Private Fund Marketing Rules in 2026: Three Compliance Areas Placement Agents Should Watch

If you spend any time around private fund marketing, you’ve probably had this reaction:

“Wait a minute. An SEC-registered investment adviser can show target returns to sophisticated institutional investors, but a FINRA-registered placement agent can’t?”

That’s not a misunderstanding. That’s actually where the rules stand today.

It’s one of the most common questions we receive from fund sponsors, placement agents, and investment bankers involved in private capital raising for funds.

In recent years, the SEC has significantly expanded its focus on fund marketing through the Investment Adviser Marketing Rule, while FINRA has proposed changes that could eventually reshape how funds can communicate performance information to institutional investors.

In the meantime, regulators continue to scrutinize performance claims, fee disclosures, and marketing materials across websites, pitch decks, social media, and fundraising presentations. And while certain marketing practices may seem common in the marketplace, they're not necessarily permitted under the rules that apply to their business.

At Britehorn Securities, we closely monitor developments from FINRA and the SEC and regularly update our representatives as rules evolve. As the regulatory landscape changes, our responsibility is to help our representatives operate within the rules that exist today — not the rules we hope may exist tomorrow.

Here are three private fund marketing compliance areas that placement agents and fund sponsors should continue watching closely.

1. Projected Returns and FINRA Rule 2210

One of the most frequently misunderstood areas of private fund marketing involves projected returns, target IRRs, and other forward-looking performance claims.

Under FINRA Rule 2210(d)(1)(F), communications generally may not “predict or project performance, imply that past performance will recur or make any exaggerated or unwarranted claim, opinion or forecast.” FINRA has further clarified that targeted returns are generally viewed as a type of performance projection and are therefore subject to the same restrictions.

We often catch these in marketing materials submitted to us for review — phrased as target IRR, goal returns, target MOIC, or similar terminology. We often see these materials land in our inboxes directly from funds we're not affiliated with — or even approved by other broker-dealers. Yes, this is technically against the rules.

In many cases, the issue isn’t intentional non-compliance; it’s simply a misunderstanding of how broadly FINRA interprets the prohibition on projected performance. As Britehorn’s current guidance for our registered reps explains, communications concerning private placements may not project or predict returns to investors — including future yields, income, dividends, capital appreciation percentages, or other future investment performance measures.

It’s also important to note that FINRA has historically distinguished between projected investment performance and forecasted issuer operating metrics, such as projected revenue growth, EBITDA, customer acquisition figures, or other business forecasts. Forecasted operating metrics are permissible in appropriate circumstances, but firms should ensure they have a reasonable basis for any projections presented.

What About FINRA’s Proposed Rule Changes?

FINRA has been attempting for several years to modernize Rule 2210 and better align broker-dealer communications with the SEC’s Investment Adviser Marketing Rule.

An amendment to Rule 2210 to this effect was proposed in November 2023 and initially approved by the SEC in 2024. However, that approval was subsequently stayed before the amendment became effective.

In February 2026, FINRA submitted a revised proposal (SR-FINRA-2026-004) that would permit member firms, under specified conditions, to provide projected performance and targeted returns in certain communications directed to institutional investