Related Performance Presentation

To meet the SEC’s related performance presentation requirement, you must not show performance for a “related portfolio” in any advertisement unless you also include performance for all other related portfolios with substantially similar investment policies, objectives, and strategies. Build and govern a complete related-portfolio set, then automate inclusion checks so marketing materials cannot cherry-pick winners. (17 CFR § 275.206(4)-1)

Key takeaways:

• If you advertise any related portfolio performance, you must include all substantially similar related portfolios, not a handpicked subset. (17 CFR § 275.206(4)-1)
• Operationalize the rule by defining “related portfolios,” mapping accounts to strategies, and enforcing pre-approval controls in your ad review workflow. (17 CFR § 275.206(4)-1)
• Your audit trail should prove completeness: inventory, inclusion logic, calculation support, approvals, and a record of every ad that used related performance. (17 CFR § 275.206(4)-1)

“Related performance” is where many marketing rule controls fail in practice, because the risk shows up in normal business behavior: a team wants to highlight a strong account, a flagship mandate, or a legacy sleeve that looks good in a pitch deck. The SEC’s requirement is simple: if you include performance for a related portfolio, you must include performance for all related portfolios that share substantially similar investment policies, objectives, and strategies. (17 CFR § 275.206(4)-1)

For a CCO or GRC lead, the work is less about drafting policy language and more about building a repeatable mechanism that prevents incomplete population selection. That mechanism has three parts: (1) a governed definition of what counts as “related” at your firm; (2) a complete, documented inventory of portfolios mapped to those strategy definitions; and (3) hard controls in the advertisement review process that block publication unless the required set is included.

This page gives you requirement-level implementation guidance: applicability, step-by-step controls, artifacts to retain, exam questions you should expect, and a practical execution plan to get to a defensible steady state. (17 CFR § 275.206(4)-1)

Regulatory text

Rule requirement (verbatim excerpt): “An advertisement may not include the performance results of a related portfolio unless it includes the performance of all related portfolios with substantially similar investment policies, objectives, and strategies.” (17 CFR § 275.206(4)-1)

Operator interpretation: If an advertisement shows performance for any portfolio you position as related (for example, accounts managed in the same strategy), the ad must also show performance for the full population of portfolios that are “related” because they are substantially similar in investment policies, objectives, and strategies. The operational obligation is completeness. You must be able to demonstrate that you did not exclude underperforming portfolios from the related set. (17 CFR § 275.206(4)-1)

Plain-English interpretation (what the SEC is trying to prevent)

The rule is an anti-cherry-picking control. If you present related performance, your audience should see the full set of substantially similar portfolios, not only the best-looking account(s). The compliance standard you’re building toward: a reviewer can trace from the advertised related performance back to (a) your definition of the related set and (b) the population of portfolios included, and conclude the set is complete and consistently constructed. (17 CFR § 275.206(4)-1)

Who it applies to

Entity types: Investment advisers and fund managers that prepare or distribute “advertisements” containing performance results for related portfolios. (17 CFR § 275.206(4)-1)

Operational contexts where this commonly triggers:

• Pitchbooks and RFP responses that present “strategy performance” based on a subset of accounts
• One-pagers highlighting performance for a flagship mandate presented as representative of a broader strategy
• Consultant databases and due diligence questionnaires where you provide related performance snapshots
• Website materials, fact sheets, and presentations shared with prospective clients that include related portfolio performance (17 CFR § 275.206(4)-1)

If your firm never presents related performance, you still need a policy position and a review check that confirms whether a given piece includes related performance and therefore triggers this requirement. (17 CFR § 275.206(4)-1)

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

1) Define “related portfolio” at your firm in operational terms

Create a written standard that translates the rule phrase “substantially similar investment policies, objectives, and strategies” into your firm’s taxonomy. Keep it concrete:

• What attributes determine similarity (strategy name, benchmark, asset class, guidelines, constraints, risk limits)?
• Who owns the classification (investments, performance team, compliance)?
• How exceptions are handled (legacy accounts, restricted accounts, client-imposed constraints) (17 CFR § 275.206(4)-1)

