Why "past performance" disclaimers don’t satisfy Rule 206(4)-1

“Past performance is not indicative of future results” is the most repeated sentence in adviser marketing. It is also one of the most misunderstood. It does not, on its own, make a performance claim compliant. It is neither what Rule 206(4)-1 asks for nor what an examiner is checking when they look at your performance presentations.

This piece is a working through of the disconnect: what the disclaimer actually does, what the rule actually requires when you show performance, and the five common patterns where firms believe the disclaimer protects them and it does not.

Where the disclaimer comes from

The phrase predates the Marketing Rule by decades. It comes out of mutual-fund advertising practice and SEC-registered fund prospectuses, where it sits among other risk warnings. It became universal in adviser marketing because it's cheap to add, defensible to include, and habit had set in long before the November 2022 compliance date for the new Marketing Rule.

The new rule changed the legal landscape around performance presentations substantially. The old habit didn't catch up.

What the disclaimer actually does

The disclaimer signals that historical returns aren't a guarantee of future ones. It's a contextual warning, not a structural compliance element. It partially addresses the general anti-fraud requirement that an investor not be misled into believing past results predict future outcomes — a piece of the (a)(1) and (a)(7) framework on misleading statements (our breakdown of (a)(1), (a)(7)).

That's a real function. It's also a small one relative to what the (d) sub-paragraphs of the Marketing Rule actually require around performance presentation.

What the rule actually requires when you show performance

None of these are satisfied by the past-performance disclaimer:

• Gross and net at equal prominence— if you show gross returns, you must show net returns (after all client-borne fees) with the same visual weight. See Rule 206(4)-1(d)(1).
• Standardized 1-, 5-, and 10-year time periods(or since-inception when the strategy is younger) for non-private-fund performance. The disclaimer doesn't cure the omission of standardized periods. See Rule 206(4)-1(d)(2).
• Hypothetical-performance audience eligibility— if what you're showing is hypothetical (model, backtested, projected), the disclaimer doesn't replace the requirement to verify your audience can evaluate it. See Rule 206(4)-1(d)(6).
• Related-portfolio inclusion— if you cite the performance of one account or composite, you must include all related portfolios (you can't cherry-pick the winner). See Rule 206(4)-1(d)(4).
• Extracted performance + total portfolio— if you show a sub-set of holdings, you must offer the full-portfolio performance with the same prominence. See Rule 206(4)-1(d)(5).

These are structural requirements about what you must present and how. The past-performance disclaimer is a piece of context that sits beside compliant presentations — it doesn't make non-compliant ones compliant.

Five patterns where the disclaimer doesn't save you

1. Gross-only returns under a footer disclaimer

The 22% is gross. (d)(1) requires net at equal prominence regardless of how many disclaimers you include elsewhere. The fix: present 22% gross / [net figure] net for the period, in the same visual treatment.

2. A single calendar year shown in isolation

(d)(2) requires the standardized 1-, 5-, and 10-year (or since-inception) periods. Showing one cherry-picked period with a disclaimer doesn't satisfy that requirement — the structural omission stands.

3. A backtest on a public website

(d)(6) prohibits hypothetical performance on surfaces where you cannot verify the audience's eligibility to evaluate it. A public website cannot verify audience eligibility by definition. The disclaimer doesn't change the audience — it just sits next to a content type that can't live there at all.

4. Cherry-picked composite under a disclaimer

(d)(4) requires you to show the performance of all related portfolios, not a curated subset. The disclaimer doesn't remediate the selection. The fix: show the composite of all related portfolios, or identify a single account by name with its actual returns rather than labeling it as “the strategy’s performance.”

5. “Top holdings” performance without the full portfolio

(d)(5) requires that when you show extracted performance, you provide or offer the total portfolio's performance with equal prominence. The disclaimer does not satisfy this; the structural omission is the issue.

Where the disclaimer still belongs

None of the above means delete the disclaimer. It still has a useful role:

• Alongside compliant performance presentations as a contextual warning. Belt-and-suspenders.
• In general legal-disclaimer footerson a marketing page, where it sits with other catch-all language. The footer doesn't cure specific Marketing Rule deficiencies, but it's an entirely defensible place for it to live.
• As part of an inline disclosure blockwhen you're presenting performance — it can sit alongside the gross/net breakdown, the period coverage, and the composite construction notes.

What changes is the framing: the disclaimer is one element among many in a compliant presentation, not a substitute for the structural requirements (d)(1) through (d)(7) impose.

The 30-minute audit

1. Find every public surface where you mention performance. Website fact sheets, blog posts that discuss returns, pitch decks downloadable from your site, LinkedIn posts referencing strategy returns, the “our track record” section of your About page.
2. For each instance, check (d)(1)\u2013(d)(7) compliance, not the disclaimer.
   • Gross and net shown at equal prominence?
   • Standardized 1, 5, 10-year (or since-inception) periods?
   • No hypothetical / model / backtested content on public surfaces?
   • All related portfolios reflected, not just winners?
   • Total-portfolio performance shown with any extracted (top-N) performance?
3. Any “no” → fix the structural element.Adding another disclaimer doesn't fix it. Editing the presentation to satisfy the (d) sub-paragraph does.
4. Then keep the disclaimer where it makes sense.It's still useful contextual language; just stop treating it as a defense against specific (d) deficiencies.

One frame change to make

The mental model that gets advisers in trouble is “disclaimer = safe.” The mental model that aligns with the rule is: “the presentation has to be structurally compliant; the disclaimer is contextual color around a presentation that's already compliant.” Once that frame shift lands, the audit above becomes obvious work, and the temptation to add more disclaimer language in lieu of restructuring presentations goes away.

Educational summary — not legal advice. Always read the rule text in full and consult your own compliance counsel before relying on any specific interpretation. Safe to Publish is not a law firm. See Terms.