← All rule pagesRule 206(4)-1(b)(1)(ii)
Testimonial/endorsement: additional disclosures (material terms of comp, conflicts) at time of dissemination
testimonialendorsementcompensation-termsdisclosure
Excerpted verbatim from the rule
The adviser must disclose, or reasonably believe the promoter discloses, the material terms of any compensation arrangement, including a description of the compensation provided or to be provided, directly or indirectly, to the person giving the testimonial or endorsement, and a description of any material conflicts of interest on the part of the person giving the testimonial or endorsement resulting from the investment adviser’s relationship with such person and/or any compensation arrangement.
What violations look like
LinkedIn
"Working with Harbor Ridge has been transformational for our family." — Mark T., current client. *See important disclosures below.*
Why it's flagged: Many firms know to disclose comp generally but bury the exact terms in a footer. (b)(1)(ii) requires the *material terms* of any compensation arrangement — fee discount, free service, equity, anything — be disclosed inline at the moment the testimonial is published.
Compliant rewrite
Disclose the comp terms in the post itself: "Disclosure: Mark received a 10% reduction in management fees for sharing this testimonial. No other material conflicts of interest exist."
Pitch deck
A client appears on the firm’s podcast praising the service.
Why it's flagged: If the firm provides any compensation — free management services, gift cards, paid podcast appearance fee — the comp terms must be disclosed at the moment of dissemination, meaning the host must say it on-air, not in show notes.
Compliant rewrite
Open the segment with the disclosure: "Just so listeners know, Anna is a current client and we waived her management fee for this calendar year in exchange for these on-air conversations."
Run Rule 206(4)-1(b)(1)(ii) on your own copy.
Paste any draft — LinkedIn post, newsletter, website copy — and Safe to Publish flags the Rule 206(4)-1(b)(1)(ii) issues with citations to the rule and a suggested rewrite.
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