Sales, Marketing, and Advertising Practices
The standard
MSRB Rule G-21 governs advertising by municipal securities firms, and it reaches websites, social media posts, seminar slides, radio spots, brochures, and email - anything designed to influence the public. Content must be fair and balanced, cannot be misleading, and must disclose material risks: not FDIC insured, not bank guaranteed, may lose value, state tax benefits may be limited to residents, and fees reduce returns. Rule G-17 adds fair dealing and disclosure of conflicts and costs; Rule G-19 governs suitability of recommendations; Rule G-20 limits gifts and entertainment.
Performance and claims
Any performance figure must be accurate, net of fees, tied to a stated time period, and not cherry-picked. Past performance cannot be presented as a promise. Prepaid-plan guarantees must be described precisely - a state guarantee is not a federal guarantee. Testimonials need appropriate context and cannot imply typical results. Social media is not a loophole: a post recommending a plan is advertising and is subject to principal review under the firm's G-27 procedures.
Worked example
A representative's flyer says: Earn 8% tax-free with our 529. The principal should reject it. The 8% figure lacks a time period, is not net of fees, and may not be representative; tax-free is false unless qualified expenses are used; the piece omits risk disclosure; and it may imply a guarantee. Corrected language would state the time period, net return, the conditions for tax-free treatment, and the risk that the account may lose value.
Rule of thumb
Every claim must be supportable, balanced by a risk disclosure, and traceable to a principal's review.