Rule 206(4)-1(e)(5)

Definition: Endorsement

definitionendorsement

Excerpted verbatim from the rule

Endorsement means any statement by a person other than a current client or investor in a private fund advised by the investment adviser that: (i) indicates approval, support, or recommendation of the investment adviser or its supervised persons or describes that person’s experience with the investment adviser or its supervised persons; (ii) directly or indirectly solicits any current or prospective client or investor to be a client of, or an investor in a private fund advised by, the investment adviser; or (iii) refers any current or prospective client or investor to be a client of, or an investor in a private fund advised by, the investment adviser.

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

Edge cases — what counts as this

Brochure

A CPA in their firm’s "preferred providers" list mentions the RIA as a recommended wealth manager for their tax clients.

Why this counts: A non-client statement that promotes or supports the firm. Counts as an endorsement under (e)(5) — and the CPA is a "promoter" for Marketing Rule purposes.

How to handle it

Document the relationship: written agreement (b)(3), comp disclosure (even if comp is zero, that disclosure is required), conflicts disclosure. Both sides retain copies for books-and-records.

Pitch deck

An industry consultant accepts a "Best Boutique RIA" award and praises the firm in the acceptance speech.

Why this counts: Statements by non-clients praising the firm — particularly when arranged or anticipated — can fall under endorsement. The firm doesn’t have to *initiate* the endorsement for it to count once it uses the footage.

How to handle it

If the firm uses footage of the speech in marketing, treat as an endorsement: disclose the consultant’s relationship to the firm, any compensation flows, and any material conflicts.

Run Rule 206(4)-1(e)(5) on your own copy.

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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.