SEC Marketing Rule: Key Guidelines and Compliance Tips

Short Summary 

What should RIAs know about the SEC Marketing Rule? The SEC Marketing Rule sets clear guidelines for how investment advisers can advertise their services, covering everything from testimonials to performance claims. This blog unpacks the rule, outlines key SEC compliance requirements, and explores how firms can market confidently without crossing regulatory lines. 

Marketing is constant, woven into nearly every message we see and every product we consider. From financial services to fashion, the pitch is always polished, persuasive, and often hard to verify.  

In the financial sector, most people don’t know how to judge an advisor’s promise, understand past performance data, or spot when a claim is too good to be true. That’s made the industry a natural breeding ground for exaggeration, selective reporting, and, at times, outright deception. 

The SEC has spent years trying to rebuild the trust in the financial system that’s been shaken by everything from high-profile fraud cases to misleading performance claims, hidden fees, and advisors putting their interests ahead of their clients’.  

One of the clearest responses to that problem is the updated SEC Marketing Rule, a sweeping reform aimed at modernizing how investment advisers present themselves to the public. 

In this blog, we’ll break down what the Advisers Act Marketing Rule covers, how it affects RIA marketing, and how firms can stay compliant. 

What Is the SEC Marketing Rule? 

The SEC Marketing Rule, officially adopted in 2020 and fully enforceable as of 2022, is one of the most significant updates to the Investment Advisers Act in decades. It replaces a patchwork of outdated advertising rules with a single, modernized framework that reflects how advisers promote themselves today. 

Before this update, advisers operated under a rule written in 1961. That rule banned all testimonials outright, placed vague restrictions on performance advertising, and didn’t account for digital marketing. As new communication channels emerged, advisers were left guessing at how to apply old rules to new formats.  

The updated rule recognizes that investment adviser marketing has evolved from traditional brochures to podcasts, Instagram posts, and influencer-style endorsements, and makes it clear that you can now use these tools to attract clients, but you’re responsible for ensuring your message is accurate. 

Here’s what it covers: 

Who it applies to: The rule applies to all registered investment advisers (RIAs) under the Advisers Act. Whether you’re a solo advisor or part of a larger firm, if you’re promoting your services to clients or prospects, this rule likely applies to you. 

What counts as an “advertisement”: The definition of “advertisement” has been expanded to include any communications made to more than one person, or a single person if it involves hypothetical performance. This now includes:  

Website and social media posts
Clien testimonials or endorsements
Third-party ratings  
Performance studies or case studies
Paid promotions or referrals

Key Requirements Under the SEC Marketing Rule 

The updated SEC Marketing Rule gives advisers more flexibility, but it also comes with clearer guardrails. For full RIA compliance, firms need to understand not just what’s allowed, but under what conditions. Here’s a breakdown of the most important requirements:  

Disclosures for Testimonials and Endorsements: Endorsements are powerful but also potentially misleading if people don’t understand the context. You can use testimonials, endorsements, and even third-party ratings, if you follow these rules: 

Clearly disclose whether the person giving the testimonial is a client, whether they were paid, and any material conflicts of interest.
Make those disclosures clear and prominent, not buried in footnotes or hidden in a separate link. 

If compensation is involved (even a small gift or discount), that must be disclosed upfront.

Rules for Presenting Performance Data: Performance data, if misused, can paint an unrealistic picture of risk and reward. Under the new rule, performance data is allowed with specific guardrails that aim to ensure investors see the whole story, not just the best-case scenario. RIAs have to:

Present both net and gross performance. 
Use a time period long enough to avoid cherry-picking. 
Ensure that hypothetical performance (like backtested data) is relevant to the audience and accompanied by detailed disclosures.  
Provide the full performance context if they use extracted performance (a subset of a portfolio).  

Prohibited Practices: Some marketing behaviors are flat-out banned, regardless of intention. These include: 

• No cherry-picking results to highlight only the best-performing investments. 

• No making unsubstantiated claims (e.g., “we always beat the market”) unless you can clearly prove it. 

• No using graphics, headlines, or formatting that distorts the true performance picture. 

Even technically accurate information can become noncompliant if it’s presented misleadingly. 

