How Financial Advisors Are Navigating the SEC's Updated Marketing Rule FAQs
Sam's List Editorial | 2026-06-06
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 explicitly extends to SRO order checks.
What Hasn't Changed: The Core Prohibitions
The FAQs didn't alter the underlying framework. The fundamental prohibitions under Rule 206(4)-1 remain exactly where they were.
No untrue statement of material fact. No misleading by omission. No cherry-picked time periods in performance presentations. No misleading implications about portfolio management experience or strategies. No advertisement that has a high likelihood of being understood by unsophisticated investors in a way that doesn't reflect reality.
What the FAQs do is clarify how specific scenarios fit within — or outside — those prohibitions. They answer "can I do this specific thing?" for scenarios where advisors had legitimate questions. They don't relax the rules.
This distinction matters because some advisors treat FAQ guidance as an opening — a new permission to do things they couldn't do before. That's not how to read it. FAQ 1 didn't give advisors permission to use model fees; it confirmed a specific set of conditions under which using model fees doesn't violate the existing prohibition against misleading presentations.
The Testimonial and Endorsement Landscape
The testimonial and endorsement provisions are where most small and mid-sized RIAs are navigating the most compliance complexity in 2026.
Under Rule 206(4)-1, a "testimonial" is a statement by a current client about the adviser. An "endorsement" is a statement by a non-client about the adviser. Both are subject to the rule's requirements: clear disclosure, disqualification checks, and — for paid testimonials and endorsements — additional specific disclosures.
The rule applies broadly. A client review on Google or Yelp is a testimonial. A LinkedIn recommendation from a former client is a testimonial. An advisor's website quoting a client saying "they helped me navigate my retirement" is a testimonial. A mention in a third-party article that the advisor arranged or influenced is potentially an endorsement.
The standard small firm compliance failure: posting a client testimonial on a website or social media without including the required disclosures — specifically, that the testimonial was provided by a current client and whether any compensation was paid, and that clients' experiences may not be representative of all clients' experiences.
These are not complex disclosures. They're a few sentences. But they have to be there, proximate to the testimonial, every time.
LinkedIn, Social Media, and the Practical Reality
The SEC has been clear that advisors' social media activity is advertising under Rule 206(4)-1. Every post, repost, and share by an advisor in a professional context is subject to the rule's requirements.
The practical friction this creates: advisors can't simply reshare a client's LinkedIn post praising their services without triggering the testimonial requirements. Asking a client to post publicly and then reposting that content could constitute soliciting a testimonial — which has its own requirements.
The January 2026 FAQ guidance didn't specifically address social media mechanics, but the existing guidance is clear enough: if the content is a statement about the adviser's services, it's covered. The medium doesn't change the regulatory treatment.
Advisors who are actively building a social media presence or content marketing program in 2026 should have their planned approach reviewed against current Marketing Rule requirements before they publish. The cost of a compliance review is far lower than the cost of an SEC deficiency letter or enforcement action.
The record-retention requirements under Rule 204-2 add another layer: advisors must retain copies of all advertisements, including social media posts, with date and distribution records. If your compliance program doesn't include social media retention, that gap needs to close.
For advisors navigating these requirements and looking for a qualified partner to review their marketing practices, the most reviewed RIAs and advisory practices are on Sam's List. Bull Oak works with clients who want experienced, compliance-aware advisory relationships.
General educational content only. Not investment advice. Past performance does not guarantee future results. Consult a qualified financial advisor for guidance specific to your situation.