Yes Financial Advisors Can Accept Endorsements on LinkedIn (But They Shouldn’t)

I am frequently asked by my financial advisor clients something that bothers them all:

Am I able to accept endorsements on LinkedIn?

First and foremost, your compliance department should be asked.

And most compliance departments will say no to endorsements, and will cite SEC Rule 206(4)1: Advertisements by Investment Advisors:

It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) of the Act for any investment adviser registered or required to be registered under section 203 of the Act, directly or indirectly, to publish, circulate, or distribute any advertisement: (1) Which refers, directly or indirectly, to any testimonial of any kind concerning the investment adviser or concerning any advice, analysis, report or other service rendered by such investment adviser.

If you really read this regulation closely, you can infer you are able to have endorsements on your LinkedIn profile – as long as they are not from a client or related to the financial services industry and your ability to manage anyone’s money.

In a release last year about social media, the SEC added: “The term “testimonial” is not defined in Rule 206(4)-1(a)(1), but SEC staff consistently interprets that term to include a statement of a client’s experience with, or endorsement of, an investment adviser.”

3 Reasons Why You Shouldn’t Accept Endorsements on LinkedIn

Do you want your profile under the compliance and rule makers microscope? Adding endorsements to your profile for non-investment things by non-clients is just inviting the scrutiny of the rule makers (FINRA and SEC). Not to mention, what happens if the person who wants to write you an endorsement suddenly becomes a client? Are you going to remember to remove their endorsement? Doubtful.

Does an endorsement in something unrelated to your job make you look better at your job? Have you ever had a client or prospect say “I selected you to manage my money because I saw you’re really good at tiddlywinks and checkers on LinkedIn?” I didn’t think so.

Third, if you have no endorsements displayed on LinkedIn, and most of the other ethical financial professionals you (and your clients) know don’t have endorsements displayed, does this really make a difference in selecting you? Again, I doubt it.

Alternatives to LinkedIn Endorsements

What can you do instead of getting an endorsement on LinkedIn? I think there are 2 things that can work particularly effectively.

Put on your profile that you the financial services industry does not allow relevant endorsements, so you won’t be displaying any endorsements. A simple statement like “My industry does not allow relevant endorsements to be displayed on LinkedIn” is enough for most people to understand why you don’t have any endorsements.

Respond to endorsements with a personal note. If one of your clients, former clients, co-workers, friends or enemies endorses you, send them a personal message. Thank them for the endorsement – and let them know you don’t display endorsements because you are in the financial services industry. Invite them to come into your office if they have questions. Who knows – this could even lead to a new client or a deepened relationship as you get to explain your philosophy to them and explain that you are taking the ethical high road on this decision.

That’s why I think financial advisors should not accept endorsements on LinkedIn.