Alabama has become the latest state to update its advisor marketing policy to more closely align with SEC standards, opening the door for state-registered RIAs to use client testimonials and online reviews in their advertising.
The Alabama Securities Commission adopted its new policy earlier this month, replacing previous advisor marketing policies that were in place since 1990. The SEC began allowing federally-registered RIAs to promote online reviews and client testimonials in 2021, and roughly half of U.S. states passed rules to allow state-registered advisors to do the same.
To register with the SEC, RIAs must have at least $100 million in assets under management. Alabama’s marketing rule update is a win for smaller advisors registered with the state, such as Chad Holmes, who operates his solo-RIA Formula Wealth out of his home in Alabama.
“I'd say it's been unfair for small businesses,” Homes told InvestmentNews. “We were not able to have any sort of testimonials out there, which is unfair seeing as how for the last four years, big firms that are federally registered with the SEC, they can have testimonials.”
Formula Wealth focuses on multi-generation family wealth and estate planning, managing about $40 million from clients. Holmes plans to leverage client feedback left for him on advisor review marketplace Wealthtender.
“I'm looking forward to having people leave honest reviews of their experience in working with me,” said Holmes. “People out there exploring should I work with this stranger I've never heard of, or should I go with this other firm who has a bunch of reviews, they can at least read a little bit into what it's like working with me. So it levels the playing field.”
Mississippi and Arizona are expected to be the next states to modernize their advisor marketing rules within the first half of 2026, Wealthtender CEO and founder Brian Thorp told InvestmentNews. About 20 states still ban the use of customer testimonials and online reviews in advertising. Those states include California, Pennsylvania, Illinois, Maryland, Connecticut, and Kansas, according to Wealthtender’s map.
"For too long, Alabama's state-registered advisors, many who have served multiple generations of local families, have operated with one hand tied behind their backs,” said Thorp. “[This] rule change means these small business owners can finally let their clients' voices be heard, to help residents interested in their services make more informed and educated hiring decisions."
Alabama's decision comes after the North American Securities Administrators Association (NASAA) announced its support in July for state governments to update their rules to more closely align the SEC’s advisor advertising standards.
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