Compliance Marketing Tips for Wealth Managers: 10 Steps to Stay Compliant

The SEC issued a record breaking $8.2 Billion in penalties in 2024 alone. Along with FINRA’s $59.8 Million, enforcement actions from both are intensifying. As wealth managers market their business, they must pair strategic initiatives with comprehensive compliance protocols. This article provides 10 essential compliance marketing tips that aid in adhering to both SEC and FINRA regulations.

NOTE – While there is a lot of overlap between the SEC and FINRA marketing and advertising rules, there are some nuanced differences. Wherever applicable we made note below. Also be sure to check out some useful resources at the bottom of the page.

10 Essential Compliance Marketing Tips for Wealth Managers

1. Follow Performance Advertising Requirements

What the Rule Says

Any performance presentation must show net performance with equal prominence to gross performance. Net performance must be calculated over the same time period using the same methodology. Advisers must present 1, 5, and 10-year performance periods (or since inception if shorter) with equal prominence.

How to Ensure Compliance

• Always show net alongside gross: Calculate net performance using actual fees or model fee schedule
• Use consistent time periods: Present 1, 5, and 10-year periods ending no earlier than most recent calendar year-end. Ideally, updating annualized performance numbers monthly is the best practice
• Document methodology: Maintain detailed records of all calculations and assumptions
• Include related portfolios: Show all substantially similar portfolios unless exclusion doesn’t materially increase performance
• Implement quarterly reviews: Audit all performance presentations for accuracy and compliance

Real-World Breach Case

In September 2023, the SEC charged nine investment advisers for advertising hypothetical and back-tested performance to general audiences without required policies and procedures. One firm advertised model performance that projected annual returns between 10.9% and 16% without proper disclosures or policies to determine investor eligibility.

Penalty: Firms paid penalties ranging from $50,000 to $175,000, with total penalties exceeding $850,000.^[i]

2. Implement Proper Testimonial and Endorsement Disclosures

What the Rule Says

SEC and FINRA rules require that testimonials and endorsements in marketing materials include clear disclosures of key facts. Firms must indicate whether the person providing the testimonial is a current, former, or non-client, disclose any cash or non-cash compensation provided, and highlight potential conflicts of interest. The SEC also requires written agreements and background checks for compensated endorsers, while FINRA mandates that all communications remain fair, balanced, and not misleading.

How to Ensure Compliance

• Create standardized disclosure templates: Include details on client status, compensation, and conflicts of interest prominently
• Implement written agreements: SEC-registered firms must document arrangements with compensated endorsers receiving over $1,000 over 12 months (FINRA does not require this)
• Conduct background checks on endorsers: SEC requires screening for disqualifying events (criminal convictions, regulatory sanctions) (FINRA does not require this)
• Maintain oversight procedures: Review all testimonials before use to ensure no misleading or false information is provided
• Document compensation: Track all payments and non-cash benefits provided

Real-World Breach Case

In March 2024, the SEC charged five investment advisers for violations including using non-client testimonials without proper disclosure. One firm presented testimonials from non-clients as if they were from current clients, failing to disclose the true relationship and compensation arrangements.

Penalty: The firm paid a $100,000 penalty and implemented enhanced compliance procedures.

3. Establish Social Media Compliance

What the Rule Says

Both SEC and FINRA require firms to ensure that social media content is fair, balanced, and not misleading. FINRA mandates principal pre-approval for static content and supervision of interactive communications under Rule 2210, along with a three-year retention requirement for all business-related posts. The SEC requires firms to maintain records of advertisements, including social media, for five years under Rule 204-2 and to supervise all communications to prevent violations of the Marketing Rule.

How to Ensure Compliance

• Designate social media supervisors: Assign registered principals to review content
• Use pre-approved content libraries: Create compliant templates for common posts
• Implement archiving systems: Deploy solutions capable of retaining all social media activity for the required regulatory period (3 years for FINRA, 5 years for SEC)
• Monitor third-party content: Review all shared articles and retweets for compliance

Real-World Breach Case

FINRA fined M1 Finance LLC for widespread social media influencer violations. The firm used approximately 1,700 influencers who generated over 39,400 new accounts between January 2020 and April 2023 but failed to review or approve any influencer content before publication. M1 also made misleading claims about margin lending and failed to maintain required records of social media communications.

Penalty: $850,000 fine plus implementation of comprehensive social media supervision procedures, including written supervisory procedures for influencer relationships and content review systems.

