Series 7 practice questionmediumMarketing and Prospecting — Use of Testimonials
A representative wants to include a testimonial from a satisfied client in a marketing brochure. Which statement accurately reflects the regulatory requirements?
- ATestimonials are allowed only for institutional investors.
- BTestimonials may only be used in internal communications.
- CTestimonials are prohibited in all broker-dealer advertisements.
- DTestimonials may be used if the fact that the client was compensated is disclosed.✓ Correct answer
Explanation
Why D — Testimonials may be used if the fact that the client was compensated is disclosed.
FINRA permits the use of testimonials in public communications if any compensation paid for the testimonial is clearly disclosed.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 758+ Series 7 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Seeks Business for the Broker-Dealer questions
- A representative obtains a list of potential prospects from a third-party data vendor. Which regulatory requirement…
- A representative wants to use past performance data in a marketing email. Which is required for compliance?
- A registered representative is preparing a cold calling campaign. She obtains a purchased list with 1,200 names, 100 of…
- A prospective client contacts a registered representative via email requesting more information about municipal bonds.…
- A broker-dealer's registered rep plans to use both personal and firm-approved social media accounts for prospecting.…
- If a prospect asks not to be called again, what must the broker-dealer do?
- A registered rep wants to pay a $500 referral fee to a friend for introducing three prospects. Which of the following…
- A representative is hosting a seminar to attract new clients. Which of the following is correct regarding seminar…