SEC Marketing Rule Checker

Rule 206(4)-1, read against an adviser's web page.

The Marketing Rule is a single section of the Code of Federal Regulations, and it reaches almost everything an adviser publishes. Here is what it covers, the parts of a typical adviser site each paragraph engages, and which of those a phrase checker can read and which need a person. For the rule itself in its own words, read our walkthrough of the SEC Marketing Rule.

What the SEC Marketing Rule is

The SEC Marketing Rule is 17 CFR 275.206(4)-1, "Investment adviser marketing", adopted by the SEC in December 2020 under the Investment Advisers Act of 1940. It replaced two older rules, the advertising rule that most guides still call the SEC advertising rules and the cash solicitation rule, with one rulebook, and firms have had to follow it since November 4, 2022. It applies to "any investment adviser registered or required to be registered" with the SEC, and it makes it unlawful to disseminate an advertisement that breaks any of its four operative paragraphs: the general prohibitions, testimonials and endorsements, third-party ratings, and performance.

An adviser registered with its state rather than the SEC answers to the state's advertising rule instead, and a broker-dealer's communications answer to FINRA Rule 2210, which we cover in a separate guide. This checker's pack is written for the SEC-registered investment adviser marketing rule and says so: broker-dealer content is outside it.

Is your website an advertisement?

Almost certainly. The rule defines an advertisement in two halves. The first is "any direct or indirect communication an investment adviser makes to more than one person" that offers its advisory services with regard to securities to prospective clients, or new services to current ones; a page that invites a reader to become a client is exactly that. If the communication includes hypothetical performance, one person is enough. The second half is any testimonial or endorsement the adviser pays for, directly or indirectly.

Two carve-outs matter in practice: "extemporaneous, live, oral communications", which covers a conversation but not the slides or the recording, and information in a required regulatory filing. A LinkedIn post that promotes your services to your network reads like the first half. A purely educational article is a closer call that turns on what the rest of the page offers, and it is a judgment this checker does not make: it reads whatever you paste as copy that may be an advertisement. Our guide to what counts as advertising for an adviser works through the edge cases.

The seven general prohibitions

Paragraph (a) opens with "An advertisement may not:" and lists seven things. An advertisement may not (1) include an untrue statement of a material fact, or omit one that makes the rest misleading; (2) state a material fact the adviser has no reasonable basis to believe it could substantiate "upon demand by the Commission"; (3) create an untrue or misleading implication about a material fact relating to the adviser; (4) discuss potential benefits without "fair and balanced treatment" of the material risks and limitations; (5) refer to specific investment advice in a way that is not fair and balanced; (6) include, exclude or time performance results unfairly; or (7) "Otherwise be materially misleading."

Only the first four have phrases a pattern can find, and even then only the flagrant ones. "Guaranteed returns" is an untrue statement or an unsubstantiated one in almost any context. "Risk-free" and "can't lose" discuss a benefit with no treatment of risk at all. The rest of paragraph (a) is about proportion, placement and what was left out, which no list of phrases can judge.

Rule 206(4)-1, element by element

No guide we found maps the parts of an adviser's website to the paragraph each one engages, so here is that map, with what this checker does about each. The paragraph numbers are the regulation's own.

Read down the right-hand column and the honest shape of the tool is plain: it is strong on the claims a regulator would call out in one sentence, and silent on everything that depends on a number, a layout or a relationship. That is the half a compliance review is for.

Why implied SEC approval is a hard flag

Section 208(a) of the Advisers Act makes it unlawful for a registered adviser "to represent or imply in any manner whatsoever that such person has been sponsored, recommended, or approved, or that his abilities or qualifications have in any respect been passed upon by the United States or any agency or any officer thereof." Section 208(b) keeps the true statement open: saying you are registered is fine "if such statement is true in fact and if the effect of such registration is not misrepresented." The Marketing Rule repeats the point for performance at (d)(3), which bars any statement, express or implied, that the calculation or presentation of performance "has been approved or reviewed by the Commission."

So the pack's rule is built around the difference between the two verbs. "Registered with the SEC" and "SEC-registered" never match and pass. "SEC-approved", "approved by the SEC", "the SEC has approved our firm" and "endorsed by the SEC" are hard, with no override, and saying "registered investment adviser" in the same sentence does not excuse them. "Reviewed by the SEC" is a separate rule at review tier, because it can be literally true of an examination while still implying the SEC passed on your abilities. The rule still keys on words: "the regulator signed off on our firm" is not flagged. Read your About page for the claim, not only for the words.

