Series 7 practice questionhardCommunications with the Public (Retail and Institutional) — Testimonials and Endorsements
A broker-dealer creates a testimonial video featuring a retail client who discusses her positive experience with a new investment product. The video is posted on the firm's website and distributed via email to 60 retail clients. According to FINRA regulations, which additional disclosure is REQUIRED?
- AA list of all clients who have used the product, for comparison purposes.
- BNo disclosure is required as long as the testimonial is genuine.
- CA disclosure of the client's full name, address, and account history.
- DA written statement that testimonials may not be representative of the experience of other clients, and that past performance does not guarantee future results.✓ Correct answer
Explanation
Why D — A written statement that testimonials may not be representative of the experience of other clients, and that past performance does not guarantee future results.
FINRA requires that if a testimonial is used in retail communications, it must state that the experience may not be representative and that past performance does not guarantee future results; disclosures of personal information or lists of clients are not required.
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