SEC’s new marketing rules mean transformative change for advisory firms

The SEC recently made significant amendments to the Investment Advisers Act of 1940 that introduce the most sweeping changes to financial adviser marketing we’ve seen in the past 60 years, since advertiser rules were added to the Act in 1961.

What do the new rules say? What new possibilities do they open up? And how can advisers capitalize on the change?


For the past 60 years, financial adviser marketing was governed (and limited) by the Advertiser Rules of 1961. These rules were added to the Investment Advisers Act in a time and market that were completely different from today. Social media didn’t exist; the internet itself was a decade away. In 1961, marketing meant print, TV, billboards and little else. These rules were not written with digital marketing in mind, which caused confusion as the advisory landscape began to shift and adapt.

Moreover, they were written in the Mad Men era; marketers in the late ’50s and early ’60s were notorious for playing hard and fast with the truth, and consumer protection as a concept was still in its infancy. The original Advertiser Rules were very broad, and a bit overzealous. They were joined by the 1979 Solicitor Rules, which made reaching clients even more of a challenge. One of the biggest issues with the rules was that they did not allow financial advisers to promote client testimonials.

Feedback and testimonials from real clients are a key part of the advertising strategy in every other service industry. Genuine testimonials help prospective clients understand the services and experience they can expect. The SEC’s update folds financial adviser advertising, marketing and soliciting into a single Marketing Rule for greater consistency. They also “evergreen” the definition of an advertisement, to bring digital media under their ambit. But as far as advisers are concerned, the most significant change is that the amended SEC rules allow for the promotion of user testimonials.

[More: Advice firms ‘champing at the bit’ over new advertising rule]


The new “two-pronged” definition broadens the scope of advertisements to include most types of many-to-one communication, including digital and social media. This does not increase your compliance burden: Even before the act, your digital ads and promotions came under the general consumer protection statutes.

However, it gives advisers a clearer picture of the SEC’s thought process and where regulations are expected to go. In short, the SEC sees digital as the future of financial adviser advertising. Advisers can lean more on digital, confident that regulations and compliance will become easier, clearer and more effective in the years to come.


The financial advisory industry is built on trust and relationships. Word-of-mouth from satisfied clients has always been an important channel for generating new business. Now, instead of relying on informal networking channels, advisers can directly reach out to potential clients and share testimonials. Testimonials can also be incorporated into social media campaigns, as well as pay-per-click and other digital marketing channels. By incorporating these changes into your existing digital marketing strategy, you can turbocharge word-of-mouth and encourage prospects to take action.


If you already have a digital marketing strategy in place, thought leadership, awareness and education are likely to play important roles. Because of the earlier regulations, your current digital ad presence focuses on capabilities and potential, with less emphasis on social proofing. This undoubtedly helps build awareness and demonstrate your expertise to prospects with whom you have an existing relationship.

However, this approach is much less effective at generating trust and building relationships with completely new prospects. By adding testimonial and user reviews to your local search engine optimization efforts, and by building client stories directly into your social and pay-per-click ads, you’ll be able to reach a much wider range of potential users. This will help you build client relationships from the very beginning, with search results and social posts where real clients tell real prospects exactly how your advisory firm helped them succeed.

[More: Social media has changed, but here’s one thing that never will]

Robb Fahrion is partner with Flying V Group, which assists companies with digital marketing and advertising.

PIABA pushes for more transparency on firm culture

You May Also Like

Leave a Reply

Your email address will not be published. Required fields are marked *