Control outcome: A reviewer can decide, consistently, whether two portfolios are “related” for purposes of marketing. (17 CFR § 275.206(4)-1)

2) Build the complete inventory of potentially related portfolios

Maintain a living inventory of all portfolios/accounts/products that could be marketed as part of a strategy. At minimum:

• Portfolio identifier
• Strategy classification
• Start/end dates under management
• Material constraints (if you treat constraints as a basis to exclude from “substantially similar,” document the rationale)
• Data source of record (portfolio accounting system, order management system, performance system) (17 CFR § 275.206(4)-1)

Control outcome: You can enumerate “all related portfolios” for any strategy claim on demand. (17 CFR § 275.206(4)-1)

3) Establish inclusion rules and a completeness check for every ad

For each advertisement that includes related performance:

• Identify the strategy/strategies implicated
• Pull the full related-portfolio list from the inventory
• Confirm the ad includes performance for the full list (or, if you present in an aggregated format, confirm the aggregation includes the full list)
• Document the check in the ad approval record (17 CFR § 275.206(4)-1)

Practical tip: Treat this like a gating test. If the ad does not pass completeness, it does not ship.

4) Standardize calculation inputs and version control

Even though this specific requirement is about completeness, exams often expand into “show me how you computed this.” Prepare to retain:

• Calculation methodology summary (periods shown, data source, return calculation approach)
• Performance system reports supporting the numbers included in the ad
• Version history of the ad showing what changed and why (17 CFR § 275.206(4)-1)

5) Implement workflow controls (so the process is repeatable)

Minimum viable controls:

• A required field in the marketing intake form: “Does this ad include related performance?” with definitions and examples
• A required attachment: “Related Portfolio Completeness Worksheet” (or system-generated report)
• Compliance pre-approval that explicitly signs off on completeness (17 CFR § 275.206(4)-1)

How Daydream fits naturally: If you’re managing many strategies and high marketing volume, the failure mode is manual list-pulling and inconsistent judgments. Daydream can centralize the portfolio-to-strategy mapping, require the completeness evidence at submission, and prevent approvals when the related set is incomplete.

6) Train the first line (marketing, IR, sales, product)

Training should be short and scenario-based:

• “If you show one account that represents a strategy, you likely triggered related performance.”
• “If you want to show a subset, stop and reframe the claim or include the full related set.” (17 CFR § 275.206(4)-1)

7) Monitor and test

Add periodic testing:

• Sample recently approved ads that contain performance
• Re-perform the completeness check from the source inventory
• Track defects: missing portfolios, misclassified strategies, stale inventory entries (17 CFR § 275.206(4)-1)

Required evidence and artifacts to retain

Build an “advertising substantiation file” for every item that includes related performance:

• Related portfolio definition standard (policy/procedure)
• Strategy mapping / portfolio inventory extract effective as of the ad approval date
• Completeness check record (worksheet or system control output) tied to the specific ad version
• Performance support package (system reports, calculations, source data references)
• Approval evidence (compliance sign-off, timestamps, approver identity)
• Distribution record (where and when the ad was published or sent) (17 CFR § 275.206(4)-1)

Common exam/audit questions and hangups

Expect questions framed as “prove it”:

1. Show me all advertisements that included related performance during the period. How do you identify them? (17 CFR § 275.206(4)-1)
2. How do you define “related portfolios” and “substantially similar”? Is the definition consistently applied across teams? (17 CFR § 275.206(4)-1)
3. For this specific ad, how did you determine the full population of related portfolios? Produce the inventory as of that date. (17 CFR § 275.206(4)-1)
4. Did you exclude any portfolios? If yes, show documented rationale aligned to your standard. (17 CFR § 275.206(4)-1)
5. What controls prevent marketing from swapping in a “better” account at the last minute? Show version control and re-approval triggers. (17 CFR § 275.206(4)-1)

Frequent implementation mistakes (and how to avoid them)

