Marketing Rule

The marketing rule prohibits an adviser from including any material statement of fact in an advertisement, that the adviser does not have a reasonable basis for believing it will be able to substantiate upon request from SEC. Accordingly, for statements like these, I recommend saving support (such as the sources, any additional documentation) in an “evidence locker” type folder so you can substantiate the statements down the line if required to.

Along the same lines, I also recommend using qualifying language for statements that may be hard to substantiate. Accordingly, you will see that I have redlined the attached document to include language like “we believe” or “in our opinion” in such statements.

I see that the document quotes a favorable statement for Fairbridge from the broker, which constitutes an endorsement under the Marketing Rule. I’ve included a template disclaimer for the same, which can be tweaked as needed. For reference, when using such endorsements, advisers are required to include a disclaimer disclosing that the statement was:

– Given by a person other than a current client or investor;
– Compensation was provided for the use of the endorsement, if applicable; and
– A brief statement and description of any material conflicts of interest on the part of the person giving the endorsement resulting from the adviser’s relationship with such person.