ICI Backs FINRA Proposal Permitting Projections in Marketing to Retail Investors

The Investment Company Institute ("ICI") supported FINRA’s proposal to permit performance projections and target returns in broker-dealer communications, underscoring their usefulness in informing investor decision-making. 

In a comment letter to the SEC, the ICI supported the 2026 proposed amendments to FINRA Rule 2210 ("Communications with the Public"), praising the move away from the rule’s current near-prohibition on projected performance. The ICI stated that, when accompanied by appropriate safeguards, hypothetical performance can help investors evaluate concepts such as portfolio volatility, asset allocation, and compound returns, and assess how to achieve financial goals like retirement. The ICI also supported the proposal’s efforts to align more closely with the SEC’s 2020 marketing rule for investment advisers, while asserting that further harmonization is needed to reduce compliance burdens and investor confusion. 

While endorsing the overall framework of the 2026 proposed amendments, the ICI identified areas for further change. The ICI urged FINRA to remove the proposed requirement that broker-dealers establish and document a "reasonable basis" for projection assumptions, arguing that existing FINRA Rule 2210 standards already require fair, balanced, and non-misleading communications and that the additional requirement would create practical challenges, particularly for firms using third-party materials. The ICI also encouraged FINRA to continue modernizing the rule by permitting the use of "related performance in retail communications," consistent with the SEC’s approach under the marketing rule for investment advisers.

The ICI also cautioned that if the "reasonable basis" condition is retained, FINRA should provide clear guidance that firms will not be subject to hindsight-based enforcement where projections fail to materialize due to changing market conditions. The ICI concluded by endorsing the proposal as a step forward and encouraged further alignment with SEC standards.