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Rule 206(4)-1(d)(4)

Performance: related performance must include all related portfolios

performancerelated-performancecherry-picking
Excerpted verbatim from the rule

An advertisement may not include any related performance, unless it includes all related portfolios; provided that related performance may exclude any related portfolios if (i) the advertised performance results are not materially higher than if all related portfolios had been included; and (ii) the exclusion does not alter the presentation of any prescribed time periods.

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

What violations look like

Pitch deck

"Our flagship growth strategy returned 22% last year." (Adviser shows the best-performing of seven SMAs run under the same mandate; the others returned 9–14%.)

Why it's flagged: All accounts following substantially the same investment objectives, policies, and strategies count as related portfolios. Showing only the top performer is the textbook (d)(4) violation.

Compliant rewrite

Show the composite performance across all related accounts (GIPS-style), or identify a specific account by name with its own returns — not labeled as "the strategy’s performance."

Brochure

Showing the firm’s mutual-fund track record without including the parallel SMA composite.

Why it's flagged: If the SMA composite has lower returns than the mutual fund — different fee structure, slightly different holdings — omitting it misleads readers about the strategy’s realized performance.

Compliant rewrite

Show both side by side. Identify the differences (fees, vehicle structure, holdings) explicitly so the reader can interpret the gap.

Run Rule 206(4)-1(d)(4) on your own copy.

Paste any draft — LinkedIn post, newsletter, website copy — and Safe to Publish flags the Rule 206(4)-1(d)(4) issues with citations to the rule and a suggested rewrite.

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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.