Testimonials and endorsements compliance

To meet the testimonials and endorsements compliance requirement, you must identify every testimonial/endorsement used in advertising, determine whether the speaker is compensated (cash or non-cash), and ensure required disclosures are made and retained with records that prove the relationship and substantiation. Build a repeatable intake, approval, and recordkeeping workflow tied to SEC adviser advertising and books-and-records rules. (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

Key takeaways:

• Treat testimonials/endorsements as a governed advertising category with documented approvals and disclosures. (17 CFR 275.206(4)-1)
• Maintain an inventory of promoters, compensation, conflicts, and where each statement is used, plus supporting records. (17 CFR 275.204-2)
• Operationalize with a pre-use review, standardized disclosure language, and a retention package per asset/channel. (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

Testimonials and endorsements are high-risk marketing content because they combine performance implications, third-party influence, and conflicts of interest. For a Compliance Officer, the fastest path to control is to stop treating them as “marketing collateral” and start treating them as a governed advertising workflow with clear intake questions, mandatory disclosures, and tight recordkeeping.

This requirement page focuses on one operational outcome: every testimonial or endorsement your firm disseminates can be traced to (1) who said it, (2) whether they were compensated directly or indirectly, (3) what disclosures were presented to the audience, (4) why the content is not misleading in context, and (5) what records you can produce during an SEC exam to prove all of the above. (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

You will see the most value if you implement this as a lightweight control system: a promoter/endorser register, a content-level disclosure checklist, and a record retention “packet” for each asset (webpage, social post, pitch deck, email campaign, video, podcast appearance). The goal is audit-ready evidence without slowing the business. (17 CFR 275.204-2)

Regulatory text

Regulatory excerpt (provided): “Govern testimonials/endorsements under compensation and disclosure conditions.” (17 CFR 275.206(4)-1)

What this means for an operator You must implement controls so that testimonials and endorsements used in adviser advertising are handled under defined conditions tied to compensation and disclosure. Practically, your workflow must answer, document, and evidence these questions before content goes live:

• Is this statement a testimonial or endorsement in the context of adviser advertising?
• Did the speaker receive compensation (including non-cash benefits) or have a material conflict tied to the statement?
• Were disclosures presented clearly and consistently wherever the statement appears?
• Do your books and records show the relationship, approvals, and final disseminated version? (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

Plain-English interpretation (requirement-level)

Requirement: If you publish or disseminate testimonials or endorsements, you must (a) identify and govern them as a special advertising type, (b) track compensation and conflicts tied to the promoter/endorser, (c) provide required disclosures wherever the statement is used, and (d) retain records that prove review, approval, and dissemination details. (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

Who it applies to

Entity scope

• Registered Investment Advisers and their supervised persons engaged in advertising activities. (17 CFR 275.206(4)-1)

Operational scope (where this shows up)

• Firm website testimonials page, case studies with client quotes, “review” widgets, and third-party ratings displayed as social proof.
• Social media posts (organic and paid) that include client/influencer statements.
• Paid promoter programs, referral arrangements, affiliate marketing, lead-gen partnerships, and influencer sponsorships.
• Pitch decks, one-pagers, RFP responses, and email campaigns containing quotes or endorsements.
• Podcasts, webinars, conferences, and PR where a third party praises the firm and the content is reused later. (17 CFR 275.206(4)-1)

What you actually need to do (step-by-step)

Step 1: Define what counts (and force a yes/no decision)

Create a short internal decision checklist for marketers and relationship managers:

1. Does the content include a statement of support, praise, or recommendation about the adviser or its personnel?
2. Is the speaker a client, investor, prospect, influencer, solicitor, or other third party?
3. Will the statement be disseminated by the firm (including reposting, embedding, or quoting)?
   If “yes,” route it into the testimonial/endorsement workflow. (17 CFR 275.206(4)-1)

Control tip: Require the business owner to tag the asset at creation as “testimonial/endorsement: yes/no,” with Compliance able to override.

