In November, the SEC proposed an overhaul to the rules under the Investment Advisers Act of 1940 pertaining to advertisements. The last time these rules were updated in any significant way was 1961. Yes, you read that correctly: 1961. JFK was inaugurated that year. The Berlin wall went up. Color television was a new thing. Home computers were…not invented.
To put it mildly, things have changed. Chief among them are the ways in which people communicate, consume information, and use technology to engage with one another. Unfortunately, while the rest of the world grew with the advents of the internet, smart devices, social media, and targeted advertising, investment advisors were left with their proverbial thumbs in the wind as other industries and their prospective clients passed them by.
The new rules would allow advisors to better tell their story and share how they think through different marketing channels. Additionally, testimonials and endorsements will be permitted (with the proper disclosures of course). Critically, the proposed amendments take a “principles-based” approach rather than applying flat rules without consideration of specific circumstances. In other words, as long as you continue to be honest, fair, and balanced, many of the limitations that have stagnated your marketing and communications efforts in the past will be significantly less cumbersome.
The shackles are set to be removed (or at least loosened), and advisors will undoubtably explore new and different ways to reach target audiences. As they do, they should consider this advice: be consistent. Regardless of where or how you are distributing your story and other pieces of content, there must be a central strategy and message. Without one, it will become very clear, very quickly, that not only are you disingenuous, but you also lack focus and discipline – none of which are ideal adjectives when seeking trust and credibility.
More freedom in financial services marketing means quite a bit to us: we expect to be able to apply more best practices and open doors for advisors looking to define, refine, or expand their firms.
