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SEC Email Compliance Rules for Financial Advisors and RIAs


Email marketing is a great opportunity to connect with clients and nurture stronger relationships. You can blast out the latest news and updates about your firm, share helpful investment tips or offer your opinions on recent market happenings. SEC email compliance rules govern what you can and can’t do when sending email newsletters to clients.

Ready to grow your client base? SmartAsset AMP helps you connect with leads.

Benefits of Email Marketing for Advisors

As you develop your advisor marketing plan, it’s important to include a spot for email marketing. Sending emails to clients can be invaluable for:

  • Building rapport and fostering trust
  • Establishing your credibility and expertise
  • Encouraging client engagement
  • Strengthening relationships and loyalty
  • Driving client retention and referrals

Sending email newsletters is also highly cost-effective compared to direct mail marketing, digital ads or billboards.

You can choose an email marketing service that aligns with your budget and build out personalized campaigns to target different segments of your client base. Once you’ve created a campaign, you can use automation to schedule and send emails so that you’re free to focus on serving your clients.

SEC Email Compliance Rules for Recordkeeping

The SEC has two rules that govern compliance for advisors regarding recordkeeping for email communications.

Rule 204-2 requires RIAs to maintain original records of communications, including electronic ones, relating to:

  • Recommendations made or proposed to be made, and advice given or proposed to be given
  • Receipt, disbursement or delivery of funds or securities
  • Placing or execution of any order to purchase or sell securities
  • Predecessor performance

Emails must be securely stored and archived for five years. If you’re sending emails (or text messages) to clients discussing any of the above items, you’ll need to ensure you’re archiving them for compliance.

Rule 17a-4 requires broker-dealers to retain “all communications” related to their business. Specifically, electronic communications, including emails, must be maintained in a write once, read many (WORM) format which is non-rewritable and non-erasable. All business records must be stored and archived for six years.

SEC Email Compliance Rules for Marketing

Aside from recordkeeping requirements, the SEC also imposes compliance rules regarding the content of the emails you send to clients. Under Rule 206(4)-1, the marketing rule, advisors must:

  • Avoid making any misleading or false statements, or deliberate omissions of fact in their marketing communications
  • Disclose potential conflicts of interest or compensation paid to clients when sharing testimonials in their marketing
  • Avoid the use of hypothetical performance data when marketing specific products or services to clients
  • Present fair and balanced information versus being selective with what you share with clients
  • Avoid making specific guarantees or promises to clients

Failure to meet compliance requirements for either rule can result in fines and penalties. Having a disciplinary action on your record can also cost you in other ways if it damages your brand reputation.

Apart from the SEC’s rules, financial advisors must also comply with the CAN-SPAM Act when using email to market their services. Under the CAN-SPAM Act, you cannot:

  • Use false or misleading header information
  • Send emails with deceptive subject lines

Additionally, you must:

  • Include location information in your emails
  • Disclose that your message is an advertisement
  • Tell recipients they have the right to opt out
  • Honor opt-out requests promptly

Each email violation of the Act is subject to a fine of up to $51,744. Violators may also be subject to criminal penalties and be required to pay redress to consumers.

Identifying SEC Email Compliance Rule Violations

An advisor monitors his firm's email to ensure compliance with SEC rules.

Regular monitoring of email communications is essential for spotting potential rule violations. This is something your chief compliance officer (CCO) might handle, or you may choose to outsource this task to an email archiving service.

Examples of what to monitor for include:

  • Language that suggests you’re making a promise or guarantee about a product or service you provide
  • Lack of proper disclosures regarding testimonials or affiliate relationships mentioned in the body of the email
  • Failure to adhere to privacy policy rules when collecting and storing client information
  • Inclusion of any information that is misleading, false or otherwise unsubstantiated

Cherry-picking – meaning you tell clients about the pros of a product or service without sharing the cons – is also a no-go for SEC email compliance rules.

Email Marketing Compliance Best Practices

If you’re using email newsletters to promote your services to current or prospective clients, these tips can help you ensure compliance each time.

  • Review emails for accuracy and check the language for any wording that might be interpreted as misleading or unclear before hitting send
  • Develop internal policies for flagging emails for review that contain specific keywords that may indicate a compliance violation
  • Maintain accurate and adequate records of all email communications under SEC rules
  • Ensure that all members of your team understand your firm’s email compliance policy and what to do if they spot a potential violation
  • Stay up to date on the latest regulatory developments regarding compliance and marketing

If you find email marketing daunting, you may consider partnering with a third-party provider. For instance, SmartAsset AMP helps you connect with leads and build relationships through email marketing while providing you with everything you need to ensure compliance.

Frequently Asked Questions (FAQs)

Are Financial Advisors Allowed to Advertise?

Financial advisors are allowed to advertise their services through a variety of marketing channels, including social media, email and a professional financial advisor website. Advisors must adhere to compliance rules when marketing their businesses, which include maintaining proper records and refraining from using false or misleading statements.

Do Advisors Need Consent for Marketing Emails?

Federal regulations require advisors and other businesses to obtain consent to add someone to their email list. You must also allow your recipients to opt out of receiving email messages and honor opt-out requests promptly.

Can Financial Advisors Cold Email?

Financial advisors can send cold emails if they receive consent from the recipients to send messages first. Cold emailing prospects can be a great way to break the ice and introduce yourself. Just keep in mind that if a recipient asks to opt out, you must honor their request.

Bottom Line

As you're emailing clients, it's important to follow SEC email compliance rules.

Building an email list can help you stay connected with current clients and warm up prospects. Making sure your messages are compliant is important for staying on the right side of SEC rules.

Tips for Growing Your Advisory Business

  • Email marketing can be time-consuming and there are easier ways to reach out to prospects if you’re trying to grow your business. Partnering with an advisor marketing platform like SmartAsset AMP can help you connect with leads while leaving you free to serve your clients. Schedule a free demo to learn how to leverage it for your business.
  • Compliance rules extend to other aspects of your marketing. For example, if you’re promoting your business on social media or collaborating with financial influencers, you must make appropriate disclosures and you can’t make false or misleading statements. Your advisor website must also be compliant if you’re incorporating testimonials or sharing information about your products and services.

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