SEC Eases Performance Marketing Rules: What Investment Firms Need to Know Now

After years of regulatory hand-wringing and compliance headaches, the SEC just dropped a game-changing update for investment marketers—and barely made a sound doing it. No press conference. No announcement. Just a quiet addition to an FAQ posted on March 19, 2025. But the impact? It’s seismic.

This long-overdue clarification finally gives investment advisers the green light to showcase gross-only and extracted performance data—without wrapping every stat in layers of net-fee disclosures and disclaimers. For marketers struggling with the complexity of the 2021 Marketing Rule, this update is the clarity they've been waiting for.

The Hidden Impact Behind the SEC’s Update

Since the 2021 Marketing Rule took effect, investment firms have been caught in a tricky spot. Want to highlight an outperforming stock pick or a particularly savvy sector strategy? That meant running the full net-of-fee gauntlet—even when it distorted the story or diluted the value proposition.

The result was content that ticked the compliance boxes but confused or bored its intended audience. Now, with the SEC’s latest clarification, firms can cut through the red tape and communicate performance in a way that’s not only compliant but compelling.

What You Can Now Include in Marketing Materials

Thanks to this update, advisers can now highlight:

• Single-security performance using gross-only figures—no need to estimate or subtract fees
  
  

• Sector-level performance and volatility metrics, even if they’re extracted from broader strategies
  
  

• Custom time periods—you’re no longer locked into the standard 1-, 5-, or 10-year views
  
  

• Representative account data, as long as you include the full composite for context
  
  

These changes open the door to more flexible, engaging, and investor-friendly storytelling. But there’s a catch.

The Compliance Conditions

To stay within the lines, advisers still need to follow a few critical rules:

• Label everything clearly: If it’s gross-only, say so.
  
  

• Show the full picture: If you highlight a metric, you must also provide the total portfolio performance (gross and net) for the same period.
  
  

• Be consistent: Time periods must align across all comparisons.
  
  

• Keep it clear: Avoid cherry-picking or presenting metrics in a misleading way.
  
  

These guidelines may sound restrictive, but they’re a far cry from the rigid disclosures of the past.

What’s Still Off-Limits

Some numbers remain firmly in net-of-fee territory. You’ll still need full disclosures for:

• Total Return
  
  

• Time-Weighted Return (TWR)
  
  

• Internal Rate of Return (IRR)
  
  

• Multiple on Invested Capital (MOIC)
  
  

• Total Value to Paid-In (TVPI)
  
  

If you're using any of these metrics, the old rules still apply.

Real-World Example: Then vs. Now

Before the update:

"NVIDIA returned 847% gross, 831% net, post-allocation, with estimated fees based on a representative account."

Now:

"NVIDIA returned 847% gross (before fees)."

That one line captures the spirit of this update. It’s not about hiding fees—it’s about telling a clearer story. For marketers, that’s a massive leap forward in transparency and effectiveness.

What Investment Firms Should Do Next

If you're ready to take advantage of this new flexibility, here’s where to start:

1. Audit your existing materials for outdated or excessive disclosures
   
   

2. Revise your ad review process to reflect the new guidelines
   
   

3. Train your marketing and compliance teams so everyone’s aligned
   
   

4. Update internal documentation and policies to reflect the change
   
   

5. Prepare for future audits by documenting rationale and approvals for performance content
   
   
   

Why Moving Fast Matters

This isn’t just a rule change—it’s a strategic edge. While others in the industry continue to clutter their communications with confusing footnotes, you have the chance to lead with clarity, confidence, and credibility.

By embracing the update early, you’re not just reducing risk—you’re raising your game. Investors want clean, powerful stories about performance. Now, you can finally tell them.

Bottom Line: The compliance bottleneck just broke open. The question is: how quickly can you capitalize on it?