Marketing Rule Risk Alert | Laura Arnott Insights
Vigilant Insights
Introduction
On December 16, 2025, the SEC’s Division of Examinations issued a Risk Alert addressing on-going compliance weaknesses related to the Marketing Rule under Rule 206(4)-1.
This Risk Alert reflects examination findings indicating that RIAs continue to face challenges in operationalizing the Rule, especially regarding the proper use of testimonials, endorsements, and third-party ratings in advertising materials.
While many Firms updated their written compliance programs following the adoption and implementation deadlines of the Marketing Rule, the SEC found that many Advisers continue to fall short in demonstrating real-time integration of the Rule into their advertising oversight, approval, and documentation workflows. For Private Credit Managers who rely heavily on third-party ratings, client success narratives, and performance messaging, the Risk Alert functions as a clear reminder that policy frameworks alone are no longer sufficient.
The SEC emphasized that this Risk Alert is a targeted resource meant to communicate deficiencies the staff continues to observe and to encourage Advisers to enhance their compliance operations before exam and enforcement risk escalates.
One of Vigilant’s Directors, Laura Arnott, CFA, CIPM, IACCP, CTPRP, CRISC, was quoted in Alternative Credit Investor on this Risk Alert and her insights can be found below.
Laura Arnott Insights
Laura Arnott emphasized that the Risk Alert reinforces the need for RIAs to maintain active, on-going adherence to the Marketing Rule within their advertising and compliance processes, not just at rollout.
Laura noted that Advisers have taken steps to update their written programs, but it appears through this Risk Alert that many have not been able to show regulators how those written updates are operating in real time, aligning closely with the themes highlighted throughout the SEC’s alert.
She also pointed out that, even though enforcement tied directly to the Rule has not been widespread, the Risk Alert itself signals that Marketing Rule compliance remains a high-priority monitoring area for examiners. Firms should not mistake changes in SEC administration leadership or tone as a sign that the Marketing Rule will fade into the background.
Vigilant’s Conclusion
The SEC’s Marketing Rule Risk Alert reinforces that the Commission’s expectations are increasingly focused on execution rather than documentation alone. Advisers can no longer rely on updated policy language without an equal level of operational follow-through. From advertising review controls, to promoter oversight, to validation of third-party ratings and testimonials, the SEC is signaling that successful implementation depends not only on compliance design, but on measurable practice supported by evidence and recordkeeping.
For Private Credit Managers, where marketing efforts often rely on sophisticated performance narratives and external validation, this is a critical development. The areas highlighted in the Risk Alert included insufficient due diligence on third-party rating methodologies, missing disclosures around compensation and conflicts, and inadequate oversight of testimonial or endorsement arrangements, aligning with marketing approaches that are common in Private Credit fundraising.
The Risk Alert also communicates that examiners are testing for more than technical rule familiarity. They are assessing whether Firms can demonstrate functioning systems: documented pre-use reviews, maintained substantiation, clear approval trails, and periodic monitoring of promoters and referral relationships. In short, Advisers should anticipate deeper questioning around how their marketing engines work in practice, not just how policies read.
This Risk Alert should therefore be viewed as both a directional signal and an opportunity. Firms that take proactive steps to strengthen their operational controls, integrate Marketing Rule requirements into their workflow technology, retrain staff, and refresh documentation standards will be better positioned to withstand regulatory scrutiny. Those who do not may find themselves vulnerable not only during examinations, but in future enforcement initiatives as the SEC continues to refine its expectations under the Marketing Rule.
Ultimately, the SEC’s message is clear, effective Marketing Rule compliance must be on-going, measurable, and demonstrable, especially for Advisers in complex or performance-driven sectors.
Vigilant believes that Firms who evolve their practices will not only protect their regulatory standing, but also enhance the credibility and reliability of their marketing communications in an increasingly competitive market. Discover how Vigilant can strengthen your marketing review framework and deliver timely support in reviewing your materials to ensure alignment with your firm’s strategic goals and content objectives.