SEC Marketing Rule - Exaggerated Claims and Superlative Language

To comply with the SEC Marketing Rule’s prohibition on exaggerated claims and superlative language, you must prevent any advertisement from containing untrue statements of material fact or being otherwise false or misleading, including through implication or framing. Operationally, that means pre-review, claim-by-claim substantiation, controlled disclosures, and immutable records for every disseminated marketing item. ¹

Key takeaways:

• Treat superlatives (“best,” “unmatched,” “#1”) as factual claims that require substantiation or removal. ¹
• Build a claim library with approved phrasing, required qualifiers, and linked evidence for each reusable claim. ¹
• Examiners are explicitly focused on Marketing Rule compliance, so inconsistent cross-channel messaging and weak recordkeeping create avoidable exam risk. ²

“Exaggerated claims” problems rarely come from a single blatant lie. They usually come from marketing language that implies a fact you cannot prove: “top-tier,” “industry-leading,” “proven downside protection,” “consistent outperformance,” or “institutional-grade risk management.” Under the SEC Marketing Rule, an investment adviser crosses the line when an advertisement includes an untrue statement of material fact or is otherwise false or misleading. ¹

For a CCO or GRC lead, the fastest path to control is to treat every claim and superlative as a regulated assertion that must be (1) defined, (2) substantiated, (3) presented fairly, and (4) archived with the final disseminated version and its approvals. This is less about “wordsmithing” and more about building a repeatable workflow that marketing can live with: intake, classification, substantiation linkage, disclosure mapping, approval, distribution controls, and monitoring.

The SEC’s Division of Examinations has stated it will focus on compliance with recently adopted SEC rules including the Marketing Rule. ² That makes exaggerated claims and superlatives a practical exam issue, not a theoretical drafting issue.

Requirement: SEC marketing rule - exaggerated claims and superlative language requirement (plain-English)

You must ensure advertisements do not include untrue statements of material fact and are not otherwise false or misleading. ¹ Superlative language can be misleading if a reasonable investor would interpret it as a factual statement (for example, “best performing,” “safest strategy,” “#1 advisor in alternatives”) and you cannot support it with competent, current evidence.

What “false or misleading” looks like in operations:

• Implied guarantees: “Downside protection” or “risk-free income” without clearly defined limits and supporting analysis can mislead, even if technically caveated elsewhere.
• Cherry-picked framing: A claim can mislead by omission (for example, highlighting a benefit without the conditions, tradeoffs, or risks that make it true).
• Vague superiority: “Industry-leading,” “premier,” “top-tier,” “unmatched,” “best-in-class” usually reads as a measurable comparative claim. If you cannot define the comparison set and metric, remove or reframe.

Regulatory risk is amplified because the SEC has explicitly flagged Marketing Rule compliance as an exam focus area. ²

Who it applies to (entity + operational context)

Entity scope: Registered Investment Advisers and their supervised persons creating or disseminating “advertisements” (marketing communications) under the SEC Marketing Rule. ¹

Operational scope: Any team or third party that drafts, edits, posts, or distributes marketing communications, including:

• Marketing/communications, investor relations, product specialists
• Portfolio managers and executives who publish commentary
• Recruiters posting “firm awards” or “top advisor” language
• Third parties such as PR firms, web developers, social media agencies, placement agents, and solicitors (you still own the compliance outcome if it’s your advertisement or presented on your behalf)

Channels to include in scope:

• Website pages, pitch decks, fact sheets, RFPs/RFIs, emails, newsletters
• Social posts, videos/webinars, podcasts, press releases/quoted statements
• Award announcements and “as featured in” content
• Slide templates and talking points used in live presentations (treat the script and the deck as the governed artifact)

Regulatory text

Rule requirement (excerpt): “It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) of the Act for any investment adviser to disseminate any advertisement that includes any untrue statement of a material fact, or that is otherwise false or misleading.” ¹

What the operator must do:
Build controls so that no advertisement goes out unless (a) each express or implied claim is true, (b) you can prove it with retained documentation, and (c) the overall presentation is not misleading due to omissions, exaggeration, or unsupported superiority. Your workflow should make it hard to publish “best/leading/guaranteed” language without compliance seeing it and demanding substantiation or edits. ¹

What you actually need to do (step-by-step)

1) Define what counts as an “advertisement” in your firm

Create a short scoping memo and a channel inventory. Include owners, distribution method, and whether the content is templated or one-off. Map where superlatives tend to appear (bios, homepage copy, performance highlights, award pages).

