Registered investment advisors and firms should begin preparing for the Securities and Exchange Commission’s new marketing rule. The deadline is quickly approaching, and many RIAs are worried that they’re entering treacherous waters.
According to an Investment Adviser Association poll, the SEC’s new marketing and advertising rule was the biggest compliance concern for registered investment advisors in 2021. Even with those concerns, many marketing departments are ready to implement the new rule, specifically with respect to testimonials and endorsements, as soon as possible.
While testimonials can increase sales substantially, the intricacies surrounding the rule’s restrictions and regulations are daunting. For starters, any third-party rating used in an advertisement is required to include specific disclosures to prevent it from being misleading. But how can those disclosures be incorporated into the advertisement without altering the integrity of the ad itself?
- Do BrokerCheck disclosures ever fall off automatically?
- Weaponized Form U5
- Investment Adviser Representatives (IARs) Must Complete Continuing Education Program To Maintain Registration
- FINRA’s expungement reform takes a turn for the worse
- Do you have a dedicated chief compliance officer?
- If I’ve been terminated, how long will it be before a Form U5 is filed?
This is causing many compliance professionals to scramble, and rightfully so. Few compliance officers have time to read the 430-page final rule, and its application will differ, depending on how the firm employs traditional advertising, social media, testimonials, and endorsements.
That’s why it’s so important for RIAs to be proactive and begin preparing their policies, procedures, and processes now.
If your firm is seeking guidance during this rule transition, AdvisorLaw’s experts can provide counsel. Our team of certified securities compliance professionals and attorneys can answer any questions that you may have about the new marketing rule, including advertising and solicitation disclosure requirements.
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