The SEC Marketing Rule, explained for advisors who actually market
The rule that governs how SEC-registered advisers advertise is shorter than its reputation and stricter than most agencies assume. What it allows, what it bans, what the SEC has charged, and what changed in 2025 and 2026.
The SEC Marketing Rule is Rule 206(4)-1 under the Investment Advisers Act of 1940. It governs every advertisement an SEC-registered investment adviser makes, and advisers have had to comply since November 4, 2022, when it replaced the old advertising and cash-solicitation rules. It is principles-based: seven general prohibitions apply to every ad — no untrue or unsubstantiated statements of material fact, no misleading implications, benefits presented with their material risks, and performance presented fairly.
On top of those, specific conditions apply to three things. Testimonials and endorsements, including paid influencers, are allowed with clear and prominent disclosures, adviser oversight, a written agreement for compensation above $1,000 in twelve months, and no ineligible promoters. Third-party ratings need their date, source and any compensation disclosed. Performance must show net alongside gross and cover one-, five- and ten-year periods for portfolios, and hypothetical performance requires policies ensuring it fits the audience. Copies of every advertisement must be kept for five years.
What counts as an advertisement
Everything else in the rule hangs on this definition, and it is much broader than "anything we paid to run".
Two ways a communication becomes an advertisement
The first prong covers any direct or indirect communication an adviser makes to more than one person that offers its investment advisory services with regard to securities to prospective clients or private fund investors, or offers new advisory services to current clients. The second prong covers any testimonial or endorsement the adviser compensates, directly or indirectly — even if it reaches a single person.
What is excluded
- Extemporaneous, live, oral communications. An unscripted answer on a live webinar — not the slides, and not the script of a recorded video.
- Required regulatory communications. Information in a statutory or regulatory notice, filing or other required communication, such as Form ADV or Form CRS, as long as it is reasonably designed to satisfy that requirement.
- Most one-on-one communications. A message to a single person falls outside the first prong — unless it includes hypothetical performance, which makes even a one-to-one message an advertisement unless it answers an unsolicited request.
What that means for social media, video and content
A post on your firm's LinkedIn page promoting your services is an advertisement. A scripted video is an advertisement; only the live, extemporaneous part of a live event is not. A blog post that purely educates is often not one, while the same post ending in "book a call with us" usually is — the line is facts and circumstances, so treat borderline content the way your compliance team does.
Third-party content can become yours, too. Commenting approvingly on it, selectively featuring it or editing it is what the SEC's adopting release calls adoption; helping write it is entanglement. Either way, the rule then treats it as your advertisement.
The seven general prohibitions
These apply to every advertisement, whether or not it contains a testimonial, a rating or a single number. Paraphrased from Rule 206(4)-1(a):
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1
No untrue statements, and no misleading omissions
An advertisement may not state an untrue material fact, or leave out a material fact needed to keep what it does say from being misleading.
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2
No claims you cannot substantiate on demand
Every material statement of fact needs a reasonable basis for believing you could prove it if the SEC asked. "Fee-only", "fiduciary", "independent" and "award-winning" are statements of fact. So is every number.
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3
No misleading implications
True statements arranged to suggest something false still fail. A testimonial chosen because it is the most dramatic implies a typical result; a photo can imply an outcome the copy never claims.
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4
Benefits only with their risks
Discussing a potential benefit of your services requires fair and balanced treatment of the material risks or limitations that come with it, in the same advertisement — not in a separate brochure.
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5
Specific investment advice presented fairly
Referring to a specific recommendation — a call that worked, a holding you picked — has to be fair and balanced, which in practice means not showing only the winners.
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6
Performance included, excluded and timed fairly
Which results you show, which you leave out and which periods you choose must all be fair and balanced. Picking the window that flatters the number is the textbook failure.
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7
Nothing otherwise materially misleading
The catch-all. If a reasonable reader would come away with a materially false impression, the advertisement fails even when no other provision names the problem.
