The following article appeared in the November 2017 issue of the National Society of Compliance Professionals' monthly newsletter Currents. It was written by ACA's Mark W. Lawler.
Communicating with prospective clients and investors is a critical component of many advisers’ business development programs. SEC-registered investment advisers will likely engage in marketing and/or advertising activities that require knowledge of and compliance with Rule 206(4)-1(the “Advertising Rule”) under the Investment Advisers Act of 1940 (the “Advisers Act”). In addition, advisers should ensure their marketing and advertising practices comply with SEC guidance concerning advertising and marketing issues. Marketing materials used to communicate with prospective clients and investors include presentation (or pitch) books, requests for proposals, due diligence questionnaires, quarterly newsletters, strategy fact sheets, and the adviser’s website, to name a few.
In this article, I discuss the Advisers Act requirements and SEC guidance relating to an investment adviser’s use of marketing/advertising materials with prospective clients and investors. I will also provide a summary of the SEC’s recent risk alert addressing advertising issues, and then highlight recent amendments to the books and records rule concerning performance returns.
Click here to read the article.