SEC Marketing Rule Explained for RIAs (2026 Guide)

The SEC Marketing Rule (Rule 206(4)-1 under the Investment Advisers Act of 1940) governs how SEC-registered investment advisers advertise. It replaced the old advertising and cash solicitation rules, permits testimonials and endorsements with disclosures and oversight, and imposes strict performance-presentation standards. Compliance has been mandatory since November 4, 2022.

Three-plus years in, the rule is no longer new, but it keeps moving. SEC staff issued significant FAQ guidance in March 2025 and again in January 2026, and the Division of Examinations published its fourth Marketing Rule risk alert in December 2025. Most explainers online stopped updating at the compliance date. This guide covers the rule as it stands in mid-2026, written for RIA principals and CCOs, with the rule text and SEC releases cited throughout.

What is the SEC Marketing Rule?

The Marketing Rule is 17 CFR 275.206(4)-1, adopted under the antifraud authority of the Investment Advisers Act. The SEC adopted it on December 22, 2020 in the adopting release IA-5653, merging and replacing two long-standing regimes: the advertising rule adopted in 1961 and the cash solicitation rule adopted in 1979 (former Rule 206(4)-3). It became effective May 4, 2021, with a compliance date of November 4, 2022.

The rule applies to investment advisers registered, or required to be registered, with the SEC. Exempt reporting advisers are outside its scope (though still bound by the Advisers Act antifraud provisions), and state-registered advisers follow state advertising rules instead, many of which borrow heavily from the SEC's approach.

The trade the rule made: advisers gained the ability to use testimonials, endorsements, and third-party ratings, which the old regime effectively banned. In exchange, they took on principles-based prohibitions, prescriptive performance standards, and a heavier documentation burden.

What counts as an "advertisement"?

The rule's definition has two prongs, and the answer decides everything downstream.

Prong one covers any direct or indirect communication an adviser makes to more than one person (or to one person, if it contains hypothetical performance) that offers advisory services to prospective clients or new services to existing clients. Three things are excluded: extemporaneous, live, oral communications; information required in statutory or regulatory filings; and hypothetical performance provided in response to an unsolicited request or in one-on-one communications with private fund investors.

Prong two covers any testimonial or endorsement for which the adviser provides compensation, directly or indirectly, cash or non-cash. A paid promoter's Instagram post is an advertisement under this prong even though the adviser didn't write it.

In practice, an RIA's website, pitch decks, fact sheets, webinar slides, mass emails, and most social media activity are advertisements. A live, unscripted answer at a conference is not. A one-on-one email to a single prospect generally is not, unless it contains hypothetical performance.

What are the seven general prohibitions?

Every advertisement, whatever its format, must clear seven principles-based prohibitions in paragraph (a) of the rule. An advertisement may not:

1. Include an untrue statement of material fact, or omit a fact necessary to make the statement not misleading.
2. Include a material statement of fact the adviser cannot substantiate upon demand by the SEC.
3. Include information that would reasonably cause an untrue or misleading implication or inference about the adviser.
4. Discuss potential benefits without fair and balanced treatment of material risks and limitations.
5. Reference specific investment advice in a way that is not fair and balanced (no cherry-picking winners).
6. Include or exclude performance results, or present time periods, in a manner that is not fair and balanced.
7. Otherwise be materially misleading.

Notice what prohibition 2 does: it flips the burden. If your website says "we reduce clients' tax bills by an average of 20%," you need the substantiation file ready before the SEC asks, not after.

How do testimonials and endorsements work now?

Testimonials (from clients) and endorsements (from non-clients) are permitted in advertisements if the adviser satisfies three sets of conditions under paragraph (b):

• Disclosures. The advertisement must clearly and prominently disclose whether the promoter is a client, that compensation was provided (if it was), and a brief statement of material conflicts of interest. The December 2025 risk alert specifically flagged burying these in hyperlinks or small print as a deficiency.
• Oversight and written agreement. The adviser must have a reasonable basis for believing the testimonial or endorsement complies with the rule, and must have a written agreement with the promoter describing the scope of activities and compensation terms. Two exceptions: promoters who receive $1,000 or less (or equivalent non-cash value) during the preceding 12 months, and the adviser's own partners, officers, directors, and employees whose affiliation is readily apparent or disclosed and documented.
• Disqualification. An adviser may not compensate a promoter it knows, or reasonably should know, is an "ineligible person" due to a disqualifying SEC action or event (generally looking back 10 years). A January 2026 staff FAQ extended a conditional carve-out to certain final orders of self-regulatory organizations, provided the order did not bar or suspend the person, the person complies with its terms, and the advertisement discloses and links to the order.

Compensated reviews, referral arrangements, influencer promotions, and client reviews the firm solicits or republishes can all land here. An organic, uncompensated Google review is generally not the adviser's advertisement, but it can become one once the firm compensates the reviewer, prompts the content, or adopts it as its own marketing. And a solicitor arrangement that used to live under the cash solicitation rule is now an endorsement; the old solicitor disclosure documents don't satisfy the new requirements on their own.

What are the performance advertising requirements?

Paragraph (d) is the most prescriptive part of the rule. The baseline requirements:

The hypothetical performance row deserves special attention, because it is the theory behind most of the enforcement to date. Displaying model or backtested returns to an unrestricted public audience makes the required audience-relevance analysis difficult at best, and the SEC's sweeps charged firms that presented hypothetical performance to mass audiences without adopting and implementing the required policies.

What did the 2025 and 2026 staff FAQs clarify?

In two recent rounds of FAQs, SEC staff described conditional circumstances in which it would not recommend enforcement action on performance presentations and promoter disqualification. A precision point that matters to CCOs and counsel: the Marketing Compliance FAQs are staff views, not amendments to the rule, and they create no new legal obligations. They do describe how the people who examine you read the rule, which makes them required reading.

