Rule 206(4)-1 has been fully enforceable since November 2022, and the SEC has been active. Nine advisers were charged in September 2024, and five more were charged in April 2024 specifically for hypothetical performance advertising. The SEC Marketing Rule governs every content channel an RIA touches: podcasts, LinkedIn, video, email, website copy, and pitch decks. If you’re running a content programme without a precise understanding of what the rule permits and prohibits, you’re producing advertisements the SEC can examine and charge against.
This article isn’t a substitute for legal counsel. It’s a working reference for executives and marketing directors who need to understand the rule’s specific requirements well enough to make content decisions confidently and proactively.
What Does the SEC Marketing Rule Actually Cover?
The SEC Marketing Rule defines “advertisement” broadly as any written or oral communication an adviser makes to more than one person that offers advisory services. That covers website copy, social media posts, podcast episodes, email campaigns, video content, and pitch materials. The rule has two prongs: direct communications from the adviser, and paid or solicited testimonials and endorsements. Every content format finance companies use sits inside this framework.
The rule replaced two outdated regulations that governed advertising and cash solicitation separately. The principles-based replacement is broader in scope and more actively enforced. Advisers who read the old rules as their guide to what’s permitted are operating on incorrect assumptions.
The seven general prohibitions cover:
- Untrue statements
- Omission of material facts
- Unsubstantiated claims
- Misleading implications
- References to specific investment advice that aren’t presented fairly and in context
- Statements the adviser doesn’t have a reasonable basis to believe it can substantiate
- Advertisements that include or exclude performance results in a way that isn’t fair and balanced
These prohibitions apply to every piece of content, regardless of format.
One practical consequence: an RIA that publishes a blog post making a general claim about investment approach or team experience must be able to substantiate that claim on SEC request. The SEC doesn’t pre-clear content, but the documentation has to exist before publication.
For advisers building out financial advisor marketing programmes across multiple channels, mapping every active content format against these prohibitions is the first operational step.
What Are the Rules on Testimonials and Endorsements?
Testimonials from current clients and endorsements from third parties are now permitted under the SEC Marketing Rule, provided specific conditions are met. The required disclosures include:
- Whether the person is a client or is compensated
- Any material conflicts of interest
- For compensated promoters, a written agreement (with an exception for compensation under $1,000 in a 12-month period)
The adviser must also have a reasonable basis to believe the testimonial or endorsement complies with the rule.
This is the single most commercially significant change from the prior regime, and it has direct implications for content formats that finance companies are actively using.
Take podcasts. A client who appears as a guest to discuss their experience working with the adviser is giving a testimonial under the rule. That episode requires disclosures in the audio itself and in any accompanying written materials, including show notes, episode descriptions, and social posts promoting the episode. An industry peer who appears to discuss general market conditions or investment themes is giving commentary, and the distinction determines whether disclosures are required. That determination should be made before production begins, with compliance integrated at the planning stage.
The same logic applies to social media. A client leaves a positive comment on a LinkedIn post about the adviser’s services. The adviser reposts it. That repost is a testimonial the adviser is now responsible for disclosing appropriately. The act of amplification is the trigger.
TPC Recommendation: Before any client guest appears on an RIA podcast, the compliance workflow should answer three questions: Is this person being compensated in any form? Will they discuss their experience as a client? Does the episode description or promotion reference the client relationship? If any answer is yes, disclosures need to be in the episode and in all written assets before the episode publishes. Guest briefing documents should flag this explicitly so the host isn’t navigating it in the recording.
There’s also a disqualification provision. Advisers can’t use testimonials or endorsements from people subject to certain disqualifying events, including specific regulatory actions, criminal convictions, and similar circumstances. Vetting guests who will discuss their client experience isn’t just a content quality decision. It’s a compliance requirement.
“There are compliance hurdles in our industry that you have to be acutely aware of. Missing a sentence that we asked to be removed from an episode could actually cause an issue with regulators. Making sure that our partner pays as close attention to details as we would in those situations is super important.”
Colby Donovan, The Meb Faber Show, Cambria Funds
Why Is Hypothetical Performance the Highest-Risk Category?
Hypothetical performance advertising has generated the majority of SEC enforcement actions since November 2022. Hypothetical performance covers any results not actually achieved by a portfolio the adviser managed, including backtested returns, model portfolios, target returns, and projected performance. The rule doesn’t prohibit it, but the conditions for permissible use are specific and the enforcement record shows advisers consistently getting this wrong.
The core condition: advisers must adopt and implement policies and procedures reasonably designed to ensure the hypothetical performance is relevant to the likely financial situation and investment objectives of the intended audience. This isn’t a disclosure-only fix. The policies have to exist and be implemented before the content is published.
