The SEC found some financial advisors failing to comply with ad rule disclosure requirements, risking future enforcement actions. The rule changes in effect since May 2021 dictate how and when testimonials and endorsements can be used in advertising, creating concerns for compliance officers in the industry.

SEC staff highlighted issues of firms using testimonials without necessary disclosures or compensating ineligible promoters. The most recent risk alert revealed deficiencies in maintaining written agreements and handling third-party ratings, indicating potential future enforcement actions if operational issues are not addressed promptly.

Laura Arnott from Vigilant emphasized the importance of substantiation and disclosure in marketing content for financial advisors. She stressed the need for robust approval processes, evidence file maintenance, and periodic content reviews to prevent inadvertent violations of ad rule requirements.

Read more at Yahoo Finance: SEC Finds Some Advisors Still Missing Ad Rule Disclosure Requirements