Performance Claims in Financial Marketing: What You Can (and Can’t) Say About Returns

Performance claims are the single riskiest category in financial marketing. A number that looks great in a pitch deck can turn into a real compliance problem the moment it appears in an ad or on a landing page without the disclosures the SEC Marketing Rule requires around it.

The Past-Performance Disclosure Every Claim Needs

Any reference to past performance needs to be presented fairly and in a way that isn't misleading, which in practice means showing performance net of fees, over a period long enough to be meaningful, alongside the required disclosure that past performance doesn't guarantee future results. A single standout return figure pulled out of context, without that framing, is exactly the pattern the rule is designed to catch.

Why Hypothetical and Backtested Performance Data Faces Extra Scrutiny

Hypothetical performance, model portfolios, backtested results, and targeted or projected returns are allowed under the Marketing Rule, but they come with additional conditions: the firm has to adopt policies reasonably designed to ensure the information is relevant to the audience it's shown to, and provide enough underlying information for that audience to understand the criteria and assumptions used. Showing a backtested return to a general retail audience without that context is one of the more common ways firms run into trouble.

Cherry-Picking Results: What the SEC Marketing Rule Explicitly Prohibits

The rule specifically prohibits presenting performance results in a way that isn't fair and balanced, showing your three best-performing accounts while leaving out the ones that underperformed is the textbook version of this violation. If you're going to reference specific account or portfolio performance at all, the presentation needs to reflect the full, representative picture, not the highlight reel.

Safer Ways to Demonstrate Value Without a Performance Claim

Process, methodology, credentials, tenure, and educational content generally carry far less compliance risk than any number tied to returns. Explaining how you build a financial plan, what your research process looks like, or what questions you ask before recommending a strategy lets you demonstrate expertise and build trust without touching the disclosure requirements that come with a performance number.

Tridigiam writes financial marketing content with this distinction in mind by default, but we're not a compliance or legal firm, and any specific performance-related content should go through your compliance team before it publishes. For the broader picture on financial services marketing, see our Financial Services Marketing guide.

Frequently asked questions

Can I advertise a specific historical return on my website?

Only with the required disclosures attached: net-of-fee presentation, an appropriate time period, and the standard disclaimer that past performance doesn't guarantee future results. Without those, it's a compliance risk regardless of how accurate the number is.

Are hypothetical performance projections allowed at all?

Yes, under the Marketing Rule, but only with policies ensuring relevance to the specific audience and enough disclosure for that audience to understand the assumptions behind the projection.

What's the risk of showing only my best-performing accounts?

It's a direct violation of the rule's fair-and-balanced requirement. Selective performance presentation is one of the more commonly cited issues in SEC examinations of adviser marketing.

Is it safer to just avoid performance numbers entirely?

For most firms, yes, in the sense that process- and credential-based content carries far less compliance overhead than any performance claim. Performance claims aren't prohibited, but they require a level of documentation and review that many firms underestimate.