doctrine. Depending on the facts and circumstances, engaging with a review could be seen as endorsing or approving the content, which may make the review attributable to the advisor as an advertisement.
The safer approach for handling negative reviews is to contact the client directly rather than responding publicly. For positive reviews, a simple acknowledgment is less risky than a detailed response that engages with the specific claims the client made.
What SEC Examiners Are Already Finding
The SEC’s Division of Examinations has identified testimonials and endorsements as a common area of deficiency.4 Among the findings documented in recent exam observations:
- Missing client status disclosures — testimonials appearing without any identification of who provided them
- Inadequate compensation disclosures — advisors providing referral rewards or gifts without disclosure
- Disclosures that aren’t prominent enough — buried in footers, rendered in smaller fonts, or physically separated from the testimonial
- Testimonials pulled from third-party sites without accompanying disclosures — the adoption problem described above
- No written agreements — the rule requires a written agreement with any person giving a compensated testimonial or endorsement, describing the scope of agreed-upon activities and compensation terms
- Failure to recognize endorsements — advisors not recognizing when a statement by a non-client (such as a referral partner or media mention) meets the rule’s definition of an endorsement
These aren’t edge cases. They’re the most common patterns examiners are seeing across the firms they review.
The Opportunity Is Real — But So Is the Exposure
None of this is meant to discourage advisors from using Google reviews. The data suggests they should.1 Advisors tend to receive overwhelmingly positive reviews — 92% are five-star,1 compared to 80% across all industries — and with 165,000 monthly Google searches for “financial adviser,” a strong review profile is one of the best ways to attract prospects online.
But the firms that benefit most from testimonials will be the ones that get the compliance right first. That means understanding when a review becomes an advertisement, implementing the required disclosures, updating Form ADV and Policies & Procedures to reflect a testimonial collection process, and reviewing existing content for paraphrase language and adoption issues that could create unintentional exposure.
The Marketing Rule opened a door that was closed for decades. Walking through it without checking the compliance requirements first is how firms end up with findings they didn’t expect.
Citations
- 1. Michael Kitces — Financial Advisor Google Reviews: SEC Marketing Rule Testimonials & Advertisements
- 2. SEC Adopting Release No. IA-5653 — Investment Adviser Marketing (Dec. 2020)
- 3. 17 CFR § 275.206(4)-1 — Investment Adviser Marketing, eCFR
- 4. SEC Division of Examinations Risk Alert — Additional Observations Regarding Advisers’ Compliance with the Advisers Act Marketing Rule (Dec. 2025)