Output: Advertisement inventory + channel owners + in-scope third parties.

2) Implement a “claim classification” standard

Require submitters to tag each material statement in the draft using a simple taxonomy:

• Factual claim: measurable and verifiable (“AUM is $X,” “launched in YYYY”).
• Comparative/superlative claim: compares to peers or implies ranking (“best,” “leading,” “top,” “premier”).
• Outcome claim: implies investor results (“lower risk,” “stronger returns,” “downside protection”).
• Process claim: about controls/capabilities (“institutional-grade risk management,” “robust due diligence”).

Then set rules:

• Superlatives default to remove or rewrite unless the submitter provides defined metrics, peer set, and evidence.
• Outcome claims require defined conditions and balanced risk language so the net impression is not misleading. ¹

Output: Claim tagging checklist embedded in the intake form.

3) Require claim-by-claim substantiation before approval

For each claim, require:

• Claim statement (exact words as they will appear)
• Meaning (what a reasonable investor would think it means)
• Evidence link (source doc, calculation, methodology)
• Time period / “as of” date where relevant
• Owner (business accountable for accuracy)
• Required qualifiers/disclosures (if needed to avoid misleading impression)

This is where many programs fail: they keep “general support” (a slide deck, a memo) but cannot tie evidence to each specific phrase.

Output: Substantiation matrix attached to the approval ticket.

4) Standardize “safe rewrites” for superlatives

Give marketing compliant alternatives that still read well:

• Replace “best” with descriptive, verifiable facts: “focused on [strategy],” “specialized in [market],” “team has [experience],” “process includes [steps].”
• If you must use comparative language, define the comparator and basis: “among the largest in [defined category] based on [defined metric] as of [date], per [internal calculation/evidence].” Only publish if you can prove it. ¹

Output: Approved language library (do/don’t list) embedded in templates.

5) Put pre-dissemination compliance approval in the distribution path

Make pre-approval mandatory for:

• New campaigns, new claims, new channels, and any superlative/comparative language
• Website edits and SEO landing pages (high risk because they persist)
• Social copy drafted by third parties

Operationalize with:

• A single intake queue (GRC/workflow tool or tracked mailbox)
• Version control: only one “final” artifact can be posted
• Publish permissions restricted to trained users

This matches common best-practice control design: pre-dissemination approval with explicit substantiation references. ¹

6) Lock recordkeeping: immutable archive + disclosure versioning

Retain, in an immutable archive:

• Final disseminated version (exact PDF, screenshot, recording, or HTML export)
• Approval record (who approved, when, what changed)
• Substantiation matrix and source evidence
• The disclosures/risk language version that shipped with that item

This aligns to the operational need to prove what was actually disseminated and why it was supportable. ¹

7) Monitor cross-channel consistency and remediate

Run periodic sampling across:

• Website vs pitch deck vs factsheet vs social
• Old PDF downloads vs updated webpages
• Localized/regional variants

Log issues, root cause, fix, and prevention step. This directly targets a frequent breakdown: marketing updates one channel but not others, leaving contradictory claims in the wild. ¹

Required evidence and artifacts to retain (exam-ready)

Use this table as your “produce on request” list:

Artifact	What exam staff expects to see	Owner
Advertising inventory	List of channels and content types treated as ads	Compliance + Marketing Ops
Approval workflow records	Pre-dissemination approvals, timestamps, reviewers, redlines	Compliance
Claim substantiation matrix	Claim text → evidence → qualifiers → owner	Compliance + Business
Supporting evidence package	Source docs, calculations, methodology notes	Business owner
Final disseminated archive	Immutable copy of what the public/investors saw	Marketing Ops / IT
Monitoring & remediation log	Sampling results, fixes, recurrence prevention	Compliance

The SEC has stated Marketing Rule compliance is an exam focus, so “we don’t keep that” is a weak position. ²

Common exam/audit questions and hangups

Expect questions like:

• “Show me support for this ‘industry-leading’ statement on your homepage.” ¹
• “Who approved this social post, and where is the final version you disseminated?” ¹
• “How do you ensure updated disclosures propagate across all decks and fact sheets?” ¹
• “How do you supervise third parties creating or posting content on your behalf?” ¹
• “What testing do you do to catch stale marketing PDFs still being emailed?” ¹

Hangups usually come down to two things: inability to prove what was disseminated, and inability to prove the basis for a claim.

