SEC Marketing Rule: New Guidance 2024
- Teh Securities and Exchange Commission (SEC) has provided updated guidance on its revised marketing rule, responding too industry requests for clearer instructions regarding investment advisor marketing.
- In a recent FAQ release, the SEC addressed several points of ambiguity.
- Registered investment advisory (RIA) firms can now showcase only gross performance for specific periods—without including net performance—if certain conditions are met.
The SEC unveils new guidance on its investment advisor marketing rule, offering clarity on crucial points. The agency clarifies the rule, allowing advisors more flexibility with performance figure calculations, a win for the financial industry. Registered investment advisory (RIA) firms now have clearer guidelines on showcasing gross performance. The SEC also signals it will allow advisors to showcase gross characteristics if disclosed, a step toward enhanced transparency. This updated rule impacts how investment advisors create marketing materials, ensuring alignment with compliance. In 2023, enforcement led to fines, highlighting the importance of adhering to updated guidelines. News directory 3 brings you the latest on these developments. Discover what’s next …
SEC Issues New Guidance on Investment Advisor Marketing Rule
Updated May 26, 2025
Teh Securities and Exchange Commission (SEC) has provided updated guidance on its revised marketing rule, responding too industry requests for clearer instructions regarding investment advisor marketing. The rule, initially adopted in 2020 and effective since November 2022, permits testimonials and endorsements, but it also imposes stricter standards for performance reporting and mandates enhanced disclosures.
In a recent FAQ release, the SEC addressed several points of ambiguity. The agency clarified that advisors must adhere to the amended rule in its entirety. However,the SEC is allowing firms to compute one-,five-,and ten-year performance figures within one month after the end of the calendar year,offering some flexibility in calculating investment performance.
Registered investment advisory (RIA) firms can now showcase only gross performance for specific periods—without including net performance—if certain conditions are met. The SEC also signaled it would allow advisors to present gross characteristics (without subtracting fees and expenses), provided this is clearly disclosed and other presentation criteria are satisfied.These clarifications aim to help firms navigate the complexities of investment advisor marketing.
The SEC stressed that RIAs must use identical methodologies and timeframes for both gross and net performance when advertisements feature both.
In 2023, the SEC conducted an enforcement sweep targeting violations of the updated marketing rule, resulting in fines for noncompliant RIAs. The SEC’s focus on investment advisor marketing underscores the importance of adhering to the updated guidelines.
What’s next
The SEC’s updated guidance is expected to help investment advisors better understand and comply with the marketing rule,reducing the risk of investor confusion and facilitating the sharing of crucial data.