The pattern the SEC charged in April 2024 was specific: five advisers placed hypothetical performance data on public-facing websites accessible to retail investors, without demonstrating that those investors met the intended-audience condition. General public distribution is the trigger. For example, a model portfolio return figure on a website’s strategy page or a backtested chart in a downloadable PDF available to anyone who visits the site are the formats that have been charged.
Required disclosures when hypothetical performance is presented include:
- The hypothetical nature of the results
- The limitations of hypothetical performance
- The material conditions, objectives, and assumptions used to generate the results
These disclosures have to be clear and prominent, presented in plain sight and not buried in fine print.
For advisers running content programmes that include strategy-focused podcast episodes or articles, an episode discussing how a model portfolio would have performed over a historical period is presenting hypothetical performance. It requires the same policies, procedures, and disclosures as a website chart. Audio and video content don’t get different treatment under the rule.
TPC Recommendation: Any podcast episode that touches historical model returns or backtested strategy results should go through compliance review before it’s recorded. The script or episode outline is the right checkpoint, with compliance integrated at the planning stage. Catching a hypothetical performance issue in a finished episode means either re-recording or cutting content that the host may have spent significant time developing. Getting compliance into the production workflow at the planning stage is cheaper and faster.
What Conditions Apply to Third-Party Ratings?
Third-party ratings, awards, and survey-based rankings are permitted under the SEC Marketing Rule with four required disclosures:
- The date and time period covered by the rating
- The identity of the third party that created it
- Whether the adviser paid for the rating or for participation in the process that generated it
- Whether the adviser has a reasonable basis for believing the questionnaire or methodology wasn’t designed to produce a biased or predetermined result
The enforcement record here is specific. The September 2024 sweep charged nine advisers for displaying “Top Adviser” designations and similar ratings without disclosing that they paid an entry fee to be considered for the award. Displaying a “Best-Of” badge in a website header or email signature without the required disclosures is a charged pattern and a demonstrated compliance risk.
For advisers who include ratings or awards in podcast episode descriptions, show artwork, or promotional social content, the disclosure requirements apply to those formats as well. The channel doesn’t change the obligation.
What Are the Substantiation and Recordkeeping Requirements?
Substantiation and recordkeeping are the operational layer that sits under every advertisement the firm produces, regardless of format.
On substantiation: the adviser must be able to substantiate any material statement of fact upon SEC request. The SEC doesn’t review content before publication, but the documentation must exist at the time of publication, built into the process from the start. Claims about investment approach, historical track record, team credentials, and client outcomes all require substantiation. The February 2026 Marketing Compliance FAQs clarified that net performance based on model fees is permissible if the overall presentation remains fair, balanced, and accurate, and if documentation supports the fee methodology used.
On recordkeeping: advisers must retain:
- Copies of all advertisements
- Written agreements with compensated promoters
- Records of performance information used in any performance advertisement
The standard Investment Advisers Act retention periods apply, generally five years, with the first two years in an easily accessible place.
For firms running active content programmes, this creates a real operational requirement. Weekly podcast episodes, LinkedIn posts, video series, and email newsletters each count as advertisements. Every published piece needs to be archived. Any episode that includes a compensated endorser needs the written agreement on file, and any episode that presents performance data needs the underlying performance records retained.
A content programme without a documented review and archival workflow isn’t just disorganised. It’s out of compliance. The review step doesn’t have to be slow. Advisers with well-designed compliance workflows can turn around episode approvals in 24 to 48 hours, but the workflow has to be documented, consistent, and applied to every format the firm uses.
This is exactly the operational area that The Podcast Consultant is built to address for RIAs. The compliance review step, guest briefing process, and disclosure workflow are built into the production process, handled before the client ever encounters it as a post-production problem.
What Does the SEC Marketing Rule Mean for Your Content Programme?
Pulling the operational implications together for an executive making decisions about a content programme:
Podcasts and video: Every episode where a client discusses their experience with the adviser is a testimonial. Disclosures must appear in the episode audio and in all written materials, including show notes, episode descriptions, and promotional posts. Guest selection and briefing documents sit inside the compliance workflow. If you’re running a podcast as part of your RIA marketing strategy, every episode with a client guest needs a compliance checkpoint before recording.
Social media: Amplifying client comments constitutes endorsement. A client praising your service in a LinkedIn comment that you then share triggers the testimonial disclosure requirements. The scale of your social activity is the scale of your compliance exposure. Financial advisor social media strategies need to account for this explicitly.
Performance content: Any episode, article, or post referencing historical returns, model performance, or projected outcomes requires the hypothetical performance conditions to be met if the results didn’t come from actual client accounts. Substantiation documentation is required regardless.
