5 Action Items for the New Marketing Rule for Investment Advisors

The Securities and Exchange Commission released its final version of the modernized Marketing Rule under the Investment Advisors Act on December 22, 2020. The Press Release does an effective job of describing the major points covered by the modernized rules including:

  • Defining Advertisement
  • Describing General Prohibitions
  • Discussing Testimonials and Endorsements
  • Third-Party Ratings Requirements
  • Performance Information
  • Form ADV Amendments
  • Books and Records Requirements
  • Withdrawal of Prior Staff Guidance

Within your RIA, the Sales, Marketing, Legal, Risk and Compliance teams should get together to review and understand the requirements of the Rule Release. You can use a consultant to help expedite this process or invest your time internally, but be sure to:

  1. Assemble the team and create awareness.
  2. Create a project plan with ownership of tasks and communication.
  3. Review your ADV, risk assessment, policies, procedures, testing workflows and record keeping systems.
  4. Document and approve proposed changes.
  5. Review all of your existing marketing content and amend or retire materials that don’t meet the new standard.

The SEC stated “The marketing rule, amended books and records rule, and related Form ADV amendments, will be published on the Commission’s website and in the Federal Register. All will be effective 60 days after publication in the Federal Register. The Commission has adopted a compliance date that is 18 months after the effective date to give advisers a transition period to comply with the amendments.”

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About The Author

As CEO of Oyster Consulting, Buddy Doyle has led the charge to create a successful organization built on the belief that transforming experienced industry practitioners into consultants adds more value to our clients.

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