How do MSRB rules regulate advertising and use of testimonials?

• A. They prohibit deceptive or unsubstantiated claims and require disclosures if testimonials are used
• B. Testimonials are prohibited outright
• C. Disclosures are optional when testimonials are used
• D. Only testimonials from institutional investors can be used

Answer: (A)

The main idea is that MSRB advertising rules require communications to be truthful and not misleading, and they add safeguards when testimonials are used. In practice, this means ads must not make deceptive or unsubstantiated claims about investment results or capabilities. If a testimonial appears in an advertisement, disclosures must accompany it to prevent a misleading impression: the testimonial should be clearly identified as the opinion of the individual, it should note that it may not be representative of others’ experiences, and it should indicate whether any compensation was provided for the testimonial. It’s not a blanket ban on testimonials, and disclosures aren’t optional. There’s no restriction that testimonials can come only from institutional investors; they can come from clients generally, as long as the required disclosures accompany them.