Rule explainer Not legal advice

The SEC Marketing Rule and your website

Read this to find the part of the rule that applies to the page you are about to publish, in the regulation's own words alongside plain English. It runs in the rule's own order, from who it reaches to how long you keep the records.

The rule17 CFR 275.206(4)-1. Adopted as Investment Adviser Marketing, Release IA-5653, 86 FR 13024. Effective May 4, 2021. Compliance required from November 4, 2022. It replaced the old advertising rule and the old cash solicitation rule with one rulebook. Sources 1 and 2, numbered at the foot of this page.

How the rulebook changed

Before 2021Two separate rulesAn advertising rule and a cash solicitation rule, adopted decades apart and read apart.
May 4, 2021One rulebook, effectiveBoth fold into 206(4)-1 as Investment Adviser Marketing. Which is why paying a referrer now sits inside a rule about advertising.
November 4, 2022Compliance requiredThe transition window closes. From here every registered adviser is on the text quoted throughout this page.

Scope

Does it reach you?

Four situations cover almost everyone reading this. The fourth is the one that will not sit still.

Applicability“It is unlawful for any investment adviser registered or required to be registered under section 203 of the Act … to disseminate any advertisement that violates any of paragraphs (a) through (d) of this section.” Source 1.

Registered with the SEC

The rule reaches you

Every advertisement you put out is inside the rule, and your website is almost certainly one. Read on.

Registered with your state, not the SEC

A different rulebook

This rule does not reach you. Your state securities regulator sets your advertising rule, and that is the binding text. Much of what follows will still look familiar, because states have been converging on the same standards.

An exempt reporting adviser

Outside this rule, not outside the law

Neither registered nor required to register, so the rule does not reach you. That is not the same as being outside the law: the Advisers Act's anti-fraud section opens “It shall be unlawful for any investment adviser”, with no registration qualifier.

A registered representative, or both at once

Ask your compliance officer

The two regimes overlap rather than divide neatly. Broker-dealer communications answer to FINRA Rule 2210, and if you wear both hats one page can sit under both at once. Which review applies is a question for your compliance officer, and anyone telling you the split is clean is selling something.

The FINRA side →

The definition

What counts as an advertisement

The definition has two halves, which is why so many people get it half right. The first is any communication you make to more than one person that offers your advisory services, and one person is enough if it contains hypothetical performance. Two things are carved out: speech that is “extemporaneous, live, oral”, and information inside a required regulatory filing.

The second half is shorter and separate: any testimonial or endorsement you pay for is an advertisement in its own right. Neither half mentions websites, blogs or social media. The test is who you communicated with and what the communication offered.

DefinitionThe two halves sit at (e)(1)(i) and (e)(1)(ii). The carve-outs are at (e)(1)(i)(A) and (B). Source 1.

Is this an advertisement?

Worked examples

Worked from the definition's own words. Where a real communication lands is a judgement about your facts.

The core of it

The seven prohibitions, in the rule's order

Shorter than its reputation. One line opens it, “An advertisement may not”, and seven items follow. All seven have to be cleared, and the last is wide enough to catch whatever the first six missed. Left, the text as written. Right, what it means when the advertisement is a page on your site.

Reading noteThe middle column is verbatim from (a)(1) to (a)(7). Paragraph numbers sit in the left margin so you can find each one in the source. Source 1.

17 CFR 275.206(4)-1(a), as written

Point at either side to link them

Verbatim

In plain English

(a)An advertisement may not:

(a)(1)

Include any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statement made, in the light of the circumstances under which it was made, not misleading

In plain EnglishDo not say untrue things, and do not leave out something whose absence makes the rest mislead. The second half is harder: a page can be true sentence by sentence and still mislead by what it omits.

(a)(2)

Include a material statement of fact that the adviser does not have a reasonable basis for believing it will be able to substantiate upon demand by the Commission

In plain EnglishState a fact that matters and you need grounds to believe you could produce the backing if asked. Nothing is filed in advance. The most misread line in the rule, taken slowly below.

(a)(3)

Include information that would reasonably be likely to cause an untrue or misleading implication or inference to be drawn concerning a material fact relating to the investment adviser

In plain EnglishThe implication counts, not only the sentence. A credential badge beside a regulator's seal implies something neither says. This paragraph catches design as well as copy.

(a)(4)

Discuss any potential benefits to clients or investors connected with or resulting from the investment adviser's services or methods of operation without providing fair and balanced treatment of any material risks or material limitations associated with the potential benefits

In plain EnglishSet out the upside, set out the material risks alongside it. Not small print underneath. The word doing the work is “balanced”: a judgement about weight and placement, not a box to tick.

