Rule 206(4)-1(a)(4)

General prohibition: discussion of benefits without fair/balanced discussion of risks/limitations

benefitsrisksfair-and-balancedgeneral-prohibition

Verbatim from the rule

An advertisement may not discuss any potential benefits to clients or investors connected with or resulting from the investment adviser’s services or methods of operation without providing fair and balanced treatment of any associated material risks or limitations.

Source: 17 CFR § 275.206(4)-1 on eCFR.

What violations look like

Our flagship strategy is guaranteed to outperform any index fund.

Why it's flagged: "Guaranteed" paired with an outperformance claim discusses benefits without the fair-and-balanced treatment of risks the rule requires. Staff FAQ calls this out by name.

Compliant rewrite

Our flagship strategy is designed to deliver risk-adjusted returns. All investing involves risk of loss.

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This page is for educational purposes and is not legal advice. Safe to Publish is not a law firm. Compliance decisions remain the responsibility of the registered investment adviser. See Terms.