4. Comply with Email Marketing Requirements (CAN-SPAM Act)

What the Rule Says

The CAN-SPAM Act applies to all businesses, including investment advisers and broker-dealers, that send commercial email. It requires accurate “From,” “To,” and routing information; non-deceptive subject lines; clear identification of marketing messages; a valid physical postal address; and a functioning opt-out mechanism honored within 10 business days. SEC and FINRA further require that email communications remain fair, balanced, and not misleading, and must be supervised and retained under applicable recordkeeping rules.

How to Ensure Compliance

• Automate compliance features: Use email platforms with built-in CAN-SPAM compliance
• Maintain suppression lists: Update opt-out lists within 10 business days
• Include physical address: Add principal place of business in every email
• Test opt-out links: Regularly verify unsubscribe functionality across all devices

Real-World Breach Case

The FTC charged Experian Consumer Services for violating CAN-SPAM by failing to provide working opt-out mechanisms in marketing emails. The company sent promotional emails for credit monitoring services with deceptive subject lines claiming they contained “important information about your account” when they were purely marketing messages.

Penalty: $650,000 settlement plus implementation of comprehensive email compliance procedures and permanent injunction against future violations.

5. Avoid “AI-Washing” and Unsubstantiated Technology Claims

What the Rule Says

SEC and FINRA rules prohibit false or misleading statements about the use of artificial intelligence (AI) or technology capabilities in marketing materials. Under SEC Rule 206(4)-1, investment advisers must substantiate any claims with actual implementation and maintain supporting documentation. FINRA Rule 2210 requires broker-dealers to avoid exaggerated or unwarranted statements about technological tools or services and to ensure all claims have a reasonable basis. Firms must avoid “AI-washing” or overstating technological sophistication.

How to Ensure Compliance

• Document actual AI usage: Maintain detailed records of algorithms, processes, and implementation supporting any AI-related claims
• Avoid buzzword marketing: Only promote technological capabilities that are fully implemented and operational within the firm
• Substantiate all claims: Keep technical documentation readily available
• Update disclosures regularly: Ensure all descriptions of technological capabilities remain accurate and reflect current systems and practices

Real-World Breach Case

In March 2024, the SEC settled charges with two investment advisers for making false claims about using AI. The firms advertised AI-powered investment strategies but actually used basic spreadsheet calculations and manual processes.

Penalty: Combined penalties of $400,000 plus disgorgement of fees earned from false advertising.

6. Properly Disclose and Update Third-Party Ratings

What the Rule Says

Both SEC and FINRA prohibit the use of false, misleading, or outdated third-party ratings in marketing materials. SEC Rule 206(4)-1 requires investment advisers to disclose the identity of the rating organization, the date and period covered by the rating, and any compensation arrangements. FINRA Rule 2210 mandates that all such communications be fair and balanced, with appropriate disclosures to avoid creating a misleading impression. Firms must ensure third-party ratings are current, verifiable, and prominently displayed with all required context.

How to Ensure Compliance

• Keep ratings current: Regularly review and update third-party ratings to ensure they are not outdated or misleading. Remove awards no longer applicable
• Disclose all key details: Clearly display the identity of the rating organization, the date of the rating, and the period it covers
• Flag compensation arrangements: Prominently disclose if the firm provided cash or non-cash compensation in connection with the rating
• Verify legitimacy: Confirm the credibility of third-party rating organizations and the validity of the ratings used
• Maintain documentation: Keep records of all ratings, including supporting materials and any payments made, to demonstrate compliance during examinations
• Prominence matters: Place disclosures near the rating itself so clients can see context immediately

Real-World Breach Case

In September 2024 the SEC charged multiple firms for displaying outdated third-party rankings. One firm continued advertising a “Top Wealth Manager 2019” award through 2024 without updating or disclosing the outdated nature.

Penalty: $60,000 fine and required removal of all outdated ratings from marketing materials.

7. Maintain Comprehensive Marketing Records

What the Rule Says

Both SEC and FINRA require firms to maintain comprehensive records of all marketing materials and communications. This includes advertisements, performance claims substantiation, testimonials, endorsements, and internal approvals.

How to Ensure Compliance

• Set up automated archiving systems: Use retention solutions with search capabilities to capture all marketing materials
• Document internal reviews and approvals: Keep records of all advertising and communication approvals
• Maintain supporting documentation: Store evidence for performance claims, testimonials, and endorsements
• Archive all versions: Retain drafts and final versions of marketing content to show review history
• Conduct regular retention audits: Periodically verify that no records have been deleted prematurely
• Comply with retention periods: Follow regulatory timelines (5 years for SEC, 3 years for FINRA)

Real-World Breach Case

The SEC’s examination findings repeatedly cite firms unable to produce marketing materials or substantiation during exams. One adviser couldn’t provide documentation supporting performance claims made in presentations from two years prior.

