The SEC’s Marketing Rule: A Year Later, More Like a Wet Blanket Than a Fireworks Show

New York, NY (October 26, 2024): Remember that whole “modernization and flexibility” thing everyone was hyped about with the SEC’s Marketing Rule? Yeah, about that… Turns out it’s been more like a buzzkill than a party for investment advisors, who are now drowning in new compliance headaches, according to a recent survey.

Remember back in November two years ago when this whole thing rolled out? The goal was to drag those dusty old advertising rules into, you know, this century. Fast forward to now, and a survey of SEC-registered investment advisors (RIAs) by the law firm Seward & Kissel LLP is basically saying, “Yeah, not so much.”

From High Hopes to Eye Rolls: The Reality Bites

At first, the industry was all ears, excited about the prospect of simpler rules. But, as they say, the devil’s in the details, and those details have been a real pain in the you-know-what.

“There was this, like, total buzz about how this rule would make advertising smoother,” said Paul Miller, a partner at Seward & Kissel and co-author of the survey. “But that’s totally fizzled out. Now it’s just a bunch of advisors feeling lost and confused about what they can and can’t do.”

Survey Says: It’s a Big ‘Ol Mess

This survey didn’t hold back. It basically threw some serious shade on the whole situation, highlighting all the ways the Marketing Rule has been a big ol’ flop:

• Crickets on the Advertising Front: Remember that whole “flexibility” thing? Yeah, not happening. A whopping seventy percent of advisors said they haven’t changed a thing about how they use past client shoutouts in their ads, even though that was supposed to be a big area for improvement.
• Social Media’s Like, “What Rule?”: Eighty-six percent of RIAs said the rule hasn’t changed how they do things on social media. Talk about a big yawn.
• Compliance Nightmare: A ton of fund managers are basically drowning in paperwork, spending way too much time and money trying to check all the compliance boxes. Get this: about a third of them are stuck doing this compliance song and dance for fifty hours or more!