Revisiting the Marketing Rule | Vigilant Insights
Vigilant Insights
Introduction
The SEC Marketing Rule has been in effect for several years, giving Advisers time to implement the requirements and the SEC time to examine how Firms are applying the Rule.
SEC examination observations show that Marketing Rule Compliance remains an area of focus, particularly around advertising reviews, testimonials and endorsements, third-party ratings, performance, disclosures, and books and records.
For Advisers, Marketing Rule Compliance should be viewed as an on-going process, not a one-time implementation exercise.
What We Have Learned
The SEC’s examination experience has highlighted several recurring areas of concern:
- Policies and Procedures: Policies should reflect the Firm’s actual marketing activities and be consistently followed.
- Testimonials & Endorsements: Required disclosures must be provided appropriately, and Firms should understand their responsibilities when using promoters, referral arrangements, or social media influencers.
- Third-Party Ratings & Awards: Firms should conduct appropriate due diligence and maintain supporting documentation when using rankings or awards.
- Performance Advertising: Gross and net performance, hypothetical performance, and other performance information require careful review and appropriate presentation.
- Books & Records: Firms should be able to demonstrate how marketing materials were reviewed and substantiate the information presented.
Key Focus Areas
When reviewing their Marketing Rule Compliance Programs, Advisers should consider:
- Advertising Review: Are all marketing materials reviewed before dissemination?
- Performance: Are performance presentations consistent with the Marketing Rule?
- Testimonials & Endorsements: Are required disclosures and oversight procedures in place?
- Third-Party Ratings: Has the firm completed appropriate due diligence?
- Social Media: Are social media and other digital marketing activities included in the compliance process?
- Books & Records: Is the firm retaining appropriate documentation?
- Form ADV: Do the firm’s disclosures accurately reflect its marketing practices?
- Testing: Is the firm testing whether its Marketing Rule policies are working as intended?
How Vigilant Can Help
Vigilant works with Investment Advisers to help develop, implement, and maintain practical Marketing Rule Compliance Programs.
Our Advertising Review Services can assist Firms with reviewing marketing materials before dissemination, including performance advertising, pitchbooks, websites, social media, presentations, and other communications.
Vigilant can also assist with:
- Marketing Rule Policy and Procedure Reviews
- Marketing Material and Advertising Reviews
- Performance Advertising Reviews
- Testimonials and Endorsement Reviews
- Third-Party Rating and Award Reviews
- Marketing Rule Disclosure Reviews
- Books and Records Considerations
- Form ADV Marketing Disclosures
- Mock Examinations focused on Marketing Compliance
- On-Going Compliance Monitoring and Testing
With the SEC continuing to focus on Marketing Rule Compliance, Firms should consider whether their current program reflects how they actually market their services today, not simply how the program was designed when the Rule was first implemented.
Vigilant can help advisers revisit their Marketing Rule Program, identify potential gaps, and strengthen their overall Advertising Review and Compliance Process.