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How to Leverage SEC’s ‘Game-Changing’ New Ad Rule

This article by Jane Wollman Rusoff first appeared on ThinkAdvisor on February 22, 2021, and can be found here

The new Securities and Exchange Commission rule letting RIAs use client testimonials for marketing is “game-changing,” digital marketing expert Samantha Russell tells ThinkAdvisor in an interview.

The Investment Adviser Marketing Rule goes into effect May 4.

The chief evangelist of FMG Suite and the recently acquired Twenty Over Ten recommends, however, that RIAs take a wait-and-see approach before rushing to try the long-prohibited marketing tack. Let the bigger firms test the waters first, she cautions.

The day Joe Biden was inaugurated as president, the new administration ordered an immediate freeze on pending regulation across the board. However, it’s not yet clear whether rules that the SEC approved but are not yet effective will be delayed.

Formerly chief marketing and business development officer at Twenty Over Ten from its inception, Russell and the firm’s staff of 30 now reside under the FMG Suite umbrella. The SaaS (software as a service) company acquired Twenty Over Ten last December.

Russell, 34, has been an industry force of nature since Twenty Over Ten’s 2017 launch. She seeks to convert reluctant advisors to use digital technology for marketing their practices with tools that provide full regulatory compliance.

A frequent industry speaker, she herself is a ubiquitous online presence recommending marketing approaches to help FAs grow via social media and other tech tacks.

Russell has been widely praised for serving up actionable techniques to smaller advisors who for years have hesitated to employ digital technology and social media for growth.

In the interview, she sends FAs a crisp message: “Get on video!” That will enable them to benefit from the psychological “mirror-exposure effect,” which generates an affinity for things and individuals the more often one sees them.

Russell also discusses advisor growth opportunities such as emailing custom content based on online viewing habits, a technique she calls hyper-personalization powered by automation.

From the start, Twenty Over Ten’s goal has been to develop compliant digital marketing strategies for smaller advisors to grow their firms. FMG Suite, a former competitor based in San Diego, specializes in marketing software for FAs and insurance agents.

Before joining Twenty Over Ten — co-founded by Ryan Russell, to whom Samantha is married — the Cleveland native was executive director of the nonprofit Kevin Dare Foundation after working for Pennsylvania State University in fundraising and event planning.

In the interview, she gives do’s and don’ts for applying the forthcoming SEC rule.

ThinkAdvisor recently held a phone interview with Russell, who was speaking from State College, Pennsylvania, Twenty Over Ten’s headquarters. Among other digital topics, she discussed proven strategies for reaching clients amid the pandemic, including live online Q&A events on crucial topics. She also argued that charging clients using a subscription series now can mean managing hefty 401(k) assets later.

Here are highlights of our interview:

TA - Your new title is chief evangelist. What makes it apt?

SR - It’s a great fit for my role, which is to help advisors understand they have the power to market their firms. There’s been such an acceleration in the shift to digital marketing. My role is to help advisors use it to grow.

TA - What’s your view on the new SEC rule that will allow RIAs to use client testimonials in their marketing?

SR - It’s really game-changing. Clients [and prospects] will be able to go online and read reviews of advisors. That hasn’t been available for financial services before. The rule will make it incredibly easy for advisors to get reviews and testimonials from clients, then use them in their marketing to show others there are consumers who have worked with them and had a great experience. The advisors that provide the most value will be able to reap the benefit of that social proof [influence of others].

TA - But the Biden administration has frozen the rule. Why is that?

SR - Lawyers tell me that it will eventually make its way to the Federal Register and go into effect a few days after that — hopefully, in the next quarter or two. When the Biden administration came into office, they put a freeze on any legislation in many [areas] that were pending [in order to] review it. It isn’t a targeted freeze on this particular rule.

TA - When it does go into effect, advisor reviews will be permitted to appear on Yelp, Google, Trustpilot and other sites. Then the FAs will be able to post the favorable ones on their website, correct?

SR - Yes. Advisors aren’t in control of the reviews on those third-party collection sites; but with the clients’ permission, they can republish on their own websites.

TA - Will advisors be able to ask a particular client to write a testimonial so they can post those too?

SR - No. You won’t be [allowed] to just ask a client who has great things to say about you to provide a testimonial. You’d need to send an email to all your clients and say, “I’d love for you to give me some feedback.” The SEC is going to look for documentation that you made it possible for anyone to give you a review, whether it’s good or bad.

TA - What other caveats are there?

SR - There are a lot of interesting legal asterisks. For instance, because people can leave either good or bad reviews on a third-party site if you republish [good] reviews on your website, you need to have a disclaimer that says something like, “These are not all the reviews. You can find them by going ‘here’ [hyperlink"]. But advisors will now be able to have a little more [leverage] over responding to a negative review and sharing their side of the story, which is important.

TA - Any further advice regarding the rule?