Frequent implementation mistakes (and how to avoid them)

1. Treating superlatives as “puffery.”
   Fix: Require a substantiation ticket for any comparative/superlative word, or remove/rewrite.

2. Burying qualifiers in a separate disclosure document.
   Fix: Put critical qualifiers adjacent to the claim, and ensure the net impression stays fair and not misleading. ¹

3. Approving drafts but not controlling publication.
   Fix: Restrict posting rights and archive the final posted version (screenshots/HTML export).

4. Letting third parties publish without your workflow.
   Fix: Contractually require pre-approval, provide approved language, and audit what they posted.

5. No cross-channel control.
   Fix: Maintain a single claim library and run sampling to detect drift, then document remediation.

Enforcement context and risk implications (practical)

No public enforcement cases were provided in the source catalog for this requirement, so this page does not list case examples. What you can rely on operationally: the SEC’s Division of Examinations has publicly stated it will focus on Marketing Rule compliance. ² That elevates the likelihood that exaggerated/superlative claims and the supporting substantiation/records will be tested in exams.

Practical execution plan (30/60/90-day)

You asked for a plan you can run quickly; use phases so you can start immediately without inventing calendar promises.

First 30 days (stabilize risk)

• Freeze new superlative/comparative language unless compliance signs off.
• Stand up a single intake + approval path for all new marketing items.
• Start an immutable archive process for all newly disseminated materials.
• Identify the top risk surfaces: homepage copy, flagship pitch deck, standard factsheets, social templates.

Next 60 days (build repeatability)

• Publish the claim classification checklist and substantiation matrix template.
• Build the initial claim library: reusable claims, approved phrasing, required qualifiers, and linked evidence.
• Add third-party marketing partners to the workflow and update contracts/SOWs to require pre-approval and archiving support.
• Begin cross-channel sampling and open a remediation log.

Next 90 days (prove it works)

• Run a mock exam: pick a sample of ads and test whether you can produce final versions, approvals, and evidence quickly.
• Close gaps (missing evidence, missing final copies, unclear owners).
• Train marketing and client-facing staff using your firm’s real “before/after” examples.
• Add ongoing QC testing (sampling + trend reporting) to your compliance calendar, tied to the SEC exam focus on the Marketing Rule. ²

Where Daydream fits (earned mention)

If your bottleneck is managing claim-by-claim substantiation and keeping immutable, exam-ready archives across channels, Daydream can serve as the system of record for marketing approvals, evidence linkage, and sampling-based monitoring. It reduces “tribal knowledge” approvals and gives you a clean production package when exam staff asks for support. ¹

Frequently Asked Questions

Do we have to ban all superlatives like “best” or “leading”?

You don’t have to ban them categorically, but you should treat them as factual comparative claims that need defined criteria and retained substantiation. If you can’t define and prove the comparison, rewrite to objective, verifiable statements. ¹

Are website SEO pages and blogs “advertisements” under the Marketing Rule?

If the content promotes advisory services and is disseminated, treat it as an advertisement for workflow and recordkeeping purposes. Operationally, SEO pages are high risk because they persist and can drift out of date. ¹

Can we rely on a general disclaimer like “past performance is not indicative…” to fix an exaggerated claim?

Disclaimers do not cure a claim that is untrue or that creates a misleading net impression. Use disclaimers to clarify conditions and risks, but fix the underlying claim text first. ¹

What evidence is “adequate” to substantiate a superlative claim?

Adequate evidence is documentation that directly supports what the words mean to a reasonable investor, including the metric, peer set, and as-of date where relevant. Keep the evidence linked to the exact claim language in your substantiation matrix. ¹

How do we control exaggerated claims in employee social media posts?

Set a policy that business-related promotional posts are subject to pre-approval or must use pre-approved templates, and restrict employees from improvising superlatives. Monitor a sample of posts and document remediation when issues appear. ¹

Why prioritize this now?

The SEC’s Division of Examinations has stated it will focus on compliance with recently adopted SEC rules including the Marketing Rule. That makes marketing claim support and recordkeeping a practical exam-readiness priority. ²

Footnotes

1. 17 CFR 275.206(4)-1

2. 2025-exam-priorities