What Are Testimonials and Endorsements Under the Marketing Rule?

Before 2021, RIAs were generally barred from using client testimonials in advertising at all. The Marketing Rule reversed that position, permitting testimonials and endorsements under a defined set of conditions: clear disclosure of whether the person is a client, whether they were compensated, and any material conflicts of interest. Compensated endorsers above certain thresholds trigger additional written agreement and oversight requirements.

Firms need a documented process for collecting, reviewing, and disclosing these statements — a casual client quote pulled from an email, without proper disclosure, can create a compliance problem even if the sentiment is genuine.