Series 65: 10.6.2.2. Prohibited Advertising Practices

10.6.2.2. Prohibited Advertising Practices

The primary goal of the Marketing Rule is to ensure that an investment adviser’s communications with clients or the public are honest and transparent. The rule outlines seven advertising practices that are prohibited.

1. No untrue statements or omissions of material facts. Advertisements cannot make any statement that is not factually accurate or omit any information necessary to make that statement true.

2. No unsubstantiated statements. Advertisements cannot make any statements of material fact that are not verifiable. IAs hold the responsibility of recording all documentation needed to substantiate a statement. This does not include statements that are clearly statements of opinion.

3. No statements that imply something untrue or misleading. Advertisements cannot make statements that would be reasonably likely to cause someone to make an incorrect inference about a material fact.

4. No discussion of benefits of IA services without a fair and balanced discussion of material risks. The nature of investing is that gains entail a certain amount of risk. While advertisements do not have to include every possible risk, they should disclose a balanced presentation of the risks associated with the benefits of a given service or investment.

5. No “cherry picking” when referencing past advice. The IA must present the succ