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Advisor Review Sites Not Viable

Responding to an inquiry from a reader, Michael Kitces details the reasons why there will never be websites that review advisors like there are for restaurants. Advisors are always looking for third-party endorsements, whether from the press or even lists of the “top advisors,” but even those lists have problems if the advisor is required to pay to play.

So why isn’t an advisor review site viable?

• Small sampling — Kitces estimates that at best, 1-2% of patrons take the time to write a review. Extrapolate that for advisors and the numbers are not sufficient to produce a statistically viable sample.
• By law, advisors can’t actively promote reviews — making the sampling even smaller.
• Also by law, clients can’t be directed to the site.
• It’s difficult for an advisor to pay to be on review sites since that would violate the rules on testimonials.

Referrals are key, as is third-party endorsement, but advisors living in a heavily regulated world regarding advertising have limited options. Review sites are not one of them.

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