Penalty: $100,000 fine plus one-year suspension of using performance advertising.^[ii]

8. Avoid Hypothetical Performance Pitfalls

What the Rule Says

Both SEC and FINRA rules state, hypothetical performance, including back-tested and model performance, can only be shown to investors who the adviser reasonably believes have the resources and sophistication to understand the limitations.

How to Ensure Compliance

• Assess investor sophistication: Develop and document procedures for determining whether recipients can evaluate hypothetical performance appropriately
• Establish written policies: Define when and how hypothetical or back-tested results may be used
• Provide comprehensive disclosures: Clearly explain assumptions, limitations, and risks associated with hypothetical data
• Restrict public use: Avoid posting hypothetical performance on websites or in mass marketing to general audiences
• Maintain qualification records: Retain evidence of investor assessments and approvals before providing hypothetical materials

Real-World Breach Case

In the 2024 marketing rule sweep, nine advisers were charged for advertising hypothetical performance to general audiences through websites and mass emails without proper screening procedures.

Penalty: A total of $850,000 in combined penalties were issued.

9. Ensure Fair and Balanced Risk Disclosures

What the Rule Says

Both SEC and FINRA rules require that any discussion of potential benefits in marketing materials must include a fair and balanced presentation of material risks with equal prominence. Firms are prohibited from using language or formatting that minimizes or obscures risks. All communications must provide investors with a sound basis to evaluate the product or service being promoted.

How to Ensure Compliance

• Use prominence testing: Verify that disclosures of risks are as visible and accessible as descriptions of benefits
• Create disclosure templates: Develop standardized language for common strategies to ensure consistency.
• Avoid minimizing language: Refrain from using qualifying words or phrases that downplay risks
• Perform Regular content audits: Review all marketing materials periodically to identify and correct potential imbalances

Real-World Breach Case

A broker at Stifel Financial Corp. misrepresented complex structured notes as low-risk investments without adequately disclosing the high-risk nature, lack of diversification, and potential for significant losses. The marketing materials failed to provide a fair and balanced presentation of risks relative to potential benefits.

Penalty: $132 million FINRA arbitration award against the firm, one of the largest in FINRA’s history, with a mandate to revise sales practices and disclosures.

10. Implement Proper Website Compliance and Disclosures

What the Rule Says

Both SEC and FINRA require firms to maintain compliant websites that provide clear, accurate, and accessible disclosures. Investment adviser websites must include key regulatory documents such as Form ADV Part 2 and Form CRS for retail investors, privacy policies, and all other required disclosures. Broker-dealers must ensure communications on websites are fair, balanced, and not misleading under FINRA Rule 2210, with appropriate risk disclosures and supervisory controls.

How to Ensure Compliance

• Create disclosure pages: Centralize all required regulatory documents (Form ADV Part 2, Form CRS, privacy policies)
• Implement SSL certificates: Ensure website security to protect client data and comply with cybersecurity standards
• Regular content reviews: Perform quarterly audits to confirm all disclosures are accurate and up to date
• Optimize for mobile: Verify that required disclosures are visible and functional on mobile devices
• Version control: Maintain records of all website changes and updates to demonstrate compliance history

Real-World Breach Case

In August 2021, the SEC sanctioned 21 investment advisers and 6 broker-dealers for widespread marketing rule violations, including non-compliant websites that failed to include updated Form ADV disclosures and misrepresented regulatory status.

Penalty: $1 million in combined fines, with individual firm penalties ranging from $10,000 to $100,000, and mandatory remediation of website disclosures within 60 days.

Marketing in Today’s Regulatory Environment

The SEC and FINRA issued over $588 million in penalties against wealth managers in 2024 alone.^[iii] This underscores the need for firms to embed compliance frameworks into their marketing strategies. The compliance tips discussed represent the surface of an increasingly complex regulatory environment that continues to evolve.

Expert Partnership is Imperative

At Finpact Media, we’ve built our firm exclusively around the intersection of financial services marketing and regulatory compliance. We bring together elite marketers, CFA-level financial expertise, and deep insight into marketing regulations. A combination that most firms and agencies cannot replicate.

We don’t just create marketing materials; we architect compliant strategies that enhance your brand, while driving measurable results.

Contact us today at info@finpactmedia.com

USEFUL RESOURCES

• SEC FAQ
• SEC SMALL ENTITY COMPLIANCE GUIDE
• FINRA RULES REFERENCE GUIDE

Frequently Asked Questions (FAQ)

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