Step 2: Capture promoter/endorser details at intake

For each testimonial/endorsement, collect and store:

• Speaker identity and role (client vs non-client; individual vs entity).
• Relationship to the adviser (customer, investor, employee, affiliate, third party).
• Compensation: cash, fee credits, gifts, discounts, free services, event access, or other benefits connected to the statement.
• Other conflicts: ownership interests, referral arrangements, or contractual obligations to promote. (17 CFR 275.206(4)-1)

Artifact: “Promoter/Endorser Intake Form” completed before review.

Step 3: Standardize disclosures and map them to channels

Build a disclosure library that marketing can paste into common formats:

• Website module disclosure (short + expandable).
• Social disclosure (tight format; link to full disclosure page when needed).
• Video/audio disclosure (on-screen and spoken where applicable).
• Slide deck disclosure (on-slide and/or appendix). (17 CFR 275.206(4)-1)

Then create a channel mapping table so reviewers know where disclosures must appear for each channel type and how you will ensure they are “carried through” when content is republished or excerpted.

Operational rule: If a quote can be separated from its disclosure by normal sharing behavior (screenshots, reposts, excerpts), redesign the layout so the disclosure travels with the claim or the quote is not used.

Step 4: Pre-use Compliance review with a tight checklist

Run every testimonial/endorsement through a review checklist that covers:

• Compensation/conflict disclosure present and tailored to the specific arrangement. (17 CFR 275.206(4)-1)
• Not misleading in context: no cherry-picked implication that “this is typical” unless you can support the overall impression; no omission of conditions that change meaning.
• Substantiation file exists for any adjacent objective claim (for example, “reduced volatility,” “beat benchmarks,” “tax savings”) even if the quote is subjective.
• Final format review: confirm disclosures display properly on mobile, in dark mode, in the ad preview, and in any syndication widget. (17 CFR 275.206(4)-1)

Practical hangup: Most issues are formatting problems (disclosure not visible) and reuse problems (quote gets copied into a new context without the original disclosure).

Step 5: Control publication and monitor drift

Implement a “publish gate”:

• Only approved versions can be posted (CMS permissions, social scheduler approvals, locked slide decks).
• Any edit to a testimonial/endorsement triggers re-review because edits can change meaning.
• Periodically re-check live placements, especially third-party widgets and review platforms, to confirm disclosures still display as approved. (17 CFR 275.206(4)-1)

Step 6: Recordkeeping package per asset (exam-ready)

For each disseminated testimonial/endorsement, retain a single folder or case record that includes:

• The intake form and compensation/conflict assessment.
• The written agreement, if any, with the promoter/endorser or related third party.
• The final approved creative (screenshots, PDFs, video files) and the exact disclosure shown.
• Evidence of dissemination: URLs, post IDs, ad platform preview exports, email send proofs, or web archive captures.
• Approval evidence: ticket, email approval, or GRC workflow log showing who approved and when. These records support your ability to produce required books and records during an exam. (17 CFR 275.204-2)

Required evidence and artifacts to retain

Use this as your minimum evidence list (extend based on your channels):

Artifact	Purpose	Owner
Promoter/Endorser Register (inventory)	Shows complete population and relationships	Compliance
Intake form per testimonial/endorsement	Captures who/what/compensation/conflicts	Marketing + Compliance
Disclosure library + channel mapping	Proves standard approach and consistency	Compliance
Approval workflow record	Proves pre-use review and sign-off	Compliance
Final disseminated copy + screenshot/recording	Proves what the public saw	Marketing
Promoter agreements and payment records (if applicable)	Proves compensation terms and conflicts	Finance + Legal/Compliance
Substantiation file for adjacent objective claims	Defends against “misleading” findings	Marketing + Investment team
Retention schedule and retention logs	Shows books-and-records discipline	Compliance/Records

Tie retention to your adviser books-and-records obligations. (17 CFR 275.204-2)

Common exam/audit questions and hangups

Expect examiners/auditors to probe these areas:

• “Show me all testimonials and endorsements currently in use, across every channel.” (17 CFR 275.204-2)
• “Which ones involved compensation, and how did you disclose it?” (17 CFR 275.206(4)-1)
• “How do you prevent a social post from being reused without disclosures?” (17 CFR 275.206(4)-1)
• “Produce the final as-disseminated version and the approval evidence.” (17 CFR 275.204-2)
• “Who is responsible for monitoring third-party widgets/review platforms?” (17 CFR 275.206(4)-1)