The advisers who market well under this rule are the ones who’ve built the compliance step into production, treating it as a production requirement rather than a gate applied after content is already created. A podcast built on content marketing for financial advisors principles can work effectively within the rule’s framework. It just requires that the workflow is designed around those requirements from the start.
“Unless there’s a compliance issue on behalf of the guest. I can just do a single recording and let it rip.”
Steve Curley, Investors First Podcast (CFA Orlando), CFA Orlando / 55 North Private Wealth
The practical upshot: the SEC Marketing Rule expanded what advisers can do in their marketing. Testimonials are permitted. Endorsements are usable. Performance advertising has a clear framework. That expanded permission comes with specific conditions, and the enforcement record shows the SEC is actively checking. Advisers who treat the rule as a usable framework will run more effective content programmes than competitors who default to saying no to anything that touches client experience or performance data.
See how The Podcast Consultant helps finance companies build podcasts that generate real business results. Book a discovery call
Frequently Asked Questions
What is the SEC Marketing Rule?
The SEC Marketing Rule is Rule 206(4)-1 under the Investment Advisers Act of 1940. It replaced two older regulations, the 1961 Advertising Rule and the 1979 Cash Solicitation Rule, with a single principles-based framework that became fully enforceable in November 2022. It governs how registered investment advisers communicate with the market across every channel, including digital, audio, video, and written formats.
Can financial advisors use testimonials under the new rule?
Yes. Testimonials from current clients are now permitted, which wasn’t the case under the prior advertising rule. To use them, advisers must include clear disclosures identifying the person as a client, disclose any material conflicts of interest, and, if the client is compensated beyond $1,000 in a 12-month period, have a written agreement in place. The adviser must also have a reasonable basis to believe the testimonial complies with the rule.
Does a client appearing on an adviser’s podcast count as a testimonial?
If the client discusses their experience with the adviser or the advisory services received, yes. That appearance is a testimonial under the rule. It requires the same disclosures as any other testimonial: identification as a client, any compensation or material conflicts of interest, and a reasonable basis for believing the content complies. If an industry peer appears to discuss general market views without referencing their client relationship, that appearance is commentary and does not trigger testimonial disclosure requirements.
What is hypothetical performance, and why is it high risk?
Hypothetical performance covers any results not actually achieved by a portfolio the adviser managed, including backtested returns, model portfolios, target returns, and projected performance. It’s the highest-risk category because it has generated the majority of enforcement actions since November 2022. Advisers must adopt policies ensuring the content is relevant to the intended audience’s financial situation and objectives, include required disclosures, and avoid distributing it to the general public without meeting those conditions.
What happened in the April 2024 SEC enforcement actions?
The SEC charged five investment advisers specifically for advertising hypothetical performance on public-facing websites accessible to retail investors. These advisers had not demonstrated that their intended-audience policies were in place or adequate, and the performance data lacked required disclosures about its hypothetical nature. The April 2024 actions are the clearest signal of what “general public distribution” looks like as a charged pattern.
Are third-party ratings and awards permitted under the SEC Marketing Rule?
Yes, but with required disclosures: the date and time period covered by the rating, the identity of the third party that created it, whether the adviser paid for participation in the rating process, and a reasonable basis for believing the methodology wasn’t designed to produce a biased result. The September 2024 enforcement sweep charged nine advisers for displaying ratings without disclosing that they had paid entry fees, which is a specific and repeatable mistake.
What does the substantiation requirement mean in practice?
The adviser must be able to produce documentation supporting any material statement of fact in an advertisement upon SEC request. The SEC doesn’t review content before it goes live, but the documentation must exist at publication, built into the process from the start. Claims about investment track record, team credentials, client outcomes, and approach all require substantiation.
What records does an adviser have to keep under the SEC Marketing Rule?
Advisers must retain copies of all advertisements, written agreements with compensated promoters, and records of performance information used in any performance advertisement. The standard Investment Advisers Act retention periods apply, generally five years, with the first two years requiring easily accessible storage. For active content programmes, this means every published episode, social post, email, and video must be archived systematically.
Does the SEC Marketing Rule apply to email newsletters and social media?
Yes. Any written communication to more than one person that offers advisory services falls within the rule’s definition of advertisement. Email newsletters, LinkedIn posts, Twitter content, and social media reposts of client comments all qualify. The SEC has noted that social media campaigns bypassing compliance review are an area of active concern.
How does the February 2026 FAQ clarification affect performance advertising?
The SEC’s February 2026 Marketing Compliance FAQs clarified that net performance based on model fees, rather than actual fees charged, is permissible, provided the overall presentation remains fair, balanced, and accurate. The documentation supporting the fee methodology used must be on file. This is a practical clarification for advisers presenting strategy-level performance data rather than account-specific returns.