AIMA Webinar Replay: The SEC Marketing Rule 360: Specific Investment Advice: Navigating the Principles of “Fair and Balanced” Under the Marketing Rule

Published: 16 June 2022

Recorded on June 15, 2022
References to specific investments in advertising has long posed difficulties for investment advisers, who were left to navigate a series of restrictive conditions set forth in numerous narrowly focused no-action letters written over decades. The SEC has historically termed these references as “past specific recommendations” - irrespective of an adviser’s intent to provide color on overall performance or demonstrate an investment process, rather than suggest that specific investment advice is representative of an investment strategy.

The new Marketing Rule has done away with these prescriptive conditions, replacing them instead with a principles-based approach that focuses on “fair and balanced” treatment of specific investments made or recommended by an adviser. Now referred to as “specific investment advice,” an adviser may refer to specific investments so long as it is done in a manner that does not misrepresent performance or mislead the reader. However, the SEC did not provide a safe harbor or examples that would satisfy the new “fair and balanced” standard.  This leaves investment advisers with  greatly expanded options for presenting their funds and strategies, but much trepidation for compliance officers who are now tasked with determining where to “draw the line.” What is “fair and balanced” in the eyes of the SEC?

On Wednesday, June 15, with attorneys Michael McGrath and Pamela Grossetti of K&L Gates to discuss the treatment of “specific investment advice” under the Marketing Rule, and how advisers can become comfortable with “fair and balanced” standards for references to specific investments going forward. Audience questions are welcome and encouraged.
•    Mike McGrath, CFA, Partner, K&L Gates
•    Pamela Grossetti, Of Counsel, K&L Gates
•    Suzan Rose, Senior Advisor, AIMA

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