Hangup to plan for: teams often cannot prove completeness (they show a few examples, not the full population). Your register is the answer. (17 CFR 275.204-2)

Frequent implementation mistakes (and how to avoid them)

1. Treating “non-cash” benefits as not compensation. Fix: intake form forces business owners to list anything of value provided in connection with the statement. (17 CFR 275.206(4)-1)
2. Disclosures exist, but not where the quote actually appears. Fix: channel mapping plus final-format proof review before publishing. (17 CFR 275.206(4)-1)
3. No evidence of the as-disseminated content. Fix: require a screenshot/video capture at time of posting and store it with approvals. (17 CFR 275.204-2)
4. Quote reuse without re-review. Fix: unique content IDs and a rule that any new placement triggers review, even if the text is unchanged. (17 CFR 275.206(4)-1)
5. Incomplete inventory because ownership is unclear. Fix: assign one control owner in Compliance and one operational owner in Marketing; both must sign off on the register periodically. (17 CFR 275.204-2)

Enforcement context and risk implications (qualitative)

No public enforcement cases were provided in the supplied source catalog, so this page does not summarize specific matters. Your practical risk is still clear: testimonials and endorsements can create misleading impressions and undisclosed conflicts, and weak recordkeeping makes it hard to defend what was shown and approved. Controls that produce complete inventories and as-disseminated evidence reduce exam friction and reduce the chance that issues become findings. (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

Practical execution plan (phased, operator-friendly)

Immediate phase: stop uncontrolled publication

• Freeze new testimonials/endorsements until routed through a single intake and approval path.
• Stand up a simple register (spreadsheet is fine) that lists every known placement and owner.
• Add CMS/social scheduler permissioning so only approved users can publish these assets. (17 CFR 275.206(4)-1)

Near-term phase: make it repeatable

• Build the standardized intake form and review checklist.
• Publish the disclosure library and the channel mapping table.
• Implement a recordkeeping packet template and train Marketing to save “final as-seen” evidence at posting. (17 CFR 275.204-2)

Ongoing phase: prove it works

• Run periodic spot checks of live placements and compare to the register.
• Sample records for completeness: agreement/compensation info, disclosure proof, approval evidence, dissemination capture.
• Add third-party oversight where a third party hosts or displays reviews (widgets, platforms, affiliates). (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

Where Daydream fits (without adding process bloat)

If you are tracking testimonials/endorsements across many channels and third parties, Daydream can house the promoter/endorser register, route intake and approvals, and attach the required evidence (agreements, screenshots, disclosures) into a single exam-ready record per asset. That structure helps you answer completeness and recordkeeping questions quickly. (17 CFR 275.204-2)

Frequently Asked Questions

Does a client quote on our website count if we didn’t pay the client?

It can still be a testimonial/endorsement in advertising context, so route it through the workflow and confirm what disclosures are required for the specific facts. Record the relationship and the as-disseminated page evidence. (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

What counts as “compensation” for an endorsement?

Treat compensation broadly at intake, including non-cash benefits connected to the statement, then document what was provided and how you disclosed it. Keep the underlying agreement or business records that show the arrangement. (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

We repost positive comments from social media. Do we need to do anything?

Yes, treat reposts as dissemination of an endorsement/testimonial, and ensure disclosures travel with the repost in the format viewers will actually see. Save a screenshot of the final post and the disclosure placement. (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

Can Marketing self-approve testimonials if they use a standard disclaimer?

You can standardize disclosures, but you still need a control that verifies compensation/conflicts and confirms the final presentation is not misleading in context. Keep approval evidence tied to the specific asset and placement. (17 CFR 275.206(4)-1) (17 CFR 275.204-2)

What records do examiners usually ask for first?

They typically start with “show me everything you’re using” and then request the as-disseminated version plus proof of review and disclosure for a sample. Your register and per-asset record packets make that request routine. (17 CFR 275.204-2)

How do we handle third-party review platforms or embedded widgets?

Treat the platform as a third party affecting your advertising presentation, test how disclosures render, and monitor for changes over time. Retain evidence of what the widget showed and your oversight actions. (17 CFR 275.206(4)-1) (17 CFR 275.204-2)