Is a "like' a testimonial?
G
uest blogger Kristen Luke's recent post on how a new five-star ratings system Facebook is testing for business pages could mean compliance trouble for advisers touched off a conversation among readers and the author about testimonials and how regulators might view the new ratings.
“I think it is a combination of two opposite forces. One — most definitely — testimonials remain off the board as a capability (in step as well with Michael Kitces' analysis on reviews). However, a second force that continues to emerge is that the regulations will ultimately have to evolve and flex due to the disruptive nature of communications on social media versus any previous electronic communications. I do think simply disabling this feature resolves any immediate risks, much like we counsel folks to do on their LinkedIn profiles.” — Blane Warrene
“It wouldn't surprise me if the regulators eventually change their position regarding testimonials because of the shift in online consumer behavior. Testimonials are no longer a black-and-white issue, as there is a lot of gray area (for example, is "liking' a Facebook page an endorsement when it is the only way to subscribe to the page?). Hopefully, the SEC and Finra will address this issue sooner rather than later. Until then, turning off all functions that could be construed as a testimonial is the only safe answer.” — Kristen Luke
“It would be nice if at least they show how many people have rated the place and also if they make it mandatory to provide some kind of feedback in order to improve if required. Just a click, and that is it? Not sure that is helpful or fair.”
— Pedro Santiago
“This ratings system will show up if you classified your Facebook page as a "place,' but there are ways around that. However, it does impact local discoverability. All the more reason to build your brand on your hub that you own and control! Right?”
— Stephanie Sammons
“That's one of the problems of social media: You have no control. I agree that you should build your own marketing hub, but you still need to use social media to get people there.”
— Kristen Luke
“Agreed. Leveraging social media for visibility and traffic is key, but it's definitely becoming a pay-to-play game out there.” — Stephanie Sammons
Go to InvestmentNews.com/fbstar to read the post and comments.
