Marketing a financial advisory practice looks very different than it did even a decade ago.

Advisors aren't just placing traditional advertisements. They're posting on LinkedIn, sharing articles, appearing on podcasts, displaying Google reviews, promoting awards, using lead-generation services, sending newsletters, and publishing educational content.

All of those activities can create compliance considerations under the Investment Advisers Act Marketing Rule.

During a recent Financial Experts Network webinar, securities attorney Michelle Atlas-Quinn walked advisors through the Marketing Rule and, perhaps more importantly, what she's seeing as firms prepare for and undergo SEC examinations.

One message came through clearly: Marketing compliance isn't just about what you say. It's also about whether you can prove it, document it, and demonstrate that your firm followed an appropriate review process.

You May Be Advertising Even If You Don't Think You Are

Early in the webinar, attendees were asked whether they use advertisements in their businesses. About two-thirds initially said they didn't.

Michelle's response was essentially: Do you have a website?

If so, you're probably doing some form of advertising.

The Marketing Rule's reach is broader than what many advisors might traditionally consider an advertisement. Direct or indirect communications to more than one person can qualify, while certain communications involving hypothetical performance can fall within the rule even when sent to only one person.

Compensated testimonials and endorsements can also be covered, and compensation doesn't necessarily have to be cash. Reduced advisory fees, gifts, entertainment, reciprocal referrals, and other benefits can potentially enter the analysis.

For advisors, the practical lesson is to stop thinking about “advertising” as simply a brochure or paid advertisement.

Your website, email campaigns, social-media activity, referrals, client reviews, awards, videos, and podcasts may all deserve a place in the firm's marketing compliance process.

Can You Prove What You're Saying?

The basic principles behind compliant advertising sound relatively straightforward.

Don't make false or misleading statements. Don't omit material information. Don't cherry-pick favorable information. Don't discuss benefits without fairly addressing material risks.

But Michelle emphasized another requirement that firms can easily overlook: substantiation.

Suppose your website says your firm provides “highly customized, comprehensive, independent, objective wealth management.”

Those may sound like ordinary marketing words.

But what does “customized” mean? What makes the firm's services “comprehensive”? What supports the claim that they're “independent” or “objective”?

During the Q&A, Michelle used this exact type of tagline to illustrate how seemingly simple marketing language can create a substantiation question.

That's an important exercise for advisors: Read your website as if you were an examiner and ask what evidence you have for every significant claim you're making.

Be Careful What You Share

Sharing someone else's content can feel different from creating your own.

Under the Marketing Rule, that distinction isn't always enough.

Michelle spent considerable time discussing adoption and entanglement.

If an advisor reposts, links to, quotes, endorses, or otherwise approves third-party content, the firm may effectively adopt that content. If the advisor participates in preparing or shaping the third party's communication, the firm may become entangled with it.

Consider a podcast interview.

You spend 30 minutes talking with a host about markets, retirement planning, or your investment philosophy. During a live conversation, you may phrase something imperfectly or make a statement you wouldn't normally include in approved marketing material.

Later, the podcast is published and your firm wants to share it on its website and social media.

At that point, the compliance question changes.

Michelle recommended reviewing the content before republishing it and retaining the appropriate records of what was ultimately used.

The same caution applies to LinkedIn and other social platforms. Reposting, linking, and directing people to third-party content shouldn't automatically be treated as compliance-free simply because someone else originally created it.

What About Google Reviews?

This was one of the most practical questions raised during the webinar.

Suppose clients independently leave glowing Google reviews about your firm. You didn't solicit them, compensate the clients, or control what they wrote.

Michelle explained that those reviews sitting independently on Google's platform are different from the firm taking the reviews and using them in its own marketing.

Once you put those reviews on your website or direct people to them through your social-media channels, you've potentially adopted them for marketing purposes.

That's when testimonial requirements become important.

A testimonial generally involves a current client's experience with the advisor. An endorsement generally comes from someone other than a current client—perhaps an attorney, CPA, blogger, lead generator, or another referral source.

Using those statements may require clear and prominent disclosures concerning the relationship, compensation, and material conflicts of interest.

Referrals Aren't Always as Simple as They Seem

Most financial advisors rely on referrals.

But there's a difference between a client recommending you simply because they're happy with your work and a referral arrangement involving compensation.

And compensation isn't always obvious.

Imagine that a CPA routinely refers clients to your firm and you routinely refer tax clients back to the CPA.

No check changes hands.

But the reciprocal business could potentially represent non-cash compensation, making it important to analyze the arrangement and determine what Marketing Rule requirements apply.

Michelle discussed this issue in response to a question involving business networking referrals. Her recommendation was practical: analyze the relationship and keep documentation supporting the firm's conclusion.

For advisors, that means looking beyond formal solicitor agreements.

Ask: Who sends us business? Who do we send business to? Are there gifts, entertainment, fee reductions, reciprocal referrals, or other benefits associated with those relationships?

Performance Advertising Requires Another Level of Care

Most attendees in the webinar said they weren't currently using performance advertising.

For firms that do, the requirements can become much more detailed.

