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Are you ready for the new SEC marketing rule?

 

The ways financial advisors advertise and promote their business have changed dramatically over the past several decades, as traditional print advertising has largely been supplanted by digital channels, including email, newsletters, text messages, social media, blogs, webcasts, video, and more. Until recently, however, rules regulating how investment advisors promote their business had not kept pace with the rapidly evolving marketing landscape.

That changed in December 2020 when the SEC created a new Marketing Rule (see press release) to replace its longstanding advertising and cash solicitation rules, and modernize decades of patchwork guidance regarding advisor testimonials, endorsements, and third-party ratings.

SEC Advertising Rule_FeatureImage

Important implications for RIA marketing practices

The welcome news is that the new Marketing Rule provides a flexible, rule-based framework that gives RIAs greater latitude in how they promote their business and share testimonials and positive feedback from clients and partners. But the rule change also creates significant new compliance responsibilities, including substantial record-keeping requirements and Form ADV changes.

Are you ready for mandatory compliance?

Compliance with the Marketing Rule is mandatory for all SEC-registered investment advisors as of November 4, 2022. Is your firm ready?

Here are a few questions to consider:

•  Is your firm prepared to take advantage of the new rule’s more flexible, principle-based framework, which accommodates newer marketing channels such as social media and advisor review platforms?

•  Are you ready to comply with new disclosure standards and due diligence requirements, particularly regarding the presentation of investment performance, as well as and the use of testimonials, endorsements, and third-party ratings in marketing promotions?

•  Have you reviewed your existing marketing pieces to ensure compliance with the new rule?

•  Have you modified your advertising, books and record, social media, and solicitor policies and procedures to meet the new requirements?

•  Is your staff aware of the rule changes and prepared to comply?

If you’re not sure about the answer to any of these questions, or the answer is no, it’s time to make sure your firm is familiar with the new rule’s benefits and ready to comply with its marketing requirements, disclosures, and record-keeping requirements. If that sounds daunting, why not work with a trusted partner that can help you promote your business through new ways in a safe, compliant manner?

At Thrivent Advisor Network, we take a pragmatic, collaborative approach to help advisors manage risk – with the goal of protecting their business, not restricting it. Our experienced compliance professionals provide dedicated oversight and procedural guidance on matters ranging from regulatory compliance to policies and contracts. Partnering with us to protect and grow your business can allow you to devote more time to what matters the most – growing your business and helping clients achieve financial clarity.

 

Links to additional information:

•  SEC Adopts Modernized Marketing Rule for Investment Advisers (Press Release)
•  SEC Investment Advisor Marketing Compliance Guide
•  SEC Final Rule
•  Risk Alert (Sept. 19, 2022)



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