SEC Risk Alert: Marketing Rule Missteps

The SEC’s Division of Examinations published a new Risk Alert on December 16, 2025, outlining additional observations regarding compliance with the Marketing Rule. The recent observations focus on testimonials, endorsements, and third-party ratings.

If your firm is using client quotes, paying promoters, highlighting Google reviews, or featuring award badges, this update matters. Below are the key takeaways RIAs should know,  and where firms are still getting tripped up.

Testimonials and Endorsements 

1. The most common reason an endorsement or testimonial was observed to be non-compliant was failure to provide the required disclosures at the time the testimonial or endorsement was disseminated.

Many advisors or promoters provided the endorsement, and the disclosure was provided only during the introduction or meeting with the advisor.

• Pro-Tip: When Promoters/Solicitors are giving an endorsement/referral/recommendation to work with an advisor, the disclosure must be provided at that time. Make sure your Promoter/Solicitor is complying not only with the disclosure requirements, but also with their timing.

2. The SEC also observed advisors utilizing lead-generation firms, social media influencers, and advisor referral networks, and offering “refer-a-friend” programs to current clients for de minimis compensation. In some instances, the RIA did not realize that some of these arrangements created testimonials or endorsements.

• Pro-Tip: If you have referral programs, such as clients referring prospective clients to your firm, you may be subject to disclosure requirements, as these can be seen as endorsements.

3. Solely providing disclosures is not enough. Disclosures must also be clear and prominent. For example, the SEC observed that advisors used hyperlinked disclosures within the testimonial or endorsement that were not clear and prominent because the disclosures were in a smaller or lighter font than the testimonial or endorsement to which they were linked.

• Pro-Tip: It might not look aesthetically pleasing, but let your website and/or marketing designers know that they cannot hide or make the disclosures less prominent. Clients should be able to read the disclosure right next to the testimonial or endorsement.

4. The SEC observed advisors who advertised testimonials or endorsements from third-party websites without clearly and prominently disclosing that those testimonials and endorsements were provided by current or former clients.

• Pro-Tip: Many advisors or marketing professionals embed Google or Yelp Reviews directly onto an advisor’s website. If these reviews do not incorporate the required disclosures, your firm will be in violation. Try to avoid these embedded reviews.

5. The SEC observed advisors who provided clients with gift cards for writing reviews on third-party websites; however, they did not appear to have a basis to reasonably believe that the person giving the testimonial complied with the disclosure requirements for paid testimonials.

• Pro-Tip: Compensating any person for client referrals, whether that’s reducing their advisory fee, gift cards, or other forms of cash or non-cash benefits, is considered a paid testimonial or endorsement and can even open another can of worms, such as solicitor registration requirements. Avoid these types of incentives.

6. The SEC observed advisors providing generic disclosures about compensation arrangements that omitted certain material information. For example, RIAs disclosed that promoters, including social media influencers, received compensation for client referrals but omitted material information about payment terms.

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  Pro-Tip: Disclosures must disclose the compensation. For example, is it an ongoing portion of the AUM fee, a recurring fixed fee, a one-time fee, or something else? Just stating that the endorsement resulted in compensation is not enough.

7. Promoters who were disqualified due to their disciplinary histories with state securities regulators received compensation for endorsements, when ‘ineligible’ persons are prohibited from receiving compensation for endorsements.

• Pro-Tip: It is your responsibility to check if a Promoter has disciplinary events that prevent them from qualifying as a Promoter. Send the Promoter a questionnaire that asks a series of questions to detect eligibility.

Third-Party Ratings

1. Advisors had not taken steps to meet their due diligence requirement, such as having a reasonable basis for believing that questionnaires or surveys used had balanced questions and were not designed to obtain a predetermined result. 

• Pro-Tip: Before advertising a third-party rating, make sure you have a copy of how the rating was determined and a copy of the questionnaire or survey used to determine it. 

2. Advisors that included third-party ratings in their advertisements that did not clearly and prominently identify the date on which the ratings were given and the period of time upon which the ratings were based.

• Pro-Tip: Remember the third-party rating disclosure requirements:
  • The date on which the rating was given and the period of time upon which the rating was based;
  • The identity of the third party that created and tabulated the rating, and
  • If applicable, that compensation has been provided directly or indirectly by the advisor in connection with obtaining or using the third-party rating.

3. Advisors placed third-party rating logos in their advertisements that did not clearly and prominently identify the third party that created and tabulated the ratings (i.e., the logo did not clearly identify the third parties, and the advisors did not otherwise clearly and prominently include such disclosures). Advisors must also disclose whether enhanced exposure was paid for through third-party providers’ advertisements. 

• Pro-Tip: Avoid just putting the rating image without the disclosure next to it. 

4. Advisors that did not provide the required disclosures in a clear and prominent manner (e.g., using hyperlinks for the disclosures that were required to be “clear and prominent,” using smaller text font for disclosures, and placing the disclosures at the bottom of the website pages away from the actual ratings).

• Pro-Tip: Disclosure must be next to the rating and be prominent. Check your website and email signatures to ensure these ratings are displayed, and make sure you're adding the disclosures in compliance.