Best AI for AdvisorsWhat are testimonials and endorsements?
Also called: testimonial, endorsement.
Short answer
Under the Marketing Rule, statements about an adviser by current clients (testimonials) or by non-clients (endorsements).
Definition
The Marketing Rule defines a testimonial as a statement by a current client (or private fund investor) about their experience with the adviser or its people, and an endorsement as a similar statement by someone who isn't a current client. Both come with conditions: disclosures about whether the person was paid and about conflicts, oversight by the adviser, and in some cases written agreements.
The definitions are in the rule text (Rule 206(4)-1(e)); use them, not this summary, when a question turns on them.
Why it matters for advisors
AI raises two practical issues. First, AI tools can generate review-style text, and publishing anything that looks like a client statement but isn't one is an untrue statement. The FTC's 2024 Operation AI Comply included a case against a company whose AI tool let customers create fake reviews.
Second, AI-assisted social media monitoring and review-site management can pull testimonials into your marketing. Every one still needs the rule's disclosures and oversight.
Example
An advisor asks an AI assistant to "write three client reviews" for a landing page. The CCO stops it: the firm can only use real statements from real clients, with the required disclosures.
Watch out for
Editing a real testimonial with AI to "polish" it can change its meaning. Keep the original and get approval for any edit.
Related terms
- SEC Marketing RuleRule 206(4)-1 under the Advisers Act, which governs investment adviser advertisements, including AI-written ones.
- Hypothetical performanceUnder the Marketing Rule, performance results not actually achieved by any of the adviser's portfolios, such as backtests and projections.
- AI washingOverstating or misrepresenting how a firm uses AI. The SEC has charged advisers for false AI claims under existing rules.
Learn more
Sources
Not legal or compliance advice. This is a plain-English summary for general education. Rules change and depend on your firm's facts, so check the primary source and talk to your CCO or counsel before relying on it.
Last updated .