Marketing Rule Enforcement Trends

Three years ago, the SEC made waves in the long-established regulatory landscape for investment advisers. The new Investment Adviser Marketing Rule impacts nearly every communication an adviser makes, which has major implications for day-to-day operations.

The SEC has said that compliance with the Marketing Rule is among its 2025 enforcement priorities -- and it was a 2024 enforcement priority before that. Enforcement has followed.

In September of 2023, the SEC announced charges against nine advisers for issues including unsubstantiated claims in advertisements and improper use of testimonials and endorsements (by failing to include required disclosures).

In April of 2024, the SEC brought actions against five advisers for advertising hypothetical performance to the general public without limiting distribution to sophisticated investors who understand the limitations of hypothetical performance.

And then in November 2024, the SEC charged another RIA for using paid athlete endorsements without the required disclosures and for advertising hypothetical performance to the general public.

Taken together, these sample actions show an enforcement trend around three areas that advisers can proactively address:

1. Testimonials and Endorsements: Advisers should make sure that all required disclosures are included and that compensation and conflicts are accurately described.

2. Hypothetical Performance: Advertisements should only use hypothetical performance when it’s relevant to the intended audience, and when that audience is sufficiently sophisticated to understand its limitations.

3. Substantiating claims: This goes back to the time-tested compliance mantra, "If you can't prove it, don't say it."

The Marketing Rule isn’t just a box to check -- rather, it’s a lens through which the SEC is scrutinizing adviser communications. Firms that treat compliance as part of their marketing strategy, not an afterthought, will be best positioned to avoid issues on compliance exams.