Testimonials and endorsements under the Marketing Rule

The old advertising rule was widely read as a ban on testimonials, which is why guides written before 2021 still say an adviser cannot use them. The current rule allows them on conditions. A testimonial is a statement by a current client about their experience with the adviser, or one that solicits or refers clients; an endorsement is the same from anyone who is not a current client. Under paragraph (b)(1), the adviser must disclose "clearly and prominently" whether the person is a client, whether they were paid in cash or otherwise, and a brief statement of any material conflict of interest, with the material terms of any pay arrangement alongside.

Paying for a testimonial adds more. The adviser needs a reasonable basis to believe it meets the rule and a written agreement with the promoter describing the activities and the pay, unless the pay is de minimis, which the rule defines as $1,000 or less over the preceding 12 months. And it may not pay a person it knows, or should know, is ineligible because of a disqualifying event within the last ten years. The SEC staff added an answer on exactly that in its Marketing Rule FAQ on January 15, 2026, about final orders from self-regulatory organizations.

None of that is a phrase. Whether a quote comes from a client, whether anyone was paid, and whether the disclosure is prominent where it sits are facts about the relationship and the layout. This checker does not flag testimonials at all; the pack's changelog records the testimonial-disclosure rule as deferred to a future check. Third-party ratings under paragraph (c) work the same way: a "Five Star" badge needs the date it was given and the period it covers, who created the rating, and any pay for obtaining or using it, disclosed clearly and prominently.

Hypothetical performance under the Marketing Rule

Hypothetical performance means "performance results that were not actually achieved by any portfolio of the investment adviser." The rule names three kinds: results from model portfolios, backtested results, and "targeted or projected performance returns". That last item catches more adviser copy than people expect: a target return in a strategy description is hypothetical performance. Under (d)(6) it may appear only if the adviser has policies to make it relevant to the likely financial situation of the intended audience, explains the criteria and assumptions behind it, and explains its risks and limitations. An interactive planning tool that a client runs for themselves is outside the definition, if the adviser describes its method, says results vary, and says the outcomes are hypothetical.

Actual performance carries its own conditions. Gross performance may appear only with net performance "with at least equal prominence", over the same period and method. Results for a portfolio or composite, other than a private fund, need 1, 5 and 10-year periods of equal prominence ending no earlier than the most recent calendar year-end. Extracted performance needs the total portfolio's results offered alongside. On net figures, the January 15, 2026 FAQ also says that showing net performance after actual fees, when the audience will pay more, is not automatically a breach: it depends on all the facts, including the disclosures. A text checker can do none of this arithmetic. What it can do is flag the promise that no presentation can fix, such as "guaranteed performance".

Keep a copy: the recordkeeping side

The Marketing Rule sits beside a books-and-records rule, 17 CFR 275.204-2. Paragraph (a)(11) requires a copy of each advertisement the adviser disseminates, and (a)(16) the records needed to demonstrate how any advertised performance was calculated. Both are kept for at least five years from the end of the fiscal year in which the advertisement was last disseminated, the first two in an appropriate office of the adviser. This checker keeps nothing, so a run is not a record: save the published version and your review notes the way your firm already does.

A real run: a disclosure written for a different rule

The adviser disclaimer in this pack looks for phrases that carry an adviser's legal weight: “informational”, “recommendation” or “solicitation”, “loss of principal”, “past performance”, “does not imply” and “written agreement”. The disclosure a firm already has is often written for something else. Willowdale Equity, the syndication firm run by Verand's founder, says on its homepage that it is not a registered investment adviser, and its Important Disclosures block was written for Regulation D offerings. Below, that block as published, checked against the adviser pack. No banned claim matched, and the adviser disclaimer was flagged, because a Reg D disclosure does not say what an adviser's must. For a firm that is both an adviser and a sponsor, that is the gap to look at: one disclosure rarely serves both rules. The Reg D Advertising Rules Checker reads the same block against the rules it was written for.

Common mistakes on adviser sites

• Calling registration approval. "SEC-approved", "SEC-certified" or a regulator's logo beside your name. Say "registered with the SEC", and never imply registration speaks to skill.
• Gross in the headline, net in the footnote. Paragraph (d)(1) asks for net "with at least equal prominence", in a format that makes comparison easy. A footnote is not equal.
• A target return in the strategy blurb. Targeted and projected returns are hypothetical performance under (e)(8), with conditions attached, even when no chart shows them.
• An award badge with nothing beside it. A third-party rating needs its date, its period and who created it, and whether you paid to get or use it.
• A review feed with no disclosures. Client quotes on your site are testimonials, and the rule's disclosures belong with them.
• "Fee-only" when anyone related earns a commission. The CFP Board lets a CFP professional use the term only if neither the professional nor the firm receives sales-related compensation, and related parties receive none in connection with services to clients. The checker raises a warning, since it cannot see your pay arrangements.
• Treating a clean result as sign-off. It means none of the listed patterns matched. The rule's hardest questions are the ones the table above marks "not read".