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Investment Adviser Advertisements

In recent years there have been changes in the technology used for communications between advisers and clients/prospective clients, the expectations of investors shopping for advisory services, and the nature of the investment advisory industry. The SEC’s Office of Investor Education and Advocacy is issuing this Investor Bulletin to help investors understand what to expect in advertisements from advisers, especially in online reviews or on social media, in this changed landscape.

What are the general rules for advisers’ advertisements?

Like many businesses, advisers might sometimes use advertisements to describe or draw attention to the services they offer to attract new clients or to keep existing clients.

There are some general prohibitions that advisers need to keep in mind for their advertisements.  For example, their advertisements cannot include untrue statements of material fact or include/exclude information that would make the advertisement misleading. Also, advisers must provide investment-related information in a fair and balanced manner. That means, for example, that advisers generally cannot advertise only the potential benefits of their services and investments. They need to explain the risks and limitations, as well.

More specifically, an advertisement may not, among other things:

  • Include untrue statements of material fact, or omit material facts necessary to make a statement not misleading;
  • Include a material statement of fact if the adviser doesn’t have a reasonable basis for believing it is able to substantiate the statement;
  • Include information that is likely to mislead the recipient;
  • Discuss potential benefits related to the adviser’s services without providing fair and balanced treatment of risks or limitations associated with the benefits;
  • Reference specific investment advice that is not presented in a fair and balanced manner; and
  • Include or exclude performance results, or present performance time periods, in a way that is not fair and balanced.

Are there any special rules for online reviews, including on social media?

Online reviews often use statements made by a person other than the adviser. If these statements are part of an adviser’s advertisement, they must comply with additional requirements.

Testimonials are statements by an adviser’s current clients or investors in a private fund advised by the adviser. They are statements about their experiences with the adviser.

Endorsements are statements by people who are not current clients or investors in a private fund advised by the adviser. They are statements that indicate approval, support, or recommendation of the adviser, or describe their experiences with the adviser. They could include statements from celebrities.

Both testimonials and endorsements also include statements that solicit or refer any current or prospective client or investors in a private fund advised by the adviser to be a client of the adviser/an investor in a private fund

As part of these requirements, advisers must clearly disclose in their advertisements whether the statement was made by a current client and whether the person was paid or has a conflict of interest. The disclosure should also include information about any compensation agreement and any conflict of interest.

This information can help you, as a client or potential client, consider the extent to which a testimonial or endorsement should influence your investment decision.

What about third-party ratings?

If an adviser includes a rating by a third party in its advertisement, the advertisement must also comply with additional requirements.

Third-party ratings are when persons without a connection to the adviser provide ratings as part of their business.

As part of these requirements, advisers must clearly disclose information about the rating. This information includes the identity of the third party that created the rating and any compensation that has been provided by the adviser for using the third-party rating.

Like with testimonials and endorsements, you can use this information to consider carefully the extent to which a third-party rating should influence your investment decision.

Are advisers allowed to include performance information in their advertisements?

Performance might be one of the first pieces of information you want to know as a client or potential client. But, it is important to consider how any performance claims are calculated and to evaluate their reliability. There are certain requirements that are designed to make sure the performance information in advertisements is not misleading. For example, advertisements that include gross performance must also include net performance (calculated after fees and expenses).

Always remember that past performance cannot predict how an investment strategy will perform in the future.


Advertisements can be a helpful tool for advisers to present the services they offer to potential and current clients. It is important to understand the information presented, including on social media/online reviews, and to consider carefully how it should influence your investment decision.

Additional Resources

Investor Bulletin: Performance Claims

Updated Investor Bulletin: How to Check Out Your Investment Professional

This bulletin represents the views of the staff of the Office of Investor Education and Advocacy.  It is not a rule, regulation, or statement of the Securities and Exchange Commission (“Commission”).  The Commission has neither approved nor disapproved its content.  This bulletin, like all staff statements, has no legal force or effect: it does not alter or amend applicable law, and it creates no new or additional obligations for any person.


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