The SEC recently published new rules on adviser marketing that became effective in May of 2021. The new rule brings together old advertising and solicitation rules and repackages them under one all-encompassing “Adviser Marketing Rule” that covers advertisements, testimonials, endorsements, solicitations, 3rd party ratings and hypothetical performance.
In a companion article entitled, Adviser Marketing: What’s an Advertisement? we explored the SEC’s new definition of advertisement. In a second article, Adviser Marketing: A New Day for Testimonials, we discussed the new SEC rules on testimonials and alluded to the fact that endorsements are regulated in much the same way. *Please check the bottom of this blog for all the Adviser Marketing articles in this series.
The difference between an endorsement and a testimonial is that a testimonial comes from a current client while an endorsement comes from anybody else. If you understand the rules surrounding testimonials, dealing with endorsements will be no problem.
Since the main difference between the testimonial and the endorsement is the promoter’s status as a client, one simply has to make sure that the promoter’s status as a current client (or in this case, a current non-client) is disclosed within the endorsement or at the time of the endorsement, clearly and prominently.
Other than that, the rules for endorsements are the same as the rules for testimonials. But just in case you missed downloading the checklist for testimonials in our previous articles, you can download the endorsement checklist below.
Other Articles in this Series: