Can RIAs Use Testimonials and Performance Data on Their Website? Yes, Within Limits.

A testimonial (a statement from a current client) and an endorsement (a statement from a non-client, like a referring CPA or attorney) are both allowed under Rule 206(4)-1(b).² Both require the same three disclosures, placed near the statement itself, not buried in a footer:

• Whether the person is a current client (testimonial) or explicitly not a client (endorsement)
• Whether they received cash or non-cash compensation for saying it — a fee waiver counts
• Any material conflict of interest created by the relationship, such as a referral fee paid to a CPA who sends clients your way

"Clear and prominent" is doing real work in that sentence. A disclosure linked from a separate page doesn't meet the bar. It needs to sit next to the testimonial a visitor is actually reading.

Third-Party Ratings and Awards: Context Beats the Badge

"Top RIA of 2026" means nothing to a compliance examiner without three things attached: who gave the award, what time period and criteria it covered, and whether you paid to be considered. Rule 206(4)-1(c) requires the adviser to have a reasonable basis for believing the rating process wasn't designed to produce a predetermined result, and to clearly disclose the date, the source, and any compensation paid.³ The SEC's concern isn't the award itself, it's pay-to-play recognition presented as if it were earned on merit alone. If the badge on your homepage doesn't link to a page explaining those three things, an examiner will ask why.

This is the highest-scrutiny category, for good reason: it's where cherry-picking causes the most investor harm. Three rules govern it:

• Net performance must appear with equal prominence to gross performance. This is a direct requirement of the net performance provisions of the rule, not a best practice.⁴ Showing pre-fee returns without the post-fee number next to it is a common violation, not an edge case.
• Show 1-, 5-, and 10-year figures (or since inception, for younger firms) under Rule 206(4)-1(d)(2) — not just whatever period makes the firm look best.⁴
• Hypothetical performance (backtested results, model portfolios, projected returns) is allowed under Rule 206(4)-1(d)(6) but comes with a real burden: you need policies ensuring it's relevant to the audience seeing it, enough context for that audience to understand its limitations, and explicit risk disclosure.⁵ For a public-facing website with no way to screen who's viewing it, the adopting release is explicit that the general public generally isn't an appropriate audience for hypothetical performance.⁵ If you're using it, a gated portal for qualified investors is the safer structure.

Fails the rule:

"WealthGrowth RIA is the top-rated firm in the state! Our clients love us. One client, John S., says: 'I've seen 20% returns every year since I joined.' Look at our 2025 Model Portfolio which outperformed the S&P 500 by double digits!"

Every sentence here breaks something: an unsubstantiated superlative, a testimonial with zero disclosure, a return claim with no net-of-fees figure, and hypothetical performance shown to a general audience with no risk language attached.

Passes the rule:

"WealthGrowth RIA was named a 'Top 50 Emerging Firm' by RIA Magazine in 2025. Criteria included AUM growth and staff-to-client ratios; no compensation was paid for this rating. Client Testimonial: 'The planning process gave us peace of mind during our transition to retirement.' — Jane D., Current Client (No compensation provided)."

Same content, same intent to build credibility. The difference is entirely in what's disclosed next to it.

Before you publish or update anything on your site, check it against these five items:

1. Disclosure proximity — is the disclosure sitting next to the testimonial or rating, not linked from elsewhere?
2. Fee transparency — does every performance figure show net alongside gross, with equal visual weight?
3. Time period consistency — are you showing 1-, 5-, and 10-year figures, not just the best window?
4. Rating context — date, source, and payment disclosure present for every award or badge?
5. Substantiation file — do you have documentation on hand for every factual claim on the site ("500 families served," "since 1998," etc.)? Examiners can and do ask for it.

This article summarizes Rule 206(4)-1 under the Investment Advisers Act of 1940. This is a plain-language summary, not legal advice — pressure-test any specific claim, testimonial, or performance display against the full rule text or your own securities counsel before publishing.

References

1. 17 CFR 275.206(4)-1, eCFR current text. Amendments adopted by the SEC on December 22, 2020, Investment Adviser Marketing, Release No. IA-5653; effective May 4, 2021; compliance date November 4, 2022. Ongoing exam focus confirmed in SEC Division of Examinations, Risk Alert: Examinations Focused on the New Investment Adviser Marketing Rule (June 8, 2023).
2. Rule 206(4)-1(b), conditions applicable to testimonials and endorsements. Full rule text, eCFR.
3. Rule 206(4)-1(c), third-party ratings. Full rule text, eCFR.
4. Rule 206(4)-1(d), performance advertising, including net performance and 1-/5-/10-year presentation requirements. Full rule text, eCFR; see also SEC, Marketing Compliance Frequently Asked Questions for staff guidance on net performance presentation.
5. Rule 206(4)-1(d)(6), hypothetical performance conditions. Full rule text, eCFR; discussion of intended audience limitations in the adopting release, IA-5653.