(a)(5)

Include a reference to specific investment advice provided by the investment adviser where such investment advice is not presented in a manner that is fair and balanced

In plain EnglishYou may refer to specific advice you gave. You may not present only the flattering half. Behind the instinct that you cannot write about your winners: you can, but not on their own.

(a)(6)

Include or exclude performance results, or present performance time periods, in a manner that is not fair and balanced

In plain EnglishThe chosen window is part of the claim. A period starting at a convenient trough is a presentation choice, and the rule treats choosing it as conduct. This is the general standard; the detailed performance requirements at (d) are out of scope here.

(a)(7)

Otherwise be materially misleading.

In plain EnglishFour words, the widest reach on the page. If a reasonable reader takes away something material and wrong, it does not help that no earlier item quite covers how.

Quoted text is the regulation's own. The right-hand column is our plain-English rendering, not part of the rule. Source 1.

Vocabulary

Four words that carry the weight

The seven items reuse the same handful of terms, and most disagreements about a draft turn out to be disagreements about one of them.

Material

Would it change what a reasonable reader thinks or does? If yes, the rule engages. Almost every argument about whether something is a problem is an argument about this word.

Fair and balanced

Benefits and risks presented so neither is buried. Proportion and placement, which is why text at the bottom of a page nobody scrolls to does not satisfy it.

Substantiate

Hold grounds you could produce if asked. A records habit, not a filing, and the difference between a page you can defend in a year and one you cannot.

Misleading

Judged by the impression left, including the one created by layout, emphasis and omission. Which is why the rule catches pages no single sentence of which is false.

The part almost nobody explains

“Substantiate upon demand”

One line causes more worry than the rest of the rule combined, usually because it is read as a filing requirement. It is not one.

The lineAn advertisement may not include “a material statement of fact that the adviser does not have a reasonable basis for believing it will be able to substantiate upon demand by the Commission”. Source 1.

What people think it says

Send your proof to the SEC before you publish the number.

Nothing is filed in advance and no approval is on offer. Reading it this way is why some firms stop using figures at all, a real cost paid for a requirement that does not exist.

What it actually says

Have grounds to believe you could produce the backing if someone asked.

The test is what you hold and could hand over. In practice: the source behind a claim is findable a year later by someone at the firm who is not you. A filing-cabinet problem, not a legal one.

What “reasonable basis” looks like behind one sentence: a record someone else can find

The claim on the pageAny statement of fact a reader would treat as material

Where the figure came fromThe publisher, the document, the table, the page

When it was publishedThe date on the source, not the date you found it

The copy you keptA saved file, not a link that may rot

Who checked it, and whenA name and a date, so the next person knows how stale it is

When it is re-checkedThe thing that stops a true claim quietly becoming false

What changed

Testimonials, and the $1,000 line

The headline change: testimonials and endorsements went from effectively off-limits to permitted with conditions. Three obligations, and how many switch on depends on what you paid. Drag the amount and watch which ones engage.

ConditionsDisclosure at (b)(1), the written agreement at (b)(2)(ii), the disqualification check at (b)(3), the relief at (b)(4). “De minimis compensation” is defined at (e)(2). Source 1.

What you paid, and what that switches on

Drag the amount

Cash and the value of anything else, preceding 12 months $0

Not compensated

Disclosure to the reader (b)(1) Required
A written agreement with the person (b)(2)(ii) Relieved
Disqualification check on the person (b)(3) Relieved

Nobody was paid, so the relief at (b)(4) applies to the written agreement and the disqualification check. Disclosure still attaches.

Disclosure never switches off. The relief at (b)(4) reaches the written agreement and the disqualification check, and it reaches neither disclosure nor any other part of the rule. Source 1.

The threshold never switches disclosure off. It applies at every level, including to a review nobody paid for, and it is the one a website gets wrong, because a reviews widget drops a row of stars onto a page with none of it attached. The threshold counts cash and the value of anything else you gave across the preceding twelve months, so it is a running total rather than a per-gift test.

One distinction shapes the layout. Three things must be clearly and prominently disclosed: whether the person is a current client, whether they were paid, and a brief statement of any material conflicts. Two longer items, the compensation terms and the full conflicts description, must be disclosed but do not carry that standard. A difference about prominence, not about whether you say it.

Records

Five years, the first two within reach

A separate rule tells you to keep copies of the advertisements themselves. The clock does not start when you publish. It starts at the end of the fiscal year in which you last put the thing out, so an article sitting quietly on your site keeps restarting it.

RetentionCopies of advertisements are kept under 275.204-2(a)(11), preserved “for a period of not less than five years, the first two years in an appropriate office of the investment adviser”. Source 3.

