Regulatory & Compliance | 10.16.26

Brokers May Tout Performance Projections, Same as RIAs, SEC Says

by: Miriam Rozen

The U.S. Securities and Exchange Commission (SEC) approved a Financial Industry Regulatory Authority (FINRA) rule change allowing brokers and their firms to include investment performance projections and targeted returns in marketing materials for certain clients and prospects. The change narrows regulatory differences between brokers and registered investment advisors (RIAs). Firms must establish written policies ensuring projections suit their intended audiences and disclose assumptions, risks and limitations. However, the rule omits an explicit requirement to document a reasonable basis for projections, and brokers may present projected returns without deducting fees and commissions. FINRA has not announced an effective date. The change comes amid broader efforts to review financial industry regulations and enforcement practices.

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