New Additions to Form ADV: Marketing Rule

November 11, 2021

In May 2021, the SEC introduced changes to the advertising and cash solicitation rule now referred to as the “Marketing Rule”—given in Rule 206(4)-1 under the Investment Advisers Act of 1940.

The Marketing Rule is now a part of item 5 Part 1A (L) in the Form ADV, and is required to the disclosed by all investment advisers filing Form ADV.

This Marketing Rule focuses on incorporating new forms of advertising such as social media and third-party platforms by modifying the definition of “advertisement.”

Disclosure Inclusions in Form ADV 

  • Advertisements include any direct or indirect communication from an adviser to more than one person that offers the adviser’s investment advisory services, or that offers new services to existing clients.
  • All indirect communications such as third-party social media comments endorsed/ promoted by the adviser, and nonwritten communications ( pre-recorded videos) are also treated like advertisements, subjecting them to be appropriately disclosed.
  • Hyperlinks and layered disclosures will be permitted subject to certain conditions.

Exclusions from the Rule

  • Does not cover one-on-one communications with prospective or current investors in private funds
  • Description of material terms, objectives and risks of a fund offering included in private placement memoranda and other similar documents delivered to existing investors in private funds; and presentations to existing clients, are not considered as advertisements under the Marketing Rule

SEC Regulations for Adviser Advertisements

  • Advisers aren’t allowed to include advertisements that contain material statements that the adviser does not have a reasonable basis to believe in
  • Advisers cannot advertise any gross performance unless the advertisement also presents a net performance that meets certain criteria.
  • Advisers are prohibited from presenting the performance results of any portfolio or any composite aggregation of related portfolios, other than any private fund
  • Advisers are prohibited from advertising related performance unless it includes all related portfolios, subject to a conditional exception
  • Advisers are prohibited from advertising extracted performance, unless the advertisement provides, or offers to provide promptly, the performance results of the total portfolio from which the performance was extracted
  • Advisers are prohibited from advertising predecessor performance, unless certain conditions are satisfied
  • Advisers cannot advertise hypothetical performance.
  • Advisers are prohibited from including third-party ratings in advertisements unless they comply with the rule’s general prohibitions and additional conditions.


Compliance Timeline

Investment advisers will have an 18-month transition period—until November 4, 2022—to comply with the Marketing Rule, amended books and records rule, and Form ADV. Early compliance is permitted, as long as the new rules are complied with fully. Partial compliance is not permitted.

The Marketing Rule requires Advisory firms to follow set guidelines when advertising their services and refrain from using ambiguous/ unreliable marketing tactics, this, in turn, safeguards investors’ interests.

Few firms have started disclosing their marketing activities in the recent 10/2021 Form ADV.

You can access all recently filed Form ADVs via RADiENT. For more information or any feedback please write to us at


About the Author

Jasmeet Sodhi

Jasmeet is an avid researcher and heads growth and marketing strategy development for RADiENT. Jasmeet previously interned at multiple startups where she developed a passion for marketing and content. She holds a Master’s in economics and international affairs from SOAS, University of London and a Bachelors in Economics from Ashoka University. In her free time, Jasmeet enjoys running and reading.

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