(And Why Your 2022 Policy Might Now Be Wrong)
Most firms believe they’re being conservative.
“Use model fees.”
“Ban promoters with disciplinary history.”
“Lock it down so we don’t get cute with marketing.”
Those positions felt safe when the Marketing Rule first rolled out.
As of January 15, 2026, they may now be incomplete – or worse, misaligned – with the SEC staff’s updated FAQs under Rule 206(4)-1. The Commission didn’t loosen the rule. It shifted the burden of judgment back onto you. And that changes how your marketing compliance function has to operate.
Two Pressure Points the SEC Just Reopened
The January 2026 FAQ update focuses on two areas that most compliance teams hard-coded into policy in 2021–2022:
- Use of model fees in net performance advertising
- Compensation of individuals with certain “disqualifying events”
Both updates introduce nuance. And nuance increases documentation risk.
1. Model Fees: Flexibility That Raises the Stakes
For years, many firms treated footnote 590 as bright-line guidance:
If future fees will be higher than historical fees, use a model fee in net performance.
That approach felt conservative.
The new FAQ clarifies that the rule does not always require a model fee where actual fees are lower than anticipated future fees. Instead, advisers may use actual fees, if they clearly illustrate and disclose the impact of higher anticipated fees for the intended audience.
Read that carefully.
The SEC didn’t say, “Use whatever you want.”
They said: if you depart from a model fee approach, you must:
- Clearly illustrate the impact of higher anticipated fees
- Provide appropriate disclosures
- Ensure the presentation is not misleading under the general prohibitions
That is a facts-and-circumstances analysis.
Which means:
- You must document your reasoning.
- You must document how fee impact was shown.
- You must be able to show what the intended audience would reasonably understand.
If you mishandle this, you don’t just have a formatting issue. You have a potential misleading net performance problem under the general prohibitions. And those are not technical violations. They are enforcement-grade violations.
2. Testimonials & Endorsements: “Disqualifying” Is No Longer Absolute
The baseline rule remains: certain disciplinary events can disqualify a person from being compensated for testimonials or endorsements.
Many firms operationalized this as:
If there’s a disqualifying event → no compensation. Full stop.
The new FAQ introduces nuance.
In certain circumstances, staff indicates that compensation may still be permitted including scenarios involving SRO final orders provided specific conditions are met. That can include enhanced disclosures and time-based requirements (e.g., additional disclosures for a defined period such as ten years).
This is not a green light. It is conditional flexibility.
And conditional flexibility creates three immediate operational challenges:
- You must know which promoters have relevant histories.
- You must track which additional disclosures apply.
- You must track how long those enhanced disclosures are required.
This is no longer a yes/no eligibility question. It’s a controlled exception process. If you’re managing promoters in a spreadsheet, this is where things break.
What This Signals About SEC Priorities
Step back.
In the past year, we’ve seen:
- A Marketing Rule Risk Alert.
- Multiple FAQ updates.
- Continued exam focus on performance advertising and endorsements.
The pattern is clear. The SEC is not simplifying marketing compliance. They are refining it and testing whether firms actually understand the rule rather than applying mechanical shortcuts.
Flexibility is being offered.
But only to firms that can demonstrate:
- Thoughtful analysis.
- Clear disclosures.
- Structured supervision.
- Clean recordkeeping.
If your policies were written in 2021 and haven’t evolved, you are probably over-relying on bright-line assumptions that no longer reflect staff guidance.
What Compliance Teams Should Do Now
For firms with real marketing activity and 10+ employees, this is not theoretical.
Here’s the practical 2026 reset:
Revisit Performance Advertising Policies
Look for hard-coded “model fee must be used” language.
Update to a facts-and-circumstances standard tied to documented fee-impact illustrations and disclosures.Inventory Existing Performance Materials
Identify presentations where future fees will exceed historic fees.
Confirm that the impact of higher anticipated fees is clearly illustrated for the intended audience.Rebuild Promoter Vetting Workflows
Move beyond binary eligibility checks.
Document disciplinary histories, SRO orders, required enhanced disclosures, and time-bound conditions.Update Training
Marketing teams must understand that flexibility increases scrutiny.
“More options” does not mean “less risk.”Test Your Records Under Exam Conditions
Pick one ad using net performance.
Pick one compensated promoter.
Can you pull, within minutes:
- Fee calculations?
- Disclosure language used?
- Audience assumptions?
- Eligibility analysis?
- Supervisory approvals?
If not, the risk isn’t the rule.
It’s your documentation architecture.
Where Infrastructure Becomes the Differentiator
The new FAQs don’t reward aggressive marketers. They reward firms that can prove control.
Operationally, that means:
- Ads flagged when actual and anticipated fees diverge.
- Standardized disclosure blocks stored with each advertisement.
- Linked evidence files showing how fee impact was illustrated.
- A centralized promoter registry tracking:
- Status
- Disciplinary history
- Applicable enhanced disclosures
- Duration requirements
- Automated controls preventing approval of ads unless required disclosures are attached.
- Time-based reminders when enhanced disclosure windows expire.
This is not about adding more memos. It’s about embedding judgment into workflow.
That’s exactly where platforms like Smartria become infrastructure rather than convenience:
- Marketing review workflows that reflect the new FAQ logic.
- Evidence and workpapers stored alongside the ad itself.
- Promoter eligibility tracked centrally, not in email threads.
- Audit-ready reporting when the exam team asks for it.
Because the question is no longer:
“Did you follow the rule?”
It’s:
“Can you prove you understood it?”
The Real Takeaway
The January 2026 FAQs do not loosen Rule 206(4)-1. They remove shortcuts.
If you previously relied on absolute bans or automatic model-fee defaults, you may now be either:
- Too rigid in ways that don’t reflect current guidance, or
- Too flexible without proper documentation controls.
In 2026, the SEC is rewarding firms that treat marketing compliance as an operational discipline not a policy paragraph.
If you want to stress-test your current workflows against the updated FAQs, download our 2026 Marketing Rule FAQ Compliance Checklist or schedule a focused walkthrough of how Smartria embeds these requirements directly into marketing review and documentation workflows.
Because flexibility without infrastructure isn’t sophistication.
It’s exposure.
