What are testimonials?

Testimonials are statements made by customers, clients or other individuals who have used a product or service, usually in a positive manner, to support their endorsement of the product or service. In the context of securities marketing, testimonials can be used to promote investment products and services, and are subject to regulation by the U.S. Securities and Exchange Commission (SEC).

The SEC has rules in place to regulate the use of testimonials in securities marketing. These rules are designed to protect investors from being misled by false or misleading statements, and to ensure that investment promotions are fair, balanced, and not misleading.

Under SEC rules, testimonials must be representative of the typical experience of investors and must not be cherry-picked or otherwise manipulated to present a misleading picture of the potential benefits of an investment. Additionally, any compensation or incentives that are provided to individuals for making testimonials must be disclosed.

In general, the use of testimonials in securities marketing is restricted, and companies must be careful to comply with SEC rules when using this form of promotion. Firms must ensure that any testimonials they use are truthful, not misleading, and fully disclose any compensation or incentives that have been provided in exchange for the testimonial.

Hearsay can help you remain compliant with testimonials by asking you to review and confirm them before they get shared to your Facebook Business Page or LinkedIn profile.

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