- The SEC’s Division of Examinations flagged widespread Marketing Rule deficiencies in advisers’ use of testimonials, endorsements, and third-party ratings.
- Common issues include disclosures that are missing, delayed, or not clear and prominent, plus weak oversight, missing promoter agreements, and improper payments to ineligible persons.
- Advisers also often lack a reasonable basis and required transparency for third-party ratings, including methodology, time period, and fee or relationship details.
- The SEC signaled continued exam focus and possible enforcement in 2026, so advisers (including private fund managers) should audit and tighten marketing compliance and documentation.
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The December 2025 SEC Risk Alert makes clear that, although the Marketing Rule under the Investment Advisers Act was amended in 2022, there is significant ongoing noncompliance among advisers in how they use testimonials, endorsements, and third-party ratings. In particular, advisers continue to fall short on disclosure obligations: required disclosures (such as whether someone endorsing the adviser is a client or whether they are being paid, and what conflicts exist) are often missing or hidden at the time promotional material is published.
Oversight and verification deficiencies are widespread. Firms often do not have written agreements with those they compensate (promoters, influencers), or do not properly vet rating providers’ methodologies or obtain sufficient detail about questionnaires or survey tools used in ratings. The issue isn’t that advisers are unaware of the rules—they often have updated policies—but they fail to ensure practical implementation, compliance monitoring, and documentation.
For private fund advisers, these observations are particularly consequential. Although much of the retail marketing world is under the microscope (influencers, online reviews, etc.), marketing practices in private capital (private equity, private credit) often rely on testimonials, performance snapshots, endorsements, and third-party recognitions. The same standards now being scrutinized in retail contexts carry over, with SEC staff noting private fund advisers explicitly in the Risk Alert.
Strategically, this means firms must treat this Alert not as a summary of historical missteps, but as a blueprint for what examiners will look at going forward. Even minor or “technical” violations (small font size, delayed disclosures, generic compensation disclosures) may trigger enforcement. Firms should revamp procedures, retrain staff, and audit all marketing materials—not just new ones but also legacy content—and ensure consistent application of policy across channels (website, social media, emails, presentations).
Open questions include: how the SEC will quantify “clear and prominent” in varied formats (digital vs print); how the treatment of influencers/promoters with prior disciplinary history will evolve; whether private fund marketing (which is often more opaque) will see more aggressive enforcement; and how firms can safeguard against inadvertent violations in large networks or through third-party intermediaries.
Supporting Notes
- The Risk Alert observes advisers using testimonials and endorsements without providing required disclosures at the time of dissemination—such as whether the promoter is a client, receives compensation, or has conflicts.
- Disclosures are often not “clear and prominent,” e.g. hidden in hyperlinks, small font, or low-visibility formats.
- Material terms of compensation to promoters frequently omitted or described only generically; gift cards and referrals without adequate disclosure are examples.
- Advisers failed to recognize when arrangements qualify as endorsements and often lacked written agreements with paid promoters or influencers.
- Prohibition on compensating “ineligible persons” is sometimes breached—e.g. promoters with disciplinary histories paid despite disqualification under the Rule.
- Third-party ratings show recurrent deficiencies: missing provider identification, undisclosed rating date or time period, and absent disclosure of fees or relation with rating provider.
- Due diligence on ratings often superficial: many advisers do not examine questionnaire/survey design or obtain methodological details to satisfy the Marketing Rule’s “reasonable basis” requirement.
- The risk alert emphasizes that while many failures are in retail contexts, private fund advisers are also mentioned and expected to comply identically.
- Even though many firms updated written policies, SEC staff found the gap between policy and execution: inconsistencies and failures in implementation.