The Securities and Exchange Commission abruptly pulled a highly anticipated discussion of changes to Investment Advisers Act advertising rules from its agenda Wednesday.
Commissioners were expected to discuss updating “rules that govern investment adviser marketing to accommodate the continual evolution and interplay of technology and advice, while preserving investor protections.”
The advertising issue is “a game changer” for the advice industry, said Michael B. Koffler, partner at Eversheds Sutherland law firm during a webcast last week. The proposal would permit advisors to use testimonials and endorsements in advertising.
“You have things like model performance that the commission proposed to really increase the standard very significantly, such that most advisory firms will not be able to show model performance to retail clients,” Koffler explained. “We’ll see if that continues. We’ll see what they do with the definition of advertisement. A lot of comments about how broad that proposed definition was.”
The advertising rules have not been changed since their adoption in 1961, wrote Karen L. Barr, president and CEO of the Investment Adviser Association in a comment letter earlier this year.
The IAA expressed general concerns with a rule that is “too broad” and would “blur the line between client servicing and marketing.”
It is unclear when the SEC will take up the advertising rule.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org. Follow him on Twitter @INNJohnH.
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