Performance presentations may involve gross and net performance, prescribed time periods, and appropriate disclosures. The rule also addresses hypothetical, extracted, predecessor, and related performance.

One recurring theme is consistency.

An advisor shouldn't cherry-pick the strongest account from a group of similar strategies or select time periods simply because they make performance appear better.

Hypothetical performance presents additional considerations involving assumptions, methodology, risks, limitations, policies, procedures, and the intended audience.

And if you're relying on an exception because a client made an unsolicited request for information?

Keep the email.

Documentation showing that the client actually initiated the request may become extremely important if the firm later needs to explain why the information was provided.

That “Top Advisor” Award May Need More Explanation

Who doesn't want to tell prospective clients that they were named one of the area's top financial advisors?

The Marketing Rule doesn't necessarily prohibit firms from using third-party ratings and rankings, but simply displaying the award may not be enough.

Advisors should understand how the award was determined.

Was there a survey? Who received it? Could respondents provide negative as well as positive feedback? Was the ranking based solely on assets under management? Did the firm pay an application fee? Did it have to purchase advertising or licensing rights to display the award?

Disclosures may need to identify who created the rating, when it was awarded, what period it covered, and whether compensation was involved.

There's also the issue of age.

An award received years ago shouldn't appear in a way that could lead someone to believe it represents a current ranking.

Michelle noted that examiners can identify these issues before ever contacting a firm simply by reviewing its public website and online presence.

Here's a Simple Compliance Tip: Don't Just Save the Link

This may have been one of the most useful takeaways from the entire session.

Imagine your firm publishes a newsletter containing a material statistic from an outside article.

You keep the link as your substantiation.

Two years later, an examiner asks where the statistic came from.

You click the link.

Page not found.

Now what?

Michelle recommended keeping an actual PDF or screenshot of the supporting information, rather than relying exclusively on a URL.

Websites change. Articles disappear. Pages move.

If the information supports a material factual claim in your marketing, preserve what you relied upon at the time.

That's a relatively simple procedure that could prevent a much more difficult conversation during an examination.

Your Marketing Company Isn't Your Compliance Department

Outsourcing marketing can make sense for an advisory firm.

Outsourcing responsibility for compliance doesn't work the same way.

A marketing company might tell you its materials are designed for financial advisors or are “compliant,” but Michelle emphasized that someone at the advisory firm should still review the content.

And the firm should be able to show that the review actually happened.

That means retaining records of who reviewed the marketing, when it was reviewed, and whether it was approved or changed.

The same thinking applies to lead-generation services, social-media providers, influencers, website companies, and other vendors.

The more outside organizations involved in your marketing, the more important vendor oversight becomes.

A Compliance Manual Isn't Enough

It's relatively easy to put a policy in a compliance manual.

The more important question is: Does the firm actually do what the policy says?

Michelle encouraged firms to move from passive policies to active, documented workflows.

That can mean establishing procedures for marketing approvals, substantiating claims before publication, reviewing employee communications, monitoring vendors, checking required disclosures, and confirming that archiving systems are actually preserving the records they're supposed to preserve.

Those procedures don't have to look the same at every firm.

A large RIA may have sophisticated compliance software that automatically archives websites and social-media activity. A solo advisor may use spreadsheets, PDFs, screenshots, and organized electronic folders.

The standard is ultimately about having procedures appropriate for the firm's business—and then actually following and testing those procedures.

Five Questions Financial Advisors Should Be Asking

1. Does everything we call “marketing” match what regulators might consider marketing?
Probably the most important first step is identifying the firm's entire marketing footprint—including websites, social media, emails, podcasts, testimonials, referral arrangements, performance information, and third-party awards.

2. Could we substantiate the claims on our website today?
Look beyond obvious statistics. Words such as “best,” “independent,” “objective,” “comprehensive,” or “customized” may also raise questions about what supports the claim.

3. Are we accidentally adopting third-party content?
Review what the firm and its employees repost, link to, quote, or promote through social media and other channels.

4. Are our vendors creating compliance risks we haven't considered?
Using a marketing company, lead generator, referral network, or social-media provider doesn't eliminate the firm's responsibility to review what is being done on its behalf.

5. If the SEC asked for our marketing records tomorrow, could we produce them?
That may be the most revealing question of all. Could you show the advertisement, who approved it, the evidence supporting its claims, applicable disclosures, performance calculations, historical website versions, and other required records?

The Bottom Line

The Marketing Rule doesn't mean financial advisors should stop marketing.

It means firms should build compliance into the way they market.

Before publishing something, ask whether the claims are accurate and balanced. Determine whether they can be substantiated. Understand where testimonials, endorsements, compensation, ratings, and performance information create additional requirements. Review third-party content before adopting it. And preserve the records that explain what you published, why you believed it was appropriate, and who approved it.

Perhaps the most useful lesson from Michelle's presentation is also the simplest:

Don't wait for an SEC examination to figure out whether your marketing compliance process works.

A firm that consistently reviews, documents, substantiates, and archives its marketing will be in a much better position when regulators eventually ask to see it.