Mistake	Why it fails	Fix
Treating “related” as “whatever sales calls it”	Inconsistent, not auditable	Lock a formal strategy mapping and make it the source of truth. (17 CFR § 275.206(4)-1)
“Representative account” decks with no full related set	Classic cherry-picking risk	If you show one related portfolio, include all related portfolios or remove the related-performance claim. (17 CFR § 275.206(4)-1)
Stale inventory (closed accounts, mandate changes not captured)	Completeness check becomes unreliable	Tie updates to account onboarding/offboarding and mandate change workflows. (17 CFR § 275.206(4)-1)
Manual spreadsheet lists with no control owner	Hard to reproduce, easy to edit	Generate the related list from a controlled system/report; record effective date and approver. (17 CFR § 275.206(4)-1)
No re-approval when performance tables change	Final ad differs from reviewed ad	Require re-approval for any change to included portfolios, periods, or performance values. (17 CFR § 275.206(4)-1)

Enforcement context and risk implications

No public enforcement cases were provided in the supplied source catalog, so this page does not summarize specific actions. Your risk framing should stay anchored to the rule text: presenting only a subset of substantially similar related portfolios can make the advertisement misleading by omission, because the audience is not seeing the full set required by the SEC’s marketing rule condition. (17 CFR § 275.206(4)-1)

Practical 30/60/90-day execution plan

First 30 days (stabilize and stop the bleeding)

• Inventory every active marketing template and identify which ones include related performance. (17 CFR § 275.206(4)-1)
• Publish an interim rule: no related performance goes out without a documented related-portfolio list from a controlled source and compliance sign-off. (17 CFR § 275.206(4)-1)
• Assign owners: performance data owner, strategy classification owner, marketing intake owner, compliance approver. (17 CFR § 275.206(4)-1)

Days 31–60 (build the governed dataset and workflow)

• Finalize the written “related portfolios” definition and exception approach. (17 CFR § 275.206(4)-1)
• Build the portfolio-to-strategy mapping inventory and implement change controls (onboarding, mandate change, termination). (17 CFR § 275.206(4)-1)
• Add required workflow steps: intake question, completeness attachment, version control, re-approval trigger. (17 CFR § 275.206(4)-1)

Days 61–90 (test, train, and operationalize)

• Train marketing, IR, sales, and product on trigger identification and completeness rules. (17 CFR § 275.206(4)-1)
• Run QA testing on a sample of approved ads; document defects and corrective actions. (17 CFR § 275.206(4)-1)
• Stand up ongoing monitoring and reporting: ads with related performance, exceptions granted, mapping changes, and any late-stage edits requiring re-approval. (17 CFR § 275.206(4)-1)

Frequently Asked Questions

Does this requirement apply if we show performance for only one client account in a pitchbook?

If that account’s performance is presented as a related portfolio (for example, representative of a strategy), the advertisement cannot include it unless you also include performance for all substantially similar related portfolios. Document your determination and the related set. (17 CFR § 275.206(4)-1)

Can we exclude accounts with client-imposed restrictions from the related set?

The rule’s trigger is “substantially similar investment policies, objectives, and strategies,” so any exclusion needs a documented, consistently applied rationale tied to those factors. Build the rationale into your written standard and retain it with the ad file. (17 CFR § 275.206(4)-1)

Do we have to list every related portfolio individually, or can we aggregate?

The requirement is that the advertisement includes the performance of all related portfolios. If you aggregate, your records must prove the aggregation includes the full related population identified by your inventory as of the ad date. (17 CFR § 275.206(4)-1)

What’s the fastest way to detect “related performance” content during review?

Add a mandatory intake question and reviewer checklist item that flags strategy/portfolio performance tables, “representative account” exhibits, and any statement implying results are from a related set. Then require the related-portfolio completeness artifact before approval. (17 CFR § 275.206(4)-1)

How do we handle mandate changes mid-period that affect whether portfolios are “substantially similar”?

Treat mandate changes as a mapping-change event with an effective date. Your ad file should show the related set as of the approval date and how you handled portfolios that changed classification. (17 CFR § 275.206(4)-1)

What evidence do we need to keep to defend ourselves in an exam?

Keep the strategy mapping/inventory extract, the completeness check, the performance support reports, and the final approved ad version with approval timestamps. The goal is to prove the population was complete and the numbers were supported. (17 CFR § 275.206(4)-1)