The retention clock on one article

17 CFR 275.204-2(a)(11)

Still on your site Taken down. The clock is running. Still being disseminated. The clock has not started.

Start: the end of the fiscal year you last disseminated it +5 years

The five years run from the end of the fiscal year in which the article last went out. Two of them have to be somewhere a person at the firm can actually reach.

A page still on your site is still being disseminated, so the end of the fiscal year keeps moving and the five years have not begun. This is the part people miss: an article published in 2019 and never taken down has a clock that starts this year, not that one.

The consequence people trip over: a website edited in place, keeping no copy of what each page said before, has nothing to produce. Source 3.

That is a tooling decision made long before anyone asks for the file. A content management system that overwrites the page and keeps no prior version has quietly decided what you can hand over.

One section about our software, then back to the rule

What Verand checks of this rule, and what it does not

Everything above stands whether or not you buy anything. This is the inventory of how much of it software can see in a draft. The right-hand column is the longer one, which is the point of printing it.

What it checks

Blocks implied government approval. A draft saying the SEC approved or endorsed the firm cannot publish. The fix is wording: “registered with”, never “approved by”.
Warns on a first-party fee-only claim, because software cannot know how your firm is paid. It flags rather than blocks.
Runs a Marketing Rule check on every draft, for guaranteed-return language in a securities context and for a specific-security recommendation carrying no suitability wording.
Blocks six more claim types from the baseline underneath: guaranteed results, guaranteed returns, cannot-lose, get-rich-quick, risk-free, zero-risk. The last two release only on a written, logged reason.
Requires the disclaimer block to be present, and holds a minimum on cited sources.

What it does not

It does not decide whether something is an advertisement. That turns on who you sent it to, which is not visible in the text. Every draft is checked as though it were one.
It does not enforce FINRA Rule 2210. What applies to a registered rep →
It does not check the testimonial conditions. Not the disclosures, the written agreement or the disqualification check. Those are things your firm does.
It does not keep your books and records, or judge whether your substantiation would satisfy anyone.
It does not publish. Nothing reaches your site without a person at your firm approving it, and no setting changes that.

Validated against the SEC's rules. AI-researched and operator-reviewed. Your counsel confirms applicability. Not legal advice. How we label review →

Verand for financial advisors Can advisors use AI to write content? →

Questions

The ones that come up

About the rule, not about our software. Each points at the paragraph it comes from.

Is my blog an advertisement?

Usually, and not because it is a blog. A public post goes to more than one person, and one that describes what your firm does and invites contact is offering your advisory services. Pure education with nothing on offer is a harder question, and the answer depends on what else is on the page.

Do I have to put a disclaimer on every page?

The rule contains no line saying “add a disclaimer to your website”. It contains standards: not misleading, fair and balanced, substantiated. Firms use standing disclaimers because they help meet those standards, not because a paragraph orders one. Testimonial disclosure is the exception, and it is itemised.

Can I put Google reviews on my site?

A review from a current client is a testimonial, so disclosure attaches even though you paid nothing. That is the part a widget will not do for you: it renders stars and text, with no idea it is now carrying a regulatory obligation. Settle how the disclosure is delivered before the widget goes on.

What happened to the old cash solicitation rule?

Gone as a separate rule. Paying someone to refer clients had its own rulebook, and that subject now lives inside the testimonial conditions above. Which is why a compensation threshold and a disqualification check turn up in a rule about advertising.

Does it matter that a draft was written with AI?

The rule does not ask who typed it. The adviser who disseminates the advertisement answers for what it says, exactly as if an agency had written it. What changes is where the effort goes: generating stops being the work and reviewing becomes it.

Sources

Where every line came from

Primary sources only. Quoted phrases on this page are the regulation's own words. Everything else is our plain-English rendering, worth checking against the text rather than taking our word for it.

117 CFR 275.206(4)-1, the Marketing Rule. Cornell Legal Information Institute 2Investment Adviser Marketing, Release IA-5653, 86 FR 13024, March 5, 2021. Federal Register 317 CFR 275.204-2, books and records, at (a)(11) and (e)(3)(i). Cornell Legal Information Institute 415 U.S.C. 80b-8(a), Advisers Act section 208(a), on implying government approval. Cornell Legal Information Institute 515 U.S.C. 80b-6, Advisers Act section 206, the anti-fraud section. Cornell Legal Information Institute 6Marketing Compliance Frequently Asked Questions, Division of Investment Management. Staff views, no legal force. SEC

Paragraph references are to 17 CFR 275.206(4)-1 unless another rule is named. Last checked against these sources on September 16, 2026. Not legal advice.

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