IA Marketing Rule Counsel
April 28, 2025
The SEC’s Investment Adviser (IA) Marketing Rule has reshaped how advisers can promote their services. Effective since November 2022, the rule reflects advancements in technology, emerging threats, and evolving investor needs while offering advisers more flexibility in their marketing efforts. However, with these new allowances come stringent compliance requirements and increased regulatory scrutiny on potential violations.
Investment adviser marketing efforts may include the following, provided they comply with SEC regulations relating to:
The SEC continues to prioritize enforcement of the Marketing Rule, particularly as firms increasingly misrepresent their use of artificial intelligence (AI) in their services.
Recent SEC enforcement actions have targeted firms that falsely represented or exaggerated their use of AI, a practice known as “AI washing.”
In the investment space, AI washing can involve misleading statements about AI-driven investment strategies, automation capabilities, or predictive analytics. The SEC has taken action against companies that make false or misleading claims about their use of AI without substantive backing.
On March 18, 2024, the SEC released a Press release on enforcement actions taken against two investment advisers for making false and misleading statements about how AI was used in business operations.[1]
In April 2024, the SEC released a Risk Alert[2] on initial observations on compliance with the Marketing Rule on findings from examinations of investment advisers’ adherence to the Marketing Rule.
It is essential for firms to ensure their marketing accurately represents their services, especially when incorporating evolving technologies.
With these regulatory shifts and heightened scrutiny, firms must carefully review their marketing materials, ensure proper disclosures, and implement robust compliance protocols to mitigate risks. Additionally, firms integrating AI into their services and marketing must ensure transparency and substantiate all claims.
Navigating these evolving regulations can be complex, but our team is here to help. Whether you need guidance on compliance strategies, a review of your marketing materials, or insights into AI-related regulatory risks, Jacko Law Group can assist.
For more information and assistance, call 619.298.2880 or email [email protected].
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[1] U.S. Securities and Exchange Commission. SEC Charges Two Investment Advisers with Making Misleading Statements About Use of Artificial Intelligence. 18 Mar. 2024, https://www.sec.gov/newsroom/press-releases/2024-36
[2] U.S. Securities and Exchange Commission. Initial Observations Regarding Advisers Act Marketing Rule Compliance. SEC.gov, 17 Apr. 2024, www.sec.gov/compliance/risk-alerts/risk-alert-041724.
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