Seven no-no’s in new SEC ad rule

Things an advisor should not do when it comes to advertising.

The sweeping new SEC advertising rule contains a list of seven things an advisor should not do related to advertising:

  1. Include any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statement made, in the light of the circumstances under which it was made, not misleading;
  2. Include a material statement of fact that the advisor does not have a reasonable basis for believing it will be able to substantiate upon demand by the Commission;
  3. Include information that would reasonably be likely to cause an untrue or misleading implication or inference to be drawn concerning a material fact relating to the investment advisor;
  4. Discuss any potential benefits to clients or investors connected with or resulting from the investment advisor’s services or methods of operation without providing fair and balanced treatment of any material risks or material limitations associated with the potential benefits;
  5. Include a reference to specific investment advice provided by the investment advisor where such investment advice is not presented in a manner that is fair and balanced;
  6. Include or exclude performance results, or present performance time periods, in a manner that is not fair and balanced; or
  7. Otherwise be materially misleading.