Testimonials and endorsements, including influencers
The biggest change from the old rule, and the area the SEC's examiners keep returning to. A testimonial comes from a current client or investor; an endorsement comes from anyone else. Both are allowed, under four conditions.
| Condition | What it requires | When it applies |
|---|---|---|
| Clear and prominent disclosures | Whether the person is a client; whether they were compensated, in cash or otherwise; a brief statement of material conflicts. Shown with the testimonial or endorsement itself. Plus the material terms of any compensation and a description of the conflicts. | Every testimonial and endorsement, with narrow exceptions for some broker-dealer promoters |
| Adviser oversight | A reasonable basis for believing the testimonial or endorsement complies with the rule. | Every testimonial and endorsement |
| Written agreement | A written agreement describing the scope of the activities and the terms of compensation. | Compensated ones, unless the compensation is $1,000 or less over the past twelve months, or the person is an affiliate |
| No ineligible persons | No compensation to a person subject to a disqualifying SEC action or other disqualifying event, generally within the past ten years. | Compensated ones, unless the compensation is de minimis |
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What the examiners found in December 2025
On December 16, 2025 the SEC's Division of Examinations published a risk alert on how advisers were handling these provisions and the third-party ratings provisions. The most common failure was the simplest: required disclosures missing at the time the testimonial or endorsement was disseminated. The others:
- Hyperlinked disclosures. Required disclosures placed behind a link instead of within the testimonial or endorsement.
- Small print. Disclosures in a smaller or lighter font than the testimonial or endorsement they belonged to.
- Gift cards for reviews. Advisers giving clients gift cards to write reviews on third-party websites.
- Ineligible promoters. Compensating people the adviser knew or should have known were ineligible, including over state securities disciplinary histories.
- Policies on paper only. Compliance procedures never updated for testimonials and endorsements — or updated and not implemented.
What the staff eased in January 2026
A staff FAQ posted January 15, 2026 says the staff will not recommend enforcement against an adviser that compensates a person subject to a self-regulatory organization final order in the prior ten years, if four conditions hold: the order is the only reason the person is ineligible, the SRO did not expel, suspend or bar them, they comply with the order's terms, and every advertisement with their testimonial or endorsement discloses that they are subject to a self-regulatory organization order. Staff FAQs are not rules, but they are the clearest signal of where enforcement will and will not come from.
Online reviews
Reviews on an independent site that you do not edit, curate or pay for are generally not your advertisement. Featuring the good ones on your website, suppressing the bad ones, or paying for them changes that — at which point they are testimonials, with all four conditions attached.
Third-party ratings and awards
Rankings, awards and "top advisor" lists are allowed, under two conditions.
- A fair questionnaire. A reasonable basis for believing any questionnaire or survey behind the rating makes it equally easy to give favorable and unfavorable answers, and was not designed to produce a predetermined result.
- Three disclosures, clear and prominent. The date the rating was given and the period it was based on; who created and tabulated it; and whether you paid anything, directly or indirectly, to obtain or use it.
The SEC's September 2024 sweep included firms whose third-party ratings left out required disclosures. Its examiners have also flagged advertisements claiming high ratings without disclosing that the methodology rested primarily on factors unrelated to the quality of the advice.
Performance: what you can show, and how
Performance is where most of the enforcement has landed. The rule does not ban it; it sets the terms.
- Net alongside gross. Gross performance only with net performance of at least equal prominence, over the same period and with the same methodology. A January 15, 2026 staff FAQ added that showing net based on actual fees, when the fee your audience will pay is higher, is a facts-and-circumstances question rather than an automatic violation.
- One, five and ten years. Portfolio performance, other than for private funds, must show one-, five- and ten-year periods of equal prominence, ending no earlier than the most recent calendar year-end — or the life of the portfolio if it is younger.
- No SEC halo. No statement, express or implied, that the SEC approved or reviewed the calculation or the presentation.
- Related and extracted performance. Related portfolios must all be included, with narrow exceptions; extracted performance, one slice of a portfolio, requires offering the total portfolio's results. A March 19, 2025 staff FAQ allows a gross-only extract if it is clearly labeled as gross and shown with the total portfolio's gross and net performance, at least as prominently.
