If you write or review marketing at an RIA or broker-dealer, you know the cycle: a draft goes to compliance, comes back with comments, gets revised, and goes back again. Most of those comments are about the same handful of issues.
The SEC Marketing Rule (Rule 206(4)-1) covers a lot of ground, but the problems that turn up in real advertisements are surprisingly consistent.12 Here are five checks you can run on your own draft before it goes out, and how to fix what you find.
1. Check every return for its net-of-fees partner
What to look for: Any percentage that describes performance, whether in a chart, a headline, a footnote, or a social post.
Why it matters: When an ad shows gross performance, the rule requires net-of-fees performance alongside it, with at least equal prominence and calculated over the same time period. A firm can have this written into its policy and still have gross-only numbers slip into a newsletter or one-pager.1
How to fix it:
- Put the net figure right next to the gross figure, at the same size, for the same period.
- Make sure the fee used to calculate net is one your intended audience would actually pay.
- If you compare to a benchmark, name the index and say whether it includes reinvested dividends.
2. Highlight every absolute and superlative
What to look for: Words like conflict-free, unbiased, the only, the best, award-winning, and guaranteed. Also look for any factual claim about your team, your process or your clients.
Why it matters: You need a reasonable basis to believe you could substantiate every material statement of fact if asked. Claims like being "free of all conflicts," credentials that are out of date, and screening processes that don't formally exist are common problems in ads.13
How to fix it:
- For each claim, ask: where's the proof, and is it saved with this piece?
- If the proof is missing, soften the claim, make it more specific, or cut it. "Fee-only" can be supported. "Conflict-free" usually can't.
- Double-check designations, years of experience and team size against current records.
3. Keep testimonial disclosures inside the testimonial
What to look for: Client quotes, reviews, influencer content, referral-program language, and quotes pulled from third-party review sites.
Why it matters: A testimonial or endorsement needs clear and prominent disclosures. Those include whether the person is a current client, whether they were compensated, and any material conflicts. A disclosure that sits behind a hyperlink, or appears in smaller or lighter type than the quote, may not meet that standard.2
How to fix it:
- Put the disclosure directly next to the quote, at least as prominent as the quote itself.
- Treat referral programs and paid promoters as endorsements until you've confirmed otherwise.
- Track total compensation for each promoter over the past 12 months. Several small payments can add up past the $1,000 de minimis threshold.2
4. Give every rating and award its context
What to look for: Badges, rankings, "top advisor" lists, and logos from rating organizations, including the ones in your website footer and email signature.
Why it matters: A third-party rating needs disclosures: the date it was given, the period it covers, who created it, and whether you paid anything. Ratings without dates, ratings that are years old, and wording that suggests you were the only winner are all common problems. So is calling yourself "highly rated" when the methodology is mostly based on assets or client count rather than the quality of advice.13
How to fix it:
- Add the date, period, rating organization and any compensation right next to the rating.
- Remove ratings that are out of date.
- Keep the methodology and any questionnaire you filled out in your advertising file.
5. Flag hypothetical performance before it reaches a public page
What to look for: Backtests, model portfolios, projections, and anything with the word "would" in it, as in "would have returned."
Why it matters: Hypothetical performance has extra conditions. In particular, you need policies and procedures reasonably designed to make sure it's relevant to the financial situation and goals of the intended audience. That's hard to meet on a public website or a broad social post.4
How to fix it:
- Decide who the audience is before drafting. If the audience is "everyone," leave hypothetical results out.
- Send any hypothetical content to compliance early, with the audience and supporting assumptions attached.
- Save a copy of each version that goes out.
A note for broker-dealer teams
The same habits apply under FINRA Rule 2210. Communications must be fair and balanced, and a registered principal must approve retail communications before they're used. A cleaner draft makes that approval faster.
Make the checklist part of drafting
None of these checks are complicated. The hard part is running all five on every draft, every time, across every channel. Teams that build them into the writing stage, rather than leaving them for the review stage, spend less time going back and forth.
That's where RedLine helps. It pre-reviews your marketing drafts against your firm's own compliance guidelines before you submit them. It flags language to revise, wording to remove and disclosures to add. Your compliance team still makes the final call, but drafts arrive in better shape. Try it free for 60 days.
This article is general information, not legal or compliance advice. Always follow your firm's policies and your compliance team's guidance.
Sources
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SEC Division of Examinations, Initial Observations Regarding Advisers Act Marketing Rule Compliance (Apr. 17, 2024). ↩ ↩2 ↩3 ↩4
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SEC Division of Examinations, Additional Observations Regarding Advisers' Compliance with the Advisers Act Marketing Rule (Dec. 16, 2025). ↩ ↩2 ↩3
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SEC Press Release 2024-121 (Sept. 9, 2024), sec.gov/newsroom/press-releases/2024-121. ↩ ↩2