December 22, 2020

ThinkAdvisor Seeks Jim Lundy’s Insight on the SEC’s New Ad Rule Allowing Client Testimonials

Partner Jim Lundy shares his reaction to the Securities and Exchange Commission’s (SEC’s) revamped advertising and marketing rules in the ThinkAdvisor article “SEC Adopts New Ad Rule, Allows Client Testimonials.”

According to the publication, the SEC’s updated rules allow advisors to use testimonials and endorsements, including traditional referral and solicitation activity, but are subject to certain conditions. The SEC also adopted related amendments to the investment advisor registration form and to the books and records rule, and Form ADV was amended to require advisors to provide additional information regarding their marketing practices to help facilitate the SEC’s inspection and enforcement capabilities.

Lundy called the revamped ad rule “positive.” The old rule, he told the publication, “was archaic and proscriptive, and no longer really appropriate for the way firms do business and communicate in the 21st century.”

Lundy further stated, “We’ll all need to wait and see how [SEC] examines for compliance with and how enforcement investigates potential violations of the new rule, but overall, this is positive for the industry.”

Full Article
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