Compliance · Advertising
SEC Marketing Rule
Also known as: Rule 206(4)-1, Advisers Act Marketing Rule, Marketing Rule
The SEC Marketing Rule governs how registered investment advisers advertise. It replaces the old advertising and cash solicitation rules with seven prohibitions plus extra requirements for testimonials, endorsements, and ratings. It applies to SEC-registered investment advisers. Broker-dealers advertise under FINRA Rule 2210, and are reached by this rule only through its testimonial and endorsement provisions, where a narrow conditional exemption applies. It covers any advertisement regardless of channel, including a single compensated testimonial sent to one person.
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What counts as an advertisement
Two triggers put a communication under the rule. A communication that goes to more than one person and offers the adviser's services to prospective clients or private fund investors, or offers new services to current clients; or any testimonial or endorsement carrying compensation, even to an audience of one.
| Element | Threshold | Consequence |
|---|---|---|
| Communication to multiple people | Offers advisory services to prospective clients or private fund investors, or new services to current clients, and goes to more than one person | Full Marketing Rule applies |
| One-on-one communication | Tailored to a single client or investor | Excluded, unless bulk-sent messages are dressed up as individual |
| Testimonial or endorsement | Any compensation paid, direct or indirect | Counts as an advertisement even if sent to one person |
| Hypothetical performance | Included in a communication sent to one or more persons | Counts as an advertisement even if sent to one person |
The seven general prohibitions
Every advertisement is tested against the same seven prohibitions, regardless of format or channel.
| Prohibition | What it rules out |
|---|---|
| Untrue or misleading statements | Any untrue statement of material fact, or omitting a fact needed to keep the statement from being misleading |
| Unsubstantiated claims | A material statement of fact the adviser cannot support with evidence on request |
| Misleading implication | Information that creates an untrue or misleading impression, even when each individual fact is accurate |
| Benefits without risks | Discussing potential benefits without a fair and balanced treatment of risks or limitations |
| Unbalanced advice references | Referencing the adviser's specific investment advice in a way that is not fair and balanced |
| Cherry-picked performance | Including or excluding performance results in a way that is not fair and balanced |
| Any other misleading statement | A catch-all covering anything not addressed by the first six |
Testimonials, endorsements, and ratings
The rule, adopted December 22, 2020 and effective May 4, 2021 with a compliance date of November 4, 2022, reversed the prior near-total ban on testimonials, but replaced it with disclosure and paperwork.
| Requirement | Detail |
|---|---|
| Disclosure | Two disclosure tiers. Clear and prominent: client or non-client status, that compensation was provided, and a brief statement of material conflicts. Also required, but without a prominence standard: the material terms of the compensation arrangement, and a full description of material conflicts |
| Written agreement | Required once a promoter receives more than $1,000 in cash or non-cash compensation in any 12-month period |
| Disqualification | Bars compensated testimonials or endorsements from an "ineligible person," broadly someone subject to a disqualifying SEC action, or to specified convictions or regulatory orders from the SEC, CFTC, a state regulator, or an SRO within the prior ten years. Matters predating May 4, 2021 are grandfathered if they would not have disqualified the person under the old cash solicitation rule |
| Third-party ratings | The rating platform must give equal opportunity for positive and negative responses, and the ad must disclose the rating date, time period, issuing entity, and any compensation paid for the rating |
Performance advertising
| Rule | Requirement |
|---|---|
| Gross vs. net | Any gross performance shown must appear with equally prominent net performance for the same period, using the same methodology |
| Standardized periods | One-, five-, and ten-year returns, each with equal prominence, ending no earlier than the most recent calendar year-end. Life of the portfolio substitutes for any period it did not exist. Private funds are excluded from this requirement, and so is hypothetical performance under the (d)(6) proviso |
| Extracted performance | Showing the results of a subset of investments pulled from a portfolio requires the advertisement to provide, or offer to provide promptly, the total portfolio's performance. Since a March 2025 SEC staff FAQ, an extract may be shown gross-only if it is labeled gross and sits alongside the total portfolio's gross and net performance at equal prominence over a period covering the extract |
| Hypothetical performance | Requires written policies and procedures reasonably designed to ensure the results are relevant to the likely financial situation and investment objectives of the intended audience, plus disclosure of the criteria and assumptions used and of the risks and limitations of relying on the results |
What this means for your marketing
Every specific claim needs a paper trail. The ban on unsubstantiated statements means any concrete claim about growth, outcomes, or awards needs documentation the firm can produce on request, not just a source someone trusts.
A single compensated testimonial is still an advertisement. One client review, one paid creator post, one compensated referral, any of these triggers the full disclosure and written-agreement requirements, even though it reaches an audience of one.
Gross needs a net right next to it, not a link away. Same advertisement, same period, same methodology, at least equal prominence. Narrow staff no-action positions from March 2025 allow gross-only presentation of an extract or of certain portfolio characteristics, but only when the total portfolio's gross and net performance is shown alongside at equal prominence.
A review platform needs to accept negative reviews before it's citable. A five-star badge from a platform that only surfaces positive reviews fails the equally-easy test and cannot go in an advertisement.
What this looks like in a script
Testimonials must disclose client status and compensation, even when the answer is no compensation.
A specific, attributed performance claim needs support the firm can produce on request. The general claim removes the substantiation burden.
A written agreement is required once compensation exceeds $1,000 in 12 months, but documenting terms even for uncompensated testimonials avoids later disputes about scope.
Common questions
Primary sources
- SEC.gov, Investment Adviser Marketing (small business compliance guide)SEC plain-language overview
- SEC Adopts Modernized Marketing Rule for Investment Advisersadopting release
- Investment Adviser Marketing, Release No. IA-5653 (86 FR 13024)adopting release; adopted December 22, 2020, effective May 4, 2021, compliance date November 4, 2022
- 17 CFR 275.206(4)-1, Investment Adviser Marketingfull rule text
Related terms
Daniel Schoester
Founder & CEO
Daniel Schoester is the founder and CEO of Croton Content, a video-first AEO, SEO, and GEO agency exclusively for financial brands.
He holds an Honours Bachelor of Business Administration in finance and began his career writing for financial publishers, with bylines at Forbes Advisor, The Average Joe, Hardbacon, MoneyWise, money.ca, Loans Canada, WealthRocket and Canadian Mortgage Trends. His content at a prominent Canadian mortgage website quadrupled monthly traffic to over one million views.
He founded Croton Content in 2022 to build evergreen content assets for financial brands, then expanded into YouTube in 2024 after studying Google's shift toward video in search. His client work has influenced more than $1M in revenue and drawn over 5M views. In March 2026, Otterly.AI named him one of 33 global AI Search Top Voices.
Canadian by nationality, he lives in Lisbon, Portugal, speaks in person across Europe and works remotely worldwide.
Educational information only. This is not legal or compliance advice. Confirm current requirements with your compliance officer and the primary sources above.
Last reviewed: 10 September 2026 · Reviewed against 17 CFR 275.206(4)-1 as amended and the adopting release.
