Last week’s launch of WWW (Wendy’s Wednesday Whimsy) was some fun. And it quickly generated an idea for this week’s post, when one U.S. adviser commented: “I noticed that [the] site includes testimonials, which is verboten here. Lucky him.”

Lucky indeed. Advisers who are based abroad may not know that U.S. Registered Investment Advisor representatives are strictly prohibited from including client testimonials in their advertising (website included). Thou shalt not testimonial is set in regulatory stone here; woe be unto the adviser who violates this commandment.

Flip that around, and many U.S. advisors may not realize that our prohibition on client  testimonials is not universal. In Canada and the U.K. (at least), they are A-Okay.

For those who may be scratching their head over the logic of our ways, here is my take on the reasoning behind it:

Of course, advisors are going to share only positive testimonials; of course, they are going to keep any negative feedback under wraps. To prevent investors from being bamboozled by the unmitigated enthusiasm of carefully selected, happy-shiny clients, testimonials are effectively banned entirely in the U.S.

In other markets, I’m assuming the logic goes more like this:

Of course, advisors are going to share only positive testimonials; of course, they are going to keep any negative feedback under wraps. But investors aren’t addled. Everyone knows this and can consider testimonials with the grain of salt they deserve.

Who is right? My vote is with the global view. Just as everyone knows that Brad Pitt and Angelina Jolie look much better in the movies than when they roll out of bed in real life (hair askew, bleary-eyed like the rest of us), we all know that testimonials represent a service provider’s best face forward. It’s an even playing field, in which everyone can consider or ignore valid testimonials in a relatively informed and appropriate context.

Contrast that to opaque fees, conflicted interests and complex products, in which the pros have a large and decidedly unfair edge. They know way more than a typical investor possibly could about what’s really going on behind the scenes. It seems to me that these are the issues of transparency on which our overworked and underpaid regulators should be free to spend the lion’s share of their disciplinary efforts.

So what if happy clients say that they think their advisor is great? It’s a free country. Or at least I think it should be.

PS: I am NOT recommending that U.S. advisers begin publishing testimonials on my say so. And, no, I will not visit you in jail if you do.