# SEC Div. of Examinations — Risk Alert: Additional Observations Regarding Advisers' Compliance with the Advisers Act Marketing Rule — Dec. 16, 2025

**Primary artifact:** `sec-finfluencer-risk-alert-2025.pdf` (archived in this folder; PDF v1.7, ~288 KB)

- **Source URL:** https://www.sec.gov/files/exams-riskalert-mrkt-rule-2512-508.pdf
  (Landing page: https://www.sec.gov/compliance/risk-alerts/additional-observations-regarding-advisers-compliance-advisers-act-marketing-rule ; found via the SEC Exams page https://www.sec.gov/exams → Risk Alerts index)
- **Pinpoint cite:** SEC Division of Examinations, Risk Alert, *Additional Observations Regarding Advisers' Compliance with the Advisers Act Marketing Rule* (Dec. 16, 2025). Addresses Advisers Act Rule 206(4)-1(b) (Testimonials and Endorsements Provisions) and Rule 206(4)-1(c) (Third-Party Ratings Provisions) under the Investment Advisers Act of 1940.
- **Access method:** curl with SEC-required contact User-Agent (`-A "Clinq Labs Research research@clinqlabs.ai"`). Generic curl and the WebFetch tool both hit SEC's 403 on the `/exams` and detail pages; the contact-UA curl returned 200. PDF verified via `file` (PDF document, version 1.7) and size (~288 KB).
- **Retrieved-date:** UNKNOWN (pulled during a session dated 2026-07-01; retrieval clock not independently verified — left UNKNOWN per anti-fabrication rule)
- **Status:** primary-archived

## Note on the TARGET vs. this document

The task named a "finfluencer/endorsement disclosure" exam-focus Risk Alert (Dec 2025). The actual Dec. 16, 2025 Exams Risk Alert is titled *Additional Observations Regarding Advisers' Compliance with the Advisers Act Marketing Rule*. It is the on-point primary source: it is the Dec-2025 exam Risk Alert whose core subject is **paid-endorsement / social-media-influencer disclosure** under Rule 206(4)-1(b). It expressly discusses "social media influencers" acting as compensated promoters and the disclosures advisers must make when paying them. No separate document titled "finfluencer Risk Alert" exists on the SEC Risk Alerts index for that date; this is it.

## Why this matters for creator/finfluencer comp

This Risk Alert tells you what SEC Exams staff is *actually flagging* when an adviser pays a creator/influencer to endorse it or refer clients. The disclosure stack under Rule 206(4)-1(b) is the operative regime for a Clinq creator-distribution structure that routes advisory clients through a paid creator:

1. **Clear-and-prominent disclosure** — at the time of dissemination — of (i) whether the promoter is a client/investor, (ii) whether the promoter was paid **cash or non-cash** compensation, and (iii) any **material conflict of interest**. Hyperlinks and small/light-font disclosures fail the "clear and prominent" standard; the disclosure must be *within* the endorsement and at least as prominent as it.
2. **Material terms of the compensation arrangement** must be disclosed — generic "the promoter is compensated" language that omits the terms of the referral payment is a deficiency. Cash amount, or the percentage-of-fee and time period, or ascertainable non-cash value, must be disclosed.
3. **Oversight/compliance**: a written agreement with any promoter paid above the **de minimis threshold**, plus a reasonable-basis-for-belief that the promoter actually delivers the required disclosures.
4. **De minimis = $1,000 or less over the preceding 12 months** — staff caught advisers that paid <$1,000 *per instance* but exceeded $1,000 in aggregate over 12 months, so the de minimis exemption did **not** apply and a written agreement was required.
5. **Ineligible-person bar**: advisers may not compensate a promoter who is a disqualified/ineligible person (Rule 206(4)-1(b) + (e)(4) + (e)(9)).
6. **Threshold gate (footnote 4)**: separately, a promoter must self-determine whether *it* must register as an investment adviser or as a broker-dealer under §15(a) of the Exchange Act — the endorsement carve-out does not cure a promoter who is really acting as a broker.

## Key sections flagged (verbatim, with locators)

**§ I Introduction — scope: Rule 206(4)-1(b) Testimonials & Endorsements + Rule 206(4)-1(c) Third-Party Ratings:**
> "This Risk Alert addresses the staff's observations regarding advisers' compliance with the conditions set forth in the following provisions of the Marketing Rule: Advisers Act Rule 206(4)-1(b) (the 'Testimonials and Endorsements Provisions') and Rule 206(4)-1(c) (the 'Third-Party Ratings Provisions'). In particular, the Division addresses observations regarding advisers' satisfaction of disclosure requirements and oversight and compliance practices under the Testimonials and Endorsements Provisions, as well as advisers' due diligence and disclosure requirements under the Third-Party Ratings Provisions."

**§ II.A ¶1 — the two things Rule 206(4)-1(b) requires when paying for an endorsement (disclosure/oversight conditions + ineligible-person bar):**
> "The Marketing Rule's Testimonials and Endorsements Provisions prohibit the use of testimonials and endorsements in advertisements unless the adviser satisfies certain disclosure and oversight conditions. These Provisions also prohibit advisers from compensating certain ineligible persons for providing testimonials or endorsements."

