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5 Things Advisors Should Know Before the Nov. 4 Marketing Rule Compliance Date


Advisors, check your calendars. The mandatory compliance date for the Securities and Exchange Commission’s investment advisor marketing rule is Nov. 4. That’s right around the corner.

And for many investment professionals, that deadline matters. In fact, nearly 69% of investment advisor compliance professionals said that their timeline for complying with the new rules was “on or shortly before” the Nov. 4 date, according to one survey.

On that date, investment advisors will have to follow rules that aim to modernize and amend their marketing strategies. That includes activities related to the publication of third-party ratings, testimonials and endorsements, and performance metrics, among other marketing materials.

To understand what financial advisors and investment professionals should know ahead of this important date, SmartAsset spoke with two experts. Cecilia Williams, chief operating officer and chief compliance officer at Halbert Hargrove, and Jonny Swift, a marketing expert and vice president at Impact Communications, shared the tasks investment professionals should complete.

Here’s what advisors should know ahead of the mandatory compliance date for the SEC’s Amended Rule 206(4)-1, addressing Marketing Activities by Registered Investment Advisors.

If you are looking to grow your financial advisory business, check out SmartAsset’s SmartAdvisor platform.

What Advisors Should Know Ahead of the SEC Marketing Rule

The compliance date for SEC's new marketing rule is Nov. 4Don’t forget to review existing performance reporting. Advisors should carefully review the performance reporting component of the marketing rule since they likely already have performance metrics published via various marketing materials. “There’s a lot of performance reporting out there,” Williams says. “If you show gross fees, you should also show net fees.”

Start collecting and gathering testimonials. Swift is already working with professionals to survey existing clients via services such as SurveyMonkey and gather testimonials. “We’re waiting until that Nov. 4 flip-switch to really start publishing everything and putting it out there just to be safe,” he says.

Among other strategies, he’s encouraging clients to sprinkle testimonials throughout their websites in savvy ways, not just on a “Testimonials” webpage. For example, testimonials may appear on a “Who We Serve” page, as social-media-optimized graphics and on Google Business if a client agrees to republish their thoughts online.

“It’s a huge opportunity for advisors that can allow them to set themselves apart from competitors,” he says.

Recognize that the rule has varied impacts on different roles. The marketing rule may impact multiple aspects of an advisory business in myriad ways. Nearly every team member will need to have a sense of what’s coming down the pike.

“This impacts an advisor and what they may use versus a marketing team and what they may have very differently,” Williams says.

Lean on your network. There are hundreds of pages to comb through when it comes to reviewing the new marketing rule — that’s a lot for any one person to handle.

Now is the time to make sure you’ve coordinated with subject-matter experts in compliance, marketing, recordkeeping and other roles. “We are definitely in touch with our compliance partners,” Williams says.

Keep good records. Williams’ team is making sure to keep solid documentation of everything they’re doing right now. They are reviewing marketing materials, performance numbers and anything they update and release to the public, plus they’re keeping all the backup data on hand. “If it’s ever questioned, we’ll have it right there,” she says.

Bottom Line

If you’re stressed about the new marketing rule, you’re not alone. In fact, investment advisor compliance professionals ranked marketing and advertising as their No. 1 compliance worry in a recent survey. But taking some common-sense steps can take some of the mystery out of the process and set professionals on the right path.

Tips for Growing Your Financial Advisory Business

  • Let us be your organic growth partner. If you are looking to grow your financial advisory business, check out SmartAsset’s SmartAdvisor platform. We match certified financial advisors with right-fit clients across the U.S.
  • Expand your radius. SmartAsset’s recent survey shows that many advisors expect to continue meeting with clients remotely following COVID-19. Consider broadening your search and working with investors who are more comfortable with holding virtual meetings or spacing out in-person meetings.

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