March 19, 2025: a conditional staff position on gross-only extracted performance and characteristics. Reversing earlier staff positions, the staff said it would not recommend enforcement action if an adviser presents extracted performance (individual positions or subsets) or portfolio and investment characteristics (yield, volatility, sector returns, and similar metrics) on a gross basis without corresponding net figures, provided four conditions are met: the figures are clearly identified as gross of fees and expenses; they are accompanied by the total portfolio's gross and net performance; that total portfolio performance has at least equal prominence and facilitates comparison; and it covers the same period. The staff declined to say whether any given characteristic is "performance," but confirmed total return, IRR, and MOIC definitely are.

January 15, 2026: model fees and an SRO carve-out. One FAQ clarified that the adopting release's footnote on model fees is not categorical: whether actual or model fees are appropriate when anticipated fees exceed actual fees is a facts-and-circumstances question that disclosure can address. The other extended the staff's conditional disqualification relief described above to certain SRO final orders.

If your performance policies were last reviewed before March 2025, they may be stricter than the staff's current positions in some places and stale in others. That is worth an annual-review agenda item.

What about third-party ratings?

An advertisement may include a third-party rating only if the adviser has a reasonable basis for believing the underlying questionnaire was structured to make favorable and unfavorable responses equally easy and was not designed to produce a predetermined result, and the ad clearly and prominently discloses the rating's date and period, the identity of the third party, and any compensation the adviser provided in connection with it.

The December 2025 risk alert found firms doing neither: no diligence file on the rating methodology, and ads missing the date or the fact that the adviser paid to participate. "Best advisor" badges are easy traffic for examiners.

What records does the Marketing Rule require?

The companion amendments to Rule 204-2, the books-and-records rule, require advisers to keep copies of every advertisement disseminated, along with specified supporting records: performance calculation workpapers, documentation of promoter status and affiliations, written agreements with promoters, and third-party rating questionnaires or surveys. On top of what the rule enumerates, keep a substantiation file for every material factual claim in an advertisement. That one is prudent practice rather than an enumerated record, but the Marketing Rule's second prohibition makes a claim you cannot substantiate on demand a violation, so the file is what saves you. Form ADV Part 1A also asks a series of yes/no questions (Item 5.L) about whether the adviser's advertisements include performance, testimonials, endorsements, ratings, or hypothetical performance, which examiners use to target reviews.

The operational takeaway: every marketing piece needs a review-and-approval trail plus a substantiation file, kept in a place you can produce on demand. This is exactly the workflow RegFin's Marketing Reviews module manages, from submission and compliance review through approval, with the documentation trail generated as a byproduct.

What are examiners and enforcement focusing on?

The Marketing Rule has produced steady enforcement since the compliance date. Three sweeps so far:

• September 11, 2023 (Press Release 2023-173): nine advisers charged for advertising hypothetical performance on public websites without the required policies. Combined penalties: $850,000, with individual fines from $50,000 to $175,000.
• April 12, 2024 (Press Release 2024-46): five advisers, same hypothetical-performance theory. Combined penalties: $200,000.
• September 9, 2024 (Press Release 2024-121): nine advisers charged over untrue or unsubstantiated statements and testimonials, endorsements, or third-party ratings lacking required disclosures. Combined penalties: $1,240,000.

Alongside enforcement, the Division of Examinations has issued four Marketing Rule risk alerts, most recently in December 2025. The April 2024 alert catalogued deficiencies across the board: unwritten or unimplemented policies, net-only or otherwise non-compliant performance presentations, five-year-old market data, "conflict-free" claims from conflicted firms, and inaccurate Form ADV marketing responses. The December 2025 alert narrowed the focus to testimonials, endorsements, and third-party ratings: disclosures hidden behind hyperlinks, missing written agreements, promoters the firm never vetted for eligibility, and ratings used without any methodology diligence.

Read together, the pattern is clear. Examiners moved from "do you have policies?" to "show me the disclosure, the agreement, and the diligence file for this specific ad."

The December 2025 alert also spells out the standard in the SEC's own words. Quoting the adopting release, the staff reminded firms that "in order to be clear and prominent, the disclosures must be at least as prominent as the testimonial or endorsement," and that "the clear and prominent standard requires that the disclosures be included within the testimonial or endorsement," so a hyperlink to the disclosures does not satisfy the rule.

A practical self-check for an RIA: inventory every live advertisement (website, social profiles, decks, one-pagers); confirm each performance presentation has net figures, the prescribed periods, and a calculation file; pull the written agreement and disclosure for every compensated promoter; and confirm your Form ADV Item 5.L answers still match reality. If you're building the broader program around this, start with our RIA compliance guide and RIA compliance requirements explainer, or work from the RIA compliance checklist. Marketing is not the only area under the exam spotlight this year: our Regulation S-P guide covers the data-security and breach-notification rule the 2026 exam priorities call out by name.

The bottom line for RIAs

The Marketing Rule gave advisers marketing tools the industry wanted for decades, and attached a compliance discipline to each one. Testimonials need disclosures, agreements, and eligibility checks. Performance needs net figures, prescribed periods, and substantiation. Ratings need diligence. And a program that hasn't been reviewed against the 2025-2026 staff FAQs may no longer match current staff positions or examination observations. The firms getting fined are not the ones marketing aggressively; they are the ones marketing without the paper trail.

RegFin's Marketing Reviews module gives RIAs a submission-to-approval workflow for every advertisement, with AI-assisted review against the Marketing Rule and an exam-ready documentation trail. Request a demo to see it on your own marketing materials.