SR - Advisors might want to seek outside counsel or home-office counsel to make sure they’re in compliance with any new marketing initiatives because there are lots of things you need to do in terms of disclaimers. Law firms I’ve talked to say that if you’re a smaller firm, you wouldn’t want to be a guinea pig. There are gray areas — a lot of the rule is ambiguous. So they suggest taking a wait-and-see [position] because the biggest firms with the deep pockets will be the first.

TA - Ambiguity isn’t unusual for SEC rules, is it?

SR - This one is different from anything they’ve allowed before. So I think a lot of advisors will want to see what everybody else is doing because no one wants to be the person who, maybe, goes a little too progressive and ends up getting a big fine.

TA - Amid the pandemic, what marketing strategies have you recommended for advisors that are different from pre-pandemic approaches?

SR - One of the top ones for advisors that used to rely heavily on client events and seminars is to try to hold as many events as they can online and come up with new ways to make them fun.

TA - What are some examples?

SR - Two very successful ones have been to hold live Q&As about the changes concerning IRA minimum distributions [RMDs] and the Paycheck Protection Program. There were so many questions about what companies could qualify for PPP [loans] and all the ins and outs.

TA - What else have you suggested to advisors?

SR - Get on video! So much of communication is nonverbal. By seeing you on camera, [FAs can benefit from] the psychological principle of the “mere-exposure effect.” That tells us the more often we see something, the more likely we feel familiar with it or like it. Recording videos and putting them online gives you the opportunity to get in front of people who are scrolling social media.

TA - What’s another good opportunity?

SR - When writing an email to clients, don’t just say, “Here are three articles you should read this week.” Say something like “I’m sitting here, closed off in my upstairs bedroom while my kids are running around downstairs: Day 7 of quarantine.” So lift the curtain a bit. If you pepper in those types of things with your digital presence, people will feel they know and like you more.

TA - Another approach you suggest is for advisors to offer a subscription-based series. Why is that advantageous?

SR - For a long time, advisors would ignore people in their 30s and 40s because if they’re not going to transfer those 401(k) balances [low because of youth], they have no way to earn income from the relationship. But that age group desperately needs financial advice. The subscription-based model allows advisors to serve all those folks — plus many even in their 50s — by working with them on a monthly basis.

TA - What do these people need help with?

SR - Budgeting, planning, thinking about retirement. Then, when they’re ready to retire and need to move those assets over, you’re already that trusted person they’ve been working with — and it’s a very smooth transition.

TA - Another technique you point out is hyper-personalization powered by automation. What’s that?

SR - Emailing custom content based on someone’s [online] viewing habits. We have the ability to help advisors identify which emails people are opening. Based on that, you can send tailored emails about what you know they’re interested in.

TA - But that seems like spying, many say. What’s your response?

SR - Certainly that’s been part of the conversation. But if you land on someone’s website, they don’t know it’s you. We don’t look at a list and say, “Here are all the people that landed on this website.” But people who feel it’s a breach of privacy can always turn on privacy settings.

TA - Another idea you present is to embrace inclusivity. Why is that an opportunity?

SR - Investment brands and others are being held accountable to make sure their marketing is diverse and inclusive across racial, gender and sexual orientation lines. If you want to target an audience that’s diverse, your marketing needs to be diverse.

TA - What was FMG Suite looking for when they acquired Twenty Over Ten?

SR - We were competitors for a long time in providing advisors digital marketing tools to allow them to market their businesses better and to automate some time-consuming processes that can make marketing more difficult. Twenty Over Ten had a strong foothold in the independent RIA space; FMG Suite was drawn to that because they were more in the independent broker-dealer space. But [beyond] that, it was the product that Twenty Over Ten sold.

TA - How is that showing up in the merged company?

SR - There’s synergy as we plan new products. We just launched one called Lead Pilot, which is using content marketing to drive leads for advisory businesses.

TA - You have a degree in organizational communication (public relations). Please describe your career path.

SR - Out of college [Miami University] I took a job at Penn State University doing fundraising and event planning. My husband, Ryan Russell, is a co-founder of Twenty Over Ten. They saw that most small advisors had really terrible websites, no social media presence, their marketing was nonexistent — and they faced compliance hurdles. So they decided to build a tool that would allow advisors to reap the rewards of all the great new marketing technology and still be compliant.

TA - When did you enter the picture?

SR - They went to market in 2017 [after beta stage] and brought me on as employee number one. I started from a sales perspective. But when you’re selling marketing solutions, you need to practice what you preach by utilizing the same solutions and strategies. That’s what I put into practice for our company: creating content, using social media, creating videos. I was adamant about being alongside our customer base and potential customers to say, “Let’s all learn how to do this marketing together.”

TA - What’s most gratifying about your job?

SR - It’s been great to see advisors go from, “This isn’t going to do anything. I’m not going to get [clients] from my website” to emailing me saying, “You won’t believe it! Somebody found my website on Google. I have a meeting with them, and he has $10 million to invest!” This is what makes me so happy.