**Footnote 7 — the compensated-endorsement disclosure/oversight stack + ineligible/disqualified person definitions (Rule 206(4)-1(b), (e)(4), (e)(9)):**
> "See Advisers Act Rule 206(4)-1(b), which prohibits an adviser from compensating a person, subject to certain qualifying exemptions, directly or indirectly, for a testimonial or endorsement, unless the investment adviser complies with certain disclosure, oversight, and compliance requirements, and if the recipient of the compensation is a disqualified person. See also Advisers Act Rule 206(4)-1(e)(4), which defines certain disqualifying events, and Advisers Act Rule 206(4)-1(e)(9) (defines an ineligible person as a 'person who is subject to a disqualifying Commission action or is subject to any disqualifying event' and specifies certain persons associated with ineligible persons who are also ineligible)."

**Footnote 7 (cont.) — the de minimis definition, Rule 206(4)-1(e)(2), $1,000-or-less:**
> "Rule 206(4)-1(b)(i) states that testimonials and endorsements disseminated for no compensation or de minimis compensation are not required to comply with certain of the Testimonial and Endorsement Provisions. Lastly, Rule 206(4)-1(e)(2) defines 'de minimis compensation' to be 'compensation paid to a person for providing a testimonial or endorsement of a total of $1,000 or less.'"

**Footnote 4 — threshold gate: promoter's own IA / broker-dealer §15(a) registration duty:**
> "See Marketing Rule Adopting Release, supra note 1, pp. 56-58 (any promoter must determine whether it is subject to statutory or regulatory requirements under Federal law, including the requirement to register as an investment adviser pursuant to the Advisers Act and/or as a broker-dealer pursuant to section 15(a) of the Exchange Act, respectively)."

**§ II.A — clear-and-prominent disclosure content (cash/non-cash comp + material conflict), Rule 206(4)-1(b)(1)(i):**
> "The staff observed advertisements that contained testimonials or endorsements that did not provide one or more of the required clear and prominent disclosures, such as whether the promoter (i.e., the person providing a testimonial or endorsement) was a current client or investor in a private fund advised by the investment adviser, and, if applicable, whether the promoter was paid cash or non-cash compensation and/or had a material conflict of interest. In some instances, the required disclosures were provided, but not made in a clear and prominent manner. For example, the staff observed advisers that used hyperlinked disclosures rather than including the required clear and prominent disclosures within the testimonial or endorsement, and disclosures that were not clear and prominent because the disclosure was in a smaller or lighter font than the testimonials or endorsements to which they were related."

**§ II.A — social-media influencers named; material terms of the referral-payment comp must be disclosed, Rule 206(4)-1(b)(1)(ii):**
> "Disclosure of material terms of compensation arrangements. The staff observed advisers that did not disclose the material terms of compensation arrangements, including a description of the compensation provided directly or indirectly to the promoters for the testimonials or endorsements included in their advertisements. The staff also observed advisers providing generic disclosures about compensation arrangements that omitted certain material information. For example, the staff observed advisers that disclosed that promoters, including social media influencers, received compensation from advisers for client referrals but omitted material information about the compensation terms of the referral payments."

**Footnote 16 — how much comp detail must be disclosed (amount / percentage-of-fee + period / non-cash value):**
> "If a specific amount of cash compensation is paid, the advertisement should disclose that amount. If the compensation takes the form of a percentage of the total advisory fee over a period of time, then the advertisement should disclose such percentage and time period. With respect to non-cash compensation, if the value of the non-cash compensation is readily ascertainable, the disclosures should include that amount."

**§ II.A — material-conflict disclosure, Rule 206(4)-1(b)(1)(iii):**
> "Disclosure of the material conflicts. The staff observed advisers that did not disclose material conflicts resulting from the advisers' relationships with promoters and/or the compensation arrangements for the testimonials or endorsements included in the advisers' advertisements."

**§ II.A — oversight/compliance: reasonable-basis-for-belief + written agreement with paid promoters, Rule 206(4)-1(b)(2)(i) & (b)(2)(ii):**
> "The oversight and compliance provisions for testimonials and endorsements require advisers to have a reasonable basis for believing that the testimonials or endorsements complied with the Testimonials and Endorsements Provisions ('reasonable basis for belief requirement') and written agreements with paid promoters. The staff observed advisers that did not appear to comply with these provisions."

**§ II.A bullet — written agreement required above de minimis; the once-you-cross-$1,000-over-12-months trap, Rule 206(4)-1(b)(4)(i) & (e)(2):**
> "Advisers that did not enter into or maintain written agreements with paid promoters (who received compensation above the de minimis threshold) that described the scope of the agreed-upon activities and the terms of the compensation for those promotion activities. ... In some cases, advisers claimed the arrangements met the requirements of the exemption for de minimis compensation because each time the adviser compensated the promoter, it was for less than $1,000; however, the total compensation exceeded $1,000 during the preceding 12 months and, thus, did not meet the definition of de minimis compensation set forth in the Marketing Rule."

**Footnote 18 — reasonable-basis mechanics for a blogger/influencer promoter (adviser supplies disclosures + confirms delivery; may bind promoter in the written agreement):**
> "if a blogger or social media influencer is endorsing and referring clients to the adviser through his or her website or platform, the adviser may provide such blogger or influencer with the required disclosures and confirm that they are provided appropriately on his or her respective pages. The adviser may choose to include provisions in its written agreement with the promoter, requiring the promoter to provide the required disclosures to investors."

## Staff-statement caveat (verbatim, cover footnote *)

> "This Risk Alert represents the views of the staff of the Division of Examinations (the 'Division'). This Risk Alert is not a rule, regulation, or statement of the Securities and Exchange Commission ('SEC' or the 'Commission'). The Commission has neither approved nor disapproved the content of this Risk Alert. This Risk Alert, like all staff statements, has no legal force or effect; it does not alter or amend applicable law, and it creates no new or additional obligations for any person."