Oversight of Third-Party Ratings: Third-party awards and rankings aren’t off-limits, but they must be used responsibly:  

• The rating must be based on a fair and balanced methodology. 

• Disclosures must explain the criteria used, who paid for the rating (if anyone), and any relationship between the adviser and the provider. 

• If you paid to be included or featured, this has to be clearly stated. 

Recordkeeping and Documentation Requirements: You have to be able to prove compliance through:  

• Maintaining detailed records of all advertisements, including social posts, email campaigns, landing pages, and any promotional messaging via chat or mobile platforms. 

• Keeping documentation supporting performance claims, third-party ratings, and any use of testimonials or endorsements. 

How the SEC Is Approaching the New Rule 

Since the new rule took effect, the SEC has taken a layered approach to its implementation, including educating firms, highlighting risks, initiating exams, and, where necessary, enforcing the law. 

Here’s how that broader strategy is unfolding. 

Targeted exams are already underway 

Not long after the rule became enforceable, the SEC’s Division of Examinations launched a targeted sweep of advisory firms. These exams were designed to assess how well advisers were interpreting and applying the new rule in their marketing efforts. 

Examiners focused heavily on the use of hypothetical performance and client testimonials. Both were previously prohibited but are now allowed under specific conditions. Many advisers had updated their marketing to take advantage of the new flexibility but failed to apply the necessary safeguards. As a result, a number of firms received deficiency letters. 

These letters aren’t the same as enforcement actions, but they’re serious. They serve as formal notices that something isn’t working as it should and that future noncompliance could carry consequences. 

Risk alerts are signaling the SEC’s priorities 

In mid-2023, the SEC issued a risk alert outlining the most common issues uncovered during its early exams. This document acts as both a warning and a guidepost. It doesn’t name specific firms, but it does point to clear patterns of concern. 

Among the top issues are advisers using testimonials or endorsements without clear disclosures, presenting cherry-picked performance without full context, and failing to revise internal policies to reflect the new rule. In some cases, firms were still relying on outdated definitions or hadn’t trained staff on how the rule affects day-to-day marketing practices. 

Recordkeeping failures remain a major concern 

While the Marketing Rule introduced new content requirements, it didn’t change the underlying obligation to maintain accurate records. And that’s where many firms are still falling short. 

Between 2022 and 2023, over $1.5 billion in fines were levied by the SEC (and in related cases, the CFTC) against dozens of broker‑dealers and investment advisers for failure to retain business communications on unofficial platforms. 

In April 2024, a follow-up risk alert issued by the SEC identified record-keeping as one of the observed deficiencies by examiners. They emphasised that any content used to promote a firm’s services, including social media posts, email newsletters, or chat-based outreach, must be archived and available for review.  

The SEC is focusing on substance, not technicalities 

Finally, it’s worth noting how the SEC is framing its expectations. Chair Gary Gensler and other senior officials have repeatedly emphasized that compliance is about substance. The goal isn’t to meet the bare minimum or to rely on technical loopholes but to ensure that marketing is clear, fair, and not misleading. 

This means disclosures must be easily understood by the intended audience, and they must truly inform, not confuse. Claims that are technically accurate but likely to mislead an average investor may still be viewed as violations. 

The takeaway here is simple. The SEC is looking at the bigger picture. If a marketing message creates an unrealistic impression, omits important context, or plays games with performance data, it may not survive regulatory scrutiny. 

Strategies for Staying on the Right Side of the Rule 

The SEC Marketing Rule is an opportunity for advisers to raise the quality and consistency of their communications, without sacrificing clarity, creativity, or reach. Doing that requires a system-wide shift in how marketing is planned, approved, and preserved. 

Here’s how firms can effectively market their financial advisers while still maintaining  SEC compliance: 

• Involve compliance from the start: The strongest firms bring compliance into the process early, working collaboratively with marketing teams to shape messaging that is both persuasive and defensible. This proactive approach helps reduce rework, delays, and internal friction. 

• Create clear internal definitions: What counts as an “advertisement”? When does a social post need a disclosure? Who decides when something needs review? Defining these terms internally helps avoid confusion and ensures everyone is speaking the same language. Consider creating a shared reference guide for marketing and client-facing staff. 

