Texas gives thumbs up for state-registered RIAs to use online reviews

Texas gives thumbs up for state-registered RIAs to use online reviews
The decision fixes a longstanding inequality between local advisors and their federally registered counterparts, according to one advocate.
FEB 21, 2025

The Texas State Securities Board has just approved a change that would allow advisors registered to practice in the Lone Star state to post five-star reviews and positive client testimonials online.

The change reverses a longstanding rule prohibiting state-registered advisors from using testimonials and soliciting reviews. That's in contrast to the SEC's 2020 Marketing Rule, which took effect for federally registered advisors in 2021.

One marketing consultancy focused on wealth firms and advisors painted the decision as a win for approximately 1,400 Texas-based advisors and millions of consumers, who might have previously assumed local state-registered advisors were less capable than their federally registered counterparts based on the absence of positive reviews alone.

In a Thursday statement, Brian Thorp, founder and CEO of Wealthtender, commended the decision, saying it "will ensure Texans can fairly evaluate financial advisors, whether they are Texas small business owners or affiliated with an SEC-registered wealth management firm.”

Consumers value online reviews

Wealthtender pointed to the 2023 BrightLocal Consumer Review Survey, which found that 81 percent of consumers consider online reviews important when making decisions. It also refenced the 2024 Ficomm financial advisor marketing report, which revealed 45 percent of all consumers select their financial advisor based on digital marketing, including 57 percent of individuals under 44.

While around half of US states now allow locally registered advisors to post online reviews, that still leaves an unlevel playing field for smaller advisors in roughly two dozen other states. Wealthtender highlighted California as a particularly vital holdout, with 2,744 state-registered advisors – as counted in the NASAA Investment Adviser Section 2024 Annual Report – unable to leverage client reviews on the web 

“It’s beyond time for the regulators in California and elsewhere to follow in the footsteps of Texas and nearly half the states that have modernized their rules that will ultimately benefit millions of Americans as they prepare to hire financial advisors,” Thorp said.

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