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Guidance Update: The SEC Issues New Guidance on Investment Advisors Use of Testimonials via Social Media

The SEC recently issued new guidance concerning investment advisors use of social media, specifically within the context of public commentary appearing on third party “advisor review” websites. Generally, testimonials (statements of a “client’s experience with, or endorsement of, an investment advisor”) are forbidden in investment advisor advertisements because they can implicate false or misleading information to customers. Under the new guidance, however, investment advisors may utilize public commentary from independent third-party social media sites without implicating the concerns underlying the Testimonial Rule. Nonetheless, the SEC imposes certain restrictions. For example, investment advisors cannot compensate an independent social media website to publish or suppress a client comment, and the advisor cannot be involved (directly or indirectly) in the drafting of the commentary. Please see for additional information and let us know if you have any questions.