I often get asked why I don’t have client testimonials on my website. The answer is that a fiduciary is not allowed to post testimonials on their website according to SEC rules. As a fiduciary, we must meet the legal requirements established by the SEC or face stiff repercussions. In the case of testimonials, it’s called SEC rule 206(4)-1(a)(1) which states explicitly:
a. It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) of the Act for any investment adviser registered or required to be registered under section 203 of the Act, directly or indirectly, to publish, circulate, or distribute any advertisement: 1. Which refers, directly or indirectly, to any testimonial of any kind concerning the investment adviser or concerning any advice, analysis, report or other service rendered by such investment adviser…
Note the keywords: fraudulent, deceptive, and manipulative
As odd as this may seem in this digital world, where client comments are often used by another prospective client to make a decision on purchasing a product or service, that in the case of fiduciary financial planning, it simply is not allowed. It is allowed in the broker/dealer world of financial product sales. And that is where the confusion comes in. Or perhaps CLARITY! Because if a “financial planner” is posting testimonials, then it’s almost certain that he/she is NOT a fiduciary.
The bottom line is, if you are looking for unbiased or fiduciary financial planning advice, then you will NOT see testimonials on that person’s website.
All things considered, I understand this rule. As a fiduciary, we are obligated to provide “best interest” advice to each INDIVIDUAL. By definition, then, the advice a fiduciary gives will almost certainly be different from individual to individual, as everyone is different and has different financial circumstances. Carrying that thought forward then, if a client is super happy with our service, it is highly dependent on that individual and may not be applicable to any other individual. The SEC rule is stating that it is fraudulent, deceptive and manipulative to market a testimonial of a positive experience that may not be duplicated for any other individual. That actually makes sense.
About Kastler Financial Planning
We are a fiduciary, fee-only, and independent financial consultancy firm. Our core purpose is to improve the financial life for each and every client we serve. Our vision is that people have access to affordable and professional fiduciary financial planning, retirement planning, and investment management services, without the pressure or bias of product sales or commissions.
We specialize in fee-only Financial Planning services for young to mid-career families, Retirement Planning for those at or near retirement, Small Business Retirement Plan Consulting for small business owners, and Investment Management Services. We perform these services either as hourly, a one-time fee-only project, as on-going financial planning, or Assets Under Management (AUM), depending on your needs.
Whether you live in our backyard or across the country, we aim for a pleasant client experience through our Client Portal and computer screen-sharing technology.
If you have any question on how our services may apply to you, please contact us at the number below or submit an email through our Contact Us form.
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Kastler Financial Planning | Clarkston, MI 48346