Required disclosures and prohibited representations

Performance guarantees and the "no warranty of outcome" rule

Start with the rule that catches the most agents: FINRA Rule 2210(d) and the NASAA Statement of Policy both prohibit any representation that guarantees future investment performance or protects against loss. And it's broader than most candidates expect — it covers any statement, written or oral, that promises a result explicitly or by implication.

Always prohibited:

• "You will earn X% annually" or "This will outperform the market"
• "You cannot lose principal" or "Your money is safe"
• "This strategy has never had a losing year" (even if literally true, it implies a future guarantee)
• Personal indemnification — an agent personally promising to make the customer whole on any loss

Permitted — specific true statements about specific products:

• "Direct obligations of the U.S. Treasury are guaranteed by the full faith and credit of the United States"
• "Bank deposits at this institution are FDIC-insured up to $250,000 per depositor"
• "This callable bond is guaranteed by [the issuer]" — if literally true and the guarantor's name is disclosed

One diagnostic settles every one of these questions: is the guarantee a specific true statement about a specific product, naming the guarantor? Yes → permitted. A general promise of outcome by the firm or the agent → prohibited, no matter how it's dressed up.

Unlawful registration representations

Here's the counterintuitive one. USA §405 and Securities Act §23 both prohibit any representation that registration — with the state or the SEC — constitutes approval of the registrant's qualifications, the merits of any security, or the accuracy of any disclosure. Candidates expect registration to confer some endorsement, because registration is a regulatory event. It confers none. Registration is paperwork, not a blessing.

Always prohibited:

• "SEC-registered, ensuring the quality of our advice"
• "This security has been approved by the state securities administrator"
• "Our registration is your assurance of integrity"
• "State-approved investment strategy"

Permitted — factual statements about registration status:

• "Registered with the SEC as an investment adviser"
• "Registered in [State] as a broker-dealer"
• "A registered representative of [BD] since [date]"

The line runs between stating the status and selling it. And no disclaimer rescues an implied endorsement — the prohibition covers direct statements, indirect implications, and cleverly crafted fine print alike. You'll find the same rule in the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents.

NASAA Senior-Specific Certifications and Professional Designations Rule

Credentials sell trust — which is exactly why NASAA regulates them. The Model Rule on the Use of Senior-Specific Certifications and Professional Designations (2008) restricts how financial professionals may use titles that imply expertise in advising senior clients. It exists because of a real abuse pattern: professionals buying credentials like "Certified Senior Adviser" from weekend seminars and wearing them to target older investors.

Under the Rule, a designation may be used only if all of the following are true:

• The designation was issued by an accredited organization with reasonable qualifications, continuing education, and a public disciplinary process
• The credential has not been issued solely on the basis of paying a fee or attending a marketing session
• The designation is not used in a way that misleads investors about the holder's level of expertise

The real credentials pass: CFP (Certified Financial Planner), CFA (Chartered Financial Analyst), ChFC (Chartered Financial Consultant), CLU (Chartered Life Underwriter), and CPA/PFS (Personal Financial Specialist) all meet the test. The seminar-issued "senior specialist" titles don't — and a designation that fails the test may not be used in any communication with clients or prospects. Not on the business card, not in the email signature, not anywhere.

Tombstone advertisements — Securities Act §134

Normally, no offering communication may go out before a registration statement is effective. Securities Act §134 carves out one narrow, tightly scripted exception: the tombstone advertisement — named for its plain black-rule visual style — a written communication that simply announces a securities offering and identifies the underwriter without soliciting orders. Think of it as an announcement, not an ad: the rule enumerates what it may say, and anything off the list is off limits.

A tombstone ad may include:

• Name of the issuer and the title and amount of the securities
• Per-unit offering price
• The names of the underwriters
• The date of public availability of the prospectus
• A statement directing readers to obtain the prospectus before investing
• A disclaimer that the advertisement is not an offer to sell or a solicitation of an offer to buy

A tombstone ad may not include:

• Recommendations to buy
• Forecasts of issuer performance or projected returns
• Solicitations of indications of interest (those are handled separately under Rule 134(d))
• Any content not authorized by the rule's enumerated list

Required Disclosures

Product Disclosures

• Material risks associated with a recommended security
• Fees and expenses (management fees, 12b-1 fees, loads)
• Conflicts of interest related to the product

Other Required Disclosures

• Form ADV Part 2A (Brochure): Must be delivered to clients before or at the time of entering into an advisory contract
• Form ADV Part 2B (Brochure Supplement): Information about the specific IAR who will service the account
• Form CRS (Client Relationship Summary): Brief document describing the firm's services, fees, conflicts, and disciplinary history
• Changes in financial condition that may impair ability to meet obligations
• Disciplinary history and legal proceedings