- Predecessor performance. Allowed only when the people primarily responsible for it now manage accounts at your firm, the accounts are sufficiently similar, and the advertisement clearly discloses that the results were achieved elsewhere.
Hypothetical performance, the most-charged provision
Hypothetical performance means results no portfolio of yours actually achieved: model performance, backtested performance, and targeted or projected returns. It is allowed only if the adviser adopts and implements policies and procedures reasonably designed to ensure it is relevant to the likely financial situation and investment objectives of the intended audience, and discloses the criteria, assumptions, risks and limitations behind it.
The records you have to keep
An advertisement you cannot produce later is a problem of its own, separate from whatever it said.
- What. A copy of every advertisement disseminated, plus the records that substantiate its performance and the disclosures delivered for testimonials and endorsements (Rule 204-2).
- How long. Five years from the end of the fiscal year in which the last entry was made, the first two in an appropriate office of the adviser.
- Your filing has to match. Form ADV Part 1A asks marketing questions too — whether your advertisements include performance, hypothetical performance, testimonials, endorsements or third-party ratings, and whether you pay for them. Your filing and your ads should tell the same story.
The rule, channel by channel
The rule is channel-neutral. The traps are not. Where advisory-firm marketing most often goes wrong, platform by platform:
| Channel | When it is an advertisement | The common trap | What fixes it |
|---|---|---|---|
| Google and Microsoft search ads | Always: paid copy offering your services | Automatically created assets and AI-written headlines publishing text nobody reviewed | Switch them off; review every headline and description before it runs |
| Facebook and Instagram ads | Always | Targeting built on age or ZIP code, which Meta's financial services category removed in January 2025 | Let the creative do the targeting, without asserting personal attributes about the viewer |
| LinkedIn and organic social | When a post promotes your services, and third-party posts once you adopt them | Resharing or approvingly commenting on a client's praise | Treat your firm's feed like any other ad channel, including what you amplify |
| YouTube and recorded video | Scripted or recorded: yes. Live and extemporaneous: no | Treating a recorded webinar as if it were live speech | Review the script and the final edit, not just the idea |
| Influencers, podcasts and newsletters | Any compensated endorsement, even to a single person | The disclosure in a link in bio, or missing entirely | Disclose in the content itself; written agreement above $1,000; eligibility check; records |
| Google reviews and review sites | Once you pay for, curate or feature them | Gift cards for reviews; showcasing only five-star reviews on your site | Leave independent reviews independent; anything you feature gets testimonial treatment |
| Website and blog | Service pages: yes. Pure education: often not | Hypothetical or projected returns on public pages | Keep hypothetical performance off mass-audience pages |
| Email and newsletters | When sent to more than one person and promoting services | Performance or testimonials in a mass email without their disclosures | The same review and the same disclosures as any other advertisement |
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What the SEC has actually charged
Settled actions are the clearest guide to where the line is, because they show what was enforced rather than what was theorized. The record so far, from sec.gov:
| Date | Advisers | What was charged | Civil penalties |
|---|---|---|---|
| Sep 11, 2023 | 9 | Hypothetical performance on public websites without the required policies; two also failed to keep copies of their advertisements | $850,000 combined |
| Apr 12, 2024 | 5 | Hypothetical performance on public websites; one firm also misleading and unsubstantiated model performance, and no written agreements with paid endorsers | $200,000 combined |
| Sep 9, 2024 | 9 | False or unsubstantiated claims, and testimonials, endorsements and third-party ratings without required disclosures | $1,240,000 combined |
| Nov 1, 2024 | 1 | Paid endorsements from professional athletes with no disclosure that they were compensated non-clients, plus hypothetical performance on its website | $250,000 |
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The pattern is consistent. Hypothetical performance shown to the public is the most-charged problem; missing or buried disclosures on testimonials and endorsements is the second. Neither requires an intent to deceive — under Section 206(4), negligence is enough.
