Advisors and firms wrestling with the SEC’s marketing rule now have a little more clarity. The agency has released a summary of findings from examinations related to its marketing rule, revealing both progress and significant missteps by financial advisers in adhering to the guidelines.
The risk alert from the Securities and Exchange Commission's Division of Examinations shows that while many advisers strive to comply with the rule, several concerning practices persist.
The findings point to numerous instances of noncompliance, ranging from unsubstantiated claims to misleading advertising tactics, raising concerns about the transparency and accuracy of information available to investors.
"Advisers generally included Marketing Rule processes in their compliance policies," the SEC noted, acknowledging the efforts made by many firms to follow the rule.
However, the division also reported common shortcomings in policies and procedures around marketing rule compliance. These gaps include using broad descriptions rather than specific guidelines, a lack of coverage for all marketing channels, and policies that the regulator said were overly informal or outdated.
The alert also raised alarms on untrue statements and misleading information within advertisements. Among several examples, the SEC pointed to advisors claiming to be "free of all conflicts" when actual conflicts existed, and misrepresentations about the advisors' qualifications and services.
Some advisors also went offside by playing up the nature of their investment processes or services, the regulator said, with claims that they adhere to nonexistent ethical standards or falsely stating that they follow ESG investment mandates.
The SEC flagged cases of firms misusing its logo and taking its name in vain, with advertisements that went “beyond factual statements [about an advisor’s] registration status ... to imply that SEC registration was representative of a particular level of skill or ability.”
The alert emphasized deficiencies related to the preservation of advertisement-related documents, with some advisors “not [maintaining] copies of information posted to social media," and "not [maintaining] documentation to support performance claims included in advertisements.”
The examinations also revealed deficiencies in Form ADV filings, specifically around advisors’ advertising practices, including failing to disclose their use of third-party ratings to promote themselves, and not declaring when they used hypothetical or actual performance results in their marketing materials and ads.
“The [Division of Examinations] encourages advisers to reflect upon their own practices, policies, and procedures and to implement any appropriate modifications to their training, supervisory, oversight, and compliance programs,” the SEC said.
The SEC has made compliance with the marketing rule a regulatory priority, sending a strong signal to the industry last week with an enforcement sweep that caught five firms.
Canadian stocks are on a roll in 2025 as the country prepares to name a new Prime Minister.
Two C-level leaders reveal the new time-saving tools they've implemented and what advisors are doing with their newly freed-up hours.
The RIA led by Merrill Lynch veteran John Thiel is helping its advisors take part in the growing trend toward fee-based annuities.
Driven by robust transaction activity amid market turbulence and increased focus on billion-dollar plus targets, Echelon Partners expects another all-time high in 2025.
The looming threat of federal funding cuts to state and local governments has lawmakers weighing a levy that was phased out in 1981.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