• Use pre-approved templates and workflows: Build a library of pre-approved content for common materials like testimonials, performance summaries, or FAQs that meet regulatory standards. Combine this with a structured workflow that tracks reviews, approvals, and version history across teams. 

• Centralize recordkeeping: Firms should maintain a centralized, searchable archive of all marketing materials, including:
  – The final versions of published content
  – Related disclosures and disclaimers
  – Supporting data for performance claims or ratings
  – Documentation of approval and review processes 

• Monitor digital and mobile channels: Social media, mobile messaging, webinars, podcasts, and even chat apps are now part of how firms reach clients. Any of these can fall under the Marketing Rule if they promote the firm’s services or track record. Make sure these channels are reviewed, monitored, and archived like any other. 

• Train the full team, not just marketing: Client-facing professionals, social media managers, and even senior leadership should also know the marketing boundaries. Regular training can help teams identify red flags, understand disclosure requirements, and escalate questionable content before it goes live. 

• Reassess regularly: As guidance evolves or new digital platforms emerge, firms should revisit their marketing policies and systems. Schedule annual reviews of your workflows, templates, and tools to make sure they’re still aligned with current regulations and with how your firm actually operates. 

Clarity Builds Confidence 

Marketing in the financial world walks a fine line. It’s about reaching clients with compelling stories but without crossing into exaggeration or misrepresentation. The SEC Marketing Rule aims to ensure those communications are grounded in truth, transparency, and context. 

When marketing is accurate, well-documented, and confidently delivered, it becomes a strategic asset rather than a regulatory liability. 

And that starts with the right infrastructure. One of the biggest risks firms face today is in the everyday communication channels that shape client relationships. These channels are often where testimonials are shared, performance is discussed, and informal marketing really happens. 

The LeapXpert Communications Platform helps firms bring those conversations into compliance. It captures business messages across mobile and chat platforms in real time, applies role-based governance rules, and integrates seamlessly with archiving and oversight systems. Whether you’re documenting a performance claim, capturing a referral conversation, or ensuring social interactions are reviewable, LeapXpert gives you visibility and control. 

Book a demo today. 

FAQs 

Who does the SEC Marketing Rule apply to?
The rule applies to all SEC-registered investment advisers (RIAs), regardless of size or structure. Whether you’re an independent advisor, part of a multi-office firm, or managing a small client book, if you’re promoting your services to prospective or existing clients, the rule likely applies to your marketing efforts. 

What qualifies as an “advertisement” under the new rule?
The rule takes a broad view of what counts as advertising. It includes any communication to more than one person that offers investment advisory services, or even to one person if it presents hypothetical performance. That means websites, social posts, podcasts, emails, testimonials, endorsements, and even paid referrals may all fall under the rule. 

What are the disclosure requirements for using endorsements?
If you use testimonials or endorsements, you need to disclose whether the person giving the statement is a client, whether they were compensated, and if there are any conflicts of interest. These disclosures must be clear, timely, and hard to miss with no fine print or hidden links. 

How can RIAs advertise performance data compliantly?
RIAs must present performance data fairly and with enough context to avoid misleading impressions. That includes showing both gross and net performance, covering a reasonable time period, and clearly disclosing any assumptions. Hypothetical or backtested results are allowed but require tight controls and tailored disclosures. 

What are the recordkeeping requirements under the rule?
Advisers must retain all advertisements, digital or otherwise, along with supporting documentation. This includes performance substantiation, third-party rating methodologies, and records of approval workflows. Social posts, newsletters, and messaging app content must all be archived if they promote the firm’s services. 

What tools can help with SEC Marketing Rule compliance?
Compliance tech can make a big difference. Tools like digital archiving systems, workflow automation platforms, and policy-based review engines can help manage approvals, track changes, and ensure retention. Communications platforms that capture and govern mobile messaging also help keep informal promotion channels compliant. 

What happens if an advisor violates the SEC Marketing Rule?
Consequences can range from deficiency letters to formal enforcement actions and financial penalties. In recent years, the SEC has increasingly prioritized transparency in marketing and has fined firms for misleading performance data, missing disclosures, and poor recordkeeping. Even honest mistakes can trigger costly reviews, so proactive compliance matters.