The SEC’s New Modern Marketing Rule: Are You Prepared to Comply?
You’re probably already aware of SEC’s Modern Marketing Rule (Rule 206(4)-1), which replaces previous rules governing advertising by registered investment advisers, including asset managers and private funds.
You may even know these rules are scheduled to go into effect on November 4, 2022.
But does everyone in your firm who is involved in communicating with the public understand the new requirements? And, more importantly, is your firm on track toward meeting these requirements?
If you’re not, you’re not alone. According to Red Oak Compliance Solutions, less than 25% of their clients admit that they’ve fully instituted processes for complying with Rule 206(4)-1.
The good news is that most print and online marketing and advertising materials that asset managers produce already comply with SEC requirements.
However, the SEC’s new rules are designed to close certain loopholes, particularly concerning the way performance information is presented, as well as encompass the reality that messaging platforms like email and social media have become as important as pitchbooks, and web sites in conveying marketing and sales information to clients and prospects.
And, if that wasn’t enough, the SEC will now require asset managers to provide extensive documentation of the processes they used to create, review, approve and distribute advertising materials.
Is there a silver lining here? Perhaps, since the SEC is finally going to allow asset managers to use client testimonials and endorsements in their advertising.
Let’s take a closer look at the key provisions that will create the most work for asset managers—and what they need to do now to comply with the new rules.
Thinking Outside the Box to Engage Financial Advisors and Grow AUM
Over the past couple of years, the way we live, work and communicate has been changed forever. The global pandemic left an indelible mark on the asset management landscape that requires new strategies for engaging both clients and employees. So how do asset managers attract and engage financial advisors and grow assets in a more distributed and remote workforce?
This topic was explored at length at the Spring 2022 IMEA conference in Chicago. Some of take-aways from the event are included in our tips below:
How Asset Managers Use CDPs To Create The MarTech Stack Of The Future
Guest post by Marianne Hewitt, CEO at The Growth Strategy Group. This article first appeared on cdp.com.
Asset managers must continue to drive down expense ratios and keep an intense focus on growth by leveraging modern technologies and improving operational efficiencies. For asset managers to deploy that technology, they need to invest in the marketing technology (Martech) stack of the future.
The Asset Management MarTech Stack Insights and Trends research, in which I collaborated with Synthesis Technology and Sondhelm Partners, identified operational efficiencies as the largest influence for shaping MarTech Stacks in the next two years. Delivering an effective customer experience and generating business insights were also priorities that will influence the construct of the future MarTech stack.Read More
How to Tackle Investment Data Management and Content Automation Initiatives in Tandem
Insights by John Toepfer, CEO and Chris Ruppenstein, Director of Sales at Synthesis Technology
Today, nearly every segment of the economy is seeing an increase in wage pressures and tighter labor markets. As a result, asset management executives are looking to efficiently allocate resources amongst already capacity-constrained teams and business units. This means manual, time-consuming tasks should and must be automated.
Deloitte’s 2022 Investment Management Outlook report showed 45% of survey respondents see operational efficiency as a top driver for digitization. Similarily, Synthesis Technology’s 2021 Asset Management Martech survey also showed operational efficiency as a top driver in terms of Martech stack changes over the next two years (82%). And while most asset management firms have some automation in place, they still are not investing enough in data management solutions. Only 24% of responding firms reported having a data management solution for product data, and even fewer (13%) reported having an integrated product data management and content automation system.
The lack of efficient data processes negatively impacts managers’ efficiency, bottom line, and competitiveness. For example, taking a month after quarter-end to update and distribute marketing and sales materials is costly, puts marketing and sales teams at a disadvantage, and may lead to investors and prospects looking elsewhere.
Managers also face increasing data governance and compliance scrutiny from the due diligence requirements of potential investors and consultants as well as internal stakeholders.