A New Advisor Ranking Is Launching. Here’s What Advisors Should Know

USA Today will publish its inaugural “Best Financial Advisory Firms” list in April 2023, according to the digital news organization. The aim is to publish a guide to the top registered investment advisors (RIAs). The company says that results will be created from an online survey, developed by Statista, a market research firm. Here’s what advisors should know about the upcoming rankings.

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The USA Today Advisor Rankings

USA Today says it aims to compile a list of the firms recommended most by clients and industry peers around the U.S.

For its survey component, the digital media platform encourages clients who seek help from financial advisors to participate. It also encourages advisors working at firms to weigh in. The survey is open between now and Jan. 6. Answers will remain anonymous, USA Today says.

In the survey, clients will be able to give feedback on the firms with which they are familiar. Advisors, however, will be asked to give feedback and recommend other firms. Advisors will then also be asked to nominate peers who can give feedback on their own firms.

Statista adds additional context for RIA participants: “For industry insiders, such as you, our survey relies, among others, on a tested peer-to-peer recommendation approach. In case that you could not accept a certain assignment: Who would you recommend to a potential client?”

What Advisors Should Know

For financial advisors, landing on a top advisor list such as USA Today is preparing can pay off, according to research from the University of Kentucky. In fact, being named a top advisor increases assets under management (AUM) and client accounts for individual advisors and their firms. These effects are magnified for smaller firms and newer advisors, the paper says.

But advisors who are named in such top advisor lists must be careful on how they present their distinction in advertisements. The new Securities and Exchange Commission’s marketing rule, which had its mandatory compliance date on Nov. 4, governs how advisors promote rankings and ratings.

Notably, the marketing rule prohibits the use of third-party ratings in an advertisement  unless the advisor “provides disclosures and satisfies certain criteria pertaining to the preparation of the rating,” according to the SEC.

Such disclosures include the date of the rating, the identity of the third-party rating agency and whether any direct or indirect compensation was given to obtain or use the third-party rating.

Further, disclosures must be as clearly and conspicuously displayed as the third-party rating. That means a claim and relevant disclosures must appear on the same screen, the disclosures must be prominent (in terms of font size and color), there must not be distracting factors, there must be adequate repetition and the language used should be understandable to a reasonable consumer.

The advisor must also have a reasonable basis for believing that the survey made it equally easy to provide positive and negative responses and wasn’t designed to result in a predetermined outcome.

Tips for Growing Your Financial Advisory Business

• Let us be your organic growth partner. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• Expand your radius. SmartAsset’s recent survey shows that many advisors expect to continue meeting with clients remotely following COVID-19. Consider broadening your search. And work with investors who are more comfortable with holding virtual meetings or spacing out in-person meetings.

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