Investment advisers must always disclose their identity in correspondence and advertising in a manner which reflects their registered status. The use of "Doing Business As" names when more than one type of business is conducted by the adviser is acceptable as long as the identity of the investment adviser is clearly disclosed in the same document or other communication. All print advertisements must include the identity of the investment adviser and if an individual other than a sole proprietor adviser is listed in the advertisement, the relationship of that person to the adviser must be disclosed. For example, ABC Advisors Inc. runs an advertisement and lists a contact as Mary Smith, CFP. It must also be disclosed that Mary Smith is an investment adviser representative of ABC Advisors. Mary cannot call herself an investment adviser because she is not registered in that capacity.
Effective with the change in Wis. Stat. Ch. 551 on January 1, 2009, Wisconsin no longer uses the term "license" with regard to investment advisers or investment adviser representatives. All firms and individuals are now "registered." In some states, the securities statutes still use the term "license" in the same way Wisconsin now uses "registered." The Division of Securities recognizes that many advisers will be conducting business in more than one state and that differing terminology may cause additional confusion and expense. Therefore, the division has determined that it will not object to advisers' use of the terms "registered" and "licensed" interchangeably as long as the adviser clearly explains its status to clients and potential clients who inquire about the adviser’s status in Wisconsin.
Advertising does not need to be pre-approved or filed with the division. However, each adviser must have someone responsible for reviewing and approving all advertising prior to publication. The adviser has a responsibility to ensure that the proper disclosures are made and that there are no misleading statements or information included in the advertisements. See Wis. Admin. Code s. DFI-Sec 5.06(11). Copies of all advertisements must be kept in an advertising file; this includes seminar invitations and outlines.
Publishing, circulating or distributing any advertisement that directly or indirectly refers to any testimonial of any kind concerning the investment adviser or investment adviser representative or concerning any advice, analysis, report or other services rendered by the investment adviser or investment adviser representative is prohibited by Wis. Admin. Code s. DFI-Sec 5.06(19). This includes testimonials in any written advertisement such as brochures or newsletters in addition to the adviser’s website or other social media accounts on platforms including, but not limited to, LinkedIn, Facebook or Twitter.
Advisers are urged to avoid any advertisements which make reference to past performance, either real or model. Use of such advertising requires extensive disclosure within the ads (see Clover Capital Management No Action Letter for performance disclosure issues). Complete supporting documentation detailing all information relied on to make the performance claims must be kept and made available upon request.
Customer correspondence may also rise to the level of advertising, especially if a form letter or paragraphs are sent to multiple customers. Therefore, all correspondence recommending securities or securities strategies should be reviewed with the same eye toward disclosure as a print ad.
Phone: (608) 266-2139