The SEC has made clear that Marketing Rule compliance is a priority, and that advisor advertising will be examined, with real penalties for firms that fall short.
For investment advisors and RIAs, this means updating policies to the current rule, training front‑office teams, and testing real‑world scenarios involving performance and testimonials. This guide explains the main pressure points, recent enforcement trends, and practical steps to keep your marketing aligned.
The SEC Marketing Rule replaced the 1961 advertising rule and the 1979 cash‑solicitation rule with a single framework for advisor marketing. It applies to advisors that are registered or required to register with the SEC.
The rule became effective May 4, 2021, with a compliance deadline of November 4, 2022. At the same time, the SEC updated related requirements to align firm policies and disclosures with the new rule, instead of older advertising guidance.
Key companion changes include:
These changes let examiners compare your written policies, ADV disclosures, and actual marketing materials more easily.
The SEC Marketing Rule uses a “two‑prong” definition of advertisement. This definition matters because it determines when the rule’s anti‑fraud and disclosure standards apply.
Under the first prong, an advertisement is any direct or indirect communication that offers advisory services to prospects or new services to current clients or private fund investors. Limited exclusions cover most one‑on‑one communications, live oral conversations, and required regulatory filings.
A one‑on‑one message that includes hypothetical performance, however, is still considered an advertisement unless it fits narrow carve‑outs for private fund investors or unsolicited requests.
The second prong covers any testimonial or endorsement for which you provide cash or non‑cash compensation directly or indirectly. Once a communication meets either prong, it is treated as an advertisement for SEC Marketing Rule purposes.
The SEC Marketing Rule includes seven broad prohibitions that apply to every advertisement you send to clients or prospects:
These prohibitions should be built into your review checklist for websites, decks, emails, and social campaigns. Before anything goes out, test each item against all seven and keep records that show how your firm satisfies these standards.
Visit and bookmark our Regulation, Legal & Compliance News section for more information on the SEC Marketing Rule.
The SEC Marketing Rule lets advisors use testimonials, endorsements, and third‑party ratings, but only if they meet specific disclosure and oversight conditions.
The rule treats testimonials and endorsements as advertisements when you provide cash or non‑cash compensation directly or indirectly.
Advertisements that include testimonials or endorsements must state clearly and prominently whether the speaker is a client, whether they are compensated, and any material conflicts.
When you pay a promoter, you generally must oversee their compliance and enter a written agreement that describes their duties and compensation, unless an exception applies. Exceptions include payments to certain affiliates and de minimis compensation of $1,000 or less in the preceding 12 months.
The rule also restricts the use of “ineligible persons” as compensated promoters, based on specified SEC actions, criminal convictions, and regulatory orders.
Third‑party ratings can be powerful marketing tools, but the rule sets conditions before you use them in advertisements. You must have a reasonable basis to believe any survey or questionnaire used to create the rating is:
You must also disclose clearly and prominently:
Testimonials, endorsements, and ratings can support your story without creating regulatory risk if used correctly. The key is to treat each item as an advertisement under the SEC Marketing Rule and build disclosures, oversight, and records into your standard review process.
Performance is one of the most sensitive parts of the SEC Marketing Rule. The rule sets detailed conditions on how advisors may show returns. In most cases, if you show gross performance, you must also show net performance with at least equal prominence, using the same methodology and period.
Baseline requirements for performance advertising include:
Recent industry analysis highlights one important shift on net performance. For extracted performance and many portfolio or investment characteristics, SEC staff may allow gross‑only metrics in some cases. You must also show the total portfolio’s gross and net performance prominently and meet the specific conditions in the Marketing Compliance FAQs.
Advisors using case studies, attribution reports, or risk statistics in marketing should now test those presentations against the updated FAQ conditions, not just the original rule text.
For more insights on how the SEC Marketing Rule applies to your practice, visit our goRIA Practice Management News section.
As exams and enforcement actions stack up, the SEC Marketing Rule is becoming one of the key tests of an advisor’s compliance program.
“In 2026, investment advisors should treat the not-so-new Marketing Rule as a core, day-to-day compliance obligation rather than a technical rule relegated to the back office,” explains Isaac Mamaysky, partner at Potomac Law Group.
“Some important areas to keep top of mind are the rule’s general anti-fraud prohibitions, restrictions on advertising hypothetical performance without vetting the recipients, and the disclosure requirements for testimonials, endorsements, and third-party ratings.
“The SEC’s risk alerts, examination priority releases, and enforcement actions over the past several years make clear that unsubstantiated claims, broad-based advertising of hypothetical performance, and other Marketing Rule violations are high-priority issues and enforcement priorities.”
Recent enforcement cases show how quickly the SEC moves when advisors miss key parts of the SEC Marketing Rule.
“The SEC has issued risk alerts saying that the Marketing Rule should be a compliance priority, and the agency has repeatedly said that Marketing Rule compliance will be subject to examination,” Mamaysky says. “Marketing Rule violations can lead to fines, remediation requirements, and reputational harm.”
Mamaysky adds that there have been multiple enforcement actions concerning Marketing Rule compliance. Here are some notable examples:
In September 2023, the SEC charged nine advisors for advertising hypothetical performance on their public websites. These firms allegedly made model results available to a wide, untargeted audience.
The SEC said the advisors did not limit hypothetical performance to investors for whom it was vetted as relevant under the rule’s audience and disclosure conditions.
In March 2024, the SEC charged two advisors that claimed to use artificial intelligence and machine‑learning tools they did not actually have.
The firms allegedly promoted AI‑driven capabilities in their marketing that were not supported by their actual systems and processes. This made those statements untrue and unsubstantiated under the SEC Marketing Rule.
In September 2024, the SEC charged nine advisors for untrue or unsubstantiated advertising claims and misuse of testimonials, endorsements, and third‑party ratings.
The SEC alleged false third‑party rating statements and unsupported “conflict‑free advisory services” claims. It also said some testimonials were not from current clients and paid endorsements missed required disclosures.
“Based on the SEC’s repeated public statements and enforcement activity, advisors should expect continued attention on their marketing,” Mamaysky says. “They should also assume that marketing practices will be closely reviewed during examinations.”
For most firms, staying compliant starts with treating marketing as a standing compliance project and not a one‑time policy update. Every website change, deck refresh, and campaign needs a quick Marketing Rule check before it goes live.
“The starting point is ensuring that firm policies are fully updated to reflect the current Marketing Rule rather than legacy advertising and solicitation rules,” Mamaysky says.
“What we've all been calling the 'new Marketing Rule’ is no longer new, and the SEC has made clear through risk alerts, releases about examination priorities, and enforcement proceedings that Marketing Rule compliance is an agency priority.”
The good news for advisors and RIAs is that the SEC Marketing Rule is not overly complicated, according to Mamaysky.
“You can read the whole thing in a few minutes and its language is clear. The requirements are straightforward, but they have to be implemented. I advise RIAs to make sure their compliance policies are updated, to read the rule itself, study their compliance policies, and then just make sure to follow that roadmap.”
From here, your priorities are simple to list, but they take work to put in place across the firm. Update written policies, train advisors and marketing staff, and test real‑world scenarios involving performance, testimonials, endorsements, and third‑party ratings.
Subscribe to InvestmentNews today to keep up with SEC enforcement trends and future guidance on the SEC Marketing Rule.
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