How Financial Advisors Are Navigating the SEC's Updated Marketing Rule FAQs
Sam's List Editorial | 2026-06-06
How Financial Advisors Are Navigating the SEC's Updated Marketing Rule FAQs The SEC doesn't rewrite Rule 206(4)-1 every year. What it does — with increasing frequency — is release FAQ guidance that clarifies specific scenarios advisors are running into in practice. In January 2026, the SEC's Division of Investment Management released two new FAQs under the Marketing Rule. Neither changed the fundamental compliance framework. Both addressed specific questions that had been creating friction for advisors — one around how to present performance using model fees, the other around disqualification provisions for endorsers with certain regulatory orders. Understanding what these FAQs say — and what they don't say — matters for every RIA that is actively marketing its services. What the January 2026 FAQs Actually Cover The two January 2026 FAQs addressed distinct compliance scenarios. FAQ 1: Model fees in net performance presentations. The question advisors have been wrestling with is whether it's permissible to calculate and present net-of-fees performance using a model advisory fee — a representative or maximum fee — rather than the actual fees charged to each account. The SEC's answer: yes, this is permissible, but only if the presentation as a whole is fair, balanced, and not misleading. That qualifier carries real weight. The FAQ makes clear that using a lower model fee in net performance presentations — which makes net returns look better than they would under actual fees — combined with inadequate disclosure could render the presentation misleading. The disclosure about the difference between model and actual fees is not optional. For advisors presenting track records across multiple clients who paid different fee rates, this FAQ gives flexibility. It doesn't give permission to cherry-pick a fee assumption that flatters the performance. FAQ 2: SRO order disqualification for testimonials. The Marketing Rule disqualifies certain "covered persons" from providing testimonials or endorsements on behalf of an adviser — specifically, individuals who have been the subject of certain SEC disciplinary orders. The January 2026 FAQ extended that disqualification to similar orders from Self-Regulatory Organizations (SROs) like FINRA. The practical implication: an adviser who uses a testimonial from someone who received a FINRA disciplinary order — even a minor one — may be using a disqualified endorser without realizing it. The adviser is responsible for verifying that any testimonial or endorsement provider is not disqualified, and the due diligence requirement now...