What changed in 2025 and 2026
We found no proposed amendment to the rule itself as of this update. What moved is staff guidance, examination focus, FINRA and the ad platforms — in this order:
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January 2025 — Meta makes its financial services category mandatory
US ads for financial products and services must run in Meta's special ad category: a fixed age range, all genders, no ZIP-code targeting, a 15-mile minimum radius around any location and no lookalike audiences. (Meta documentation)
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March 19, 2025 — staff FAQs on extracted performance and portfolio characteristics
Including the conditions under which a gross-only extract can be shown without its own net figure.
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December 16, 2025 — risk alert on testimonials, endorsements and ratings
Missing, hyperlinked and small-print disclosures, gift cards for reviews, ineligible promoters, and policies that were never implemented.
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January 15, 2026 — staff FAQs on model fees and on SRO orders
Net performance based on actual fees becomes a facts-and-circumstances question, and advisers may compensate some people subject to SRO final orders, with disclosure. (SEC Marketing Compliance FAQ)
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October 15, 2026 — SEC approves FINRA Rule 2210 amendments on projections
Broker-dealers may communicate projected performance and targeted returns under conditions, generally excluding mass-audience retail communications. FINRA will announce the effective date in a Regulatory Notice.
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October 20, 2026 — Google announces Financial Services Verification for the US
Certain financial advertisers will have to show they are authorized by regulators or recognized registries before their ads run, with rollout planned for early 2027 and details still to be published. (Google announcement)
If you are also a broker-dealer: FINRA Rule 2210
Broker-dealer communications follow FINRA Rule 2210 instead, and dual registrants follow both. Three differences matter most in practice.
- Pre-approval is written into the rule. A registered principal must approve each retail communication before the earlier of its use or its filing with FINRA.
- Some communications must be filed. Certain retail communications also have to be filed with FINRA's Advertising Regulation Department.
- Projections were off-limits until now. The amendments the SEC approved on October 15, 2026 allow projected performance and targeted returns under written audience-relevance policies, disclosed assumptions and risks, and records of their sources — generally not in mass-audience retail communications. Material that satisfies the Marketing Rule does not automatically satisfy Rule 2210.
So a dual registrant's ad usually needs two reads, against two standards. Plan the calendar around that, not around the launch date.
Five questions to ask about any ad before it goes to compliance
This does not replace your compliance review. It makes sure what reaches it is worth reviewing.
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Is it an advertisement?
Does it offer your advisory services to more than one person, or is it a compensated testimonial or endorsement? If it contains hypothetical performance, even a one-to-one message can qualify. If the answer is yes, everything below applies.
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Can you prove every factual claim?
List every statement of fact, such as fiduciary, fee-only, a number or a ranking, next to the document that substantiates it. A claim without a document is a claim to cut.
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Are the benefits balanced by their risks?
Every potential benefit of your services needs fair and balanced treatment of its material risks or limitations, in the same advertisement rather than in a separate document.
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Which specific conditions apply?
A testimonial or endorsement needs disclosures, oversight, an agreement and an eligible person. A third-party rating needs its date, source and any compensation disclosed. Performance needs net with gross, the required periods, and no hypothetical figures without audience-relevance policies.
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Who approved it, and where is the record?
Get your firm's documented approval before it runs, and keep a copy of the final version with its substantiation for five years.
The honest caveats
A guide that sounds certain about a facts-and-circumstances rule is selling its confidence, not its knowledge.
- This is not legal advice. It is a marketer's working summary of a rule your compliance team and counsel interpret for your firm. Where this guide and they disagree, they win.
- Staff FAQs and risk alerts are not rules. They describe the staff's views and observations. They are still the best available map of where enforcement is pointed.
- Most of the rule is facts and circumstances. The same sentence can be fine in one ad and misleading in another. Anyone selling you a universal list of approved phrases is overselling.
- State-registered advisers follow their state's rules, which may differ from the SEC's.
- Read the primary sources. The adopting release and the SEC's Marketing Compliance FAQ are the documents this guide is built on.
Who wrote this
Gabriel Facenda
Founder, Reyter
Gabriel has spent years running marketing for an SEC-registered investment adviser, paid and organic, with every piece going through compliance review before it went out, and has run acquisition budgets for venture-funded companies across the US and Brazil. This guide is built from the rule text, the SEC's adopting release, staff FAQs, risk alerts and enforcement orders, all linked above, and was checked against them on 23 October 2026.
Reyter runs marketing for advisory firms under exactly these rules. How we work with advisors → · Full background
Marketing Rule questions advisors actually ask
What is the SEC Marketing Rule?
Rule 206(4)-1 under the Investment Advisers Act of 1940, which governs advertisements by SEC-registered investment advisers. It replaced the old advertising and cash-solicitation rules, with a compliance date of November 4, 2022. It sets seven general prohibitions for every advertisement and specific conditions for testimonials, endorsements, third-party ratings and performance.
When did the Marketing Rule take effect?
The SEC adopted it in December 2020, it became effective on May 4, 2021, and advisers had to comply by November 4, 2022. Every advertisement disseminated since then is held to it.
Can financial advisors use testimonials?
Yes. Since November 4, 2022 advisers can use testimonials from clients and endorsements from non-clients, if the advertisement clearly and prominently discloses whether the person is a client, whether they were compensated and any material conflicts, the adviser has a reasonable basis to believe it complies, and paid arrangements above $1,000 in twelve months have a written agreement with an eligible person.
Can financial advisors pay influencers?
Yes, as compensated endorsements. The influencer must not be an ineligible person, the disclosures must appear in the content itself when it is published rather than behind a link, compensation above $1,000 in twelve months requires a written agreement, and the adviser must oversee the content and keep records. The FTC's endorsement rules also apply.
Is a Google review a testimonial under the Marketing Rule?
A review on an independent site that the adviser does not pay for, edit or curate is generally not the adviser's advertisement. Paying for reviews, including with gift cards, featuring selected reviews on the adviser's own site, or suppressing negative ones makes them testimonials subject to the rule's conditions.
Can advisors advertise hypothetical or projected performance?
Only with policies and procedures reasonably designed to ensure the hypothetical performance is relevant to the likely financial situation and investment objectives of the intended audience, plus disclosure of the criteria, assumptions, risks and limitations. That is very hard to satisfy for a general-public audience, and hypothetical performance on public websites was the basis of the SEC's 2023 and 2024 sweeps.
How must performance be shown in an advertisement?
Gross performance only with net performance at least as prominent, over the same period and methodology. Portfolio performance, other than for private funds, needs one-, five- and ten-year periods of equal prominence ending no earlier than the most recent calendar year-end. And nothing may suggest the SEC approved or reviewed the figures.
Do advisers need compliance approval before publishing an ad?
For broker-dealers, yes: FINRA Rule 2210 requires a registered principal to approve retail communications before use. The Marketing Rule itself does not spell out pre-approval for investment advisers, but the compliance rule, Rule 206(4)-7, requires written policies reasonably designed to prevent violations, and review before use is how most firms meet it.
How long do advisers have to keep copies of advertisements?
Five years from the end of the fiscal year in which the last entry was made, the first two in an appropriate office of the adviser, under Rule 204-2. That covers the advertisement itself and the records that substantiate its performance and its testimonial and endorsement disclosures.
Does the Marketing Rule apply to social media?
Yes, whenever a post offers the adviser's services to more than one person, and to third-party content the adviser adopts or helps create. Live, extemporaneous speech is excluded, but scripted or recorded video is not.
What changed in the Marketing Rule in 2025 and 2026?
The rule text did not change. SEC staff updated its FAQs on extracted performance and portfolio characteristics in March 2025, and on model fees and on compensating people subject to SRO orders in January 2026. The Division of Examinations published a risk alert on testimonials, endorsements and ratings in December 2025, and in October 2026 the SEC approved FINRA amendments allowing broker-dealers to use projections under conditions.
What happens if an adviser violates the Marketing Rule?
Settled SEC actions have included censures, cease-and-desist orders and civil penalties, including $850,000 across nine advisers in September 2023, $200,000 across five in April 2024, $1,240,000 across nine in September 2024, and $250,000 for one adviser in November 2024. Section 206(4) does not require intent to deceive; negligence is enough.
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Reyter is a marketing agency, not a law firm or a compliance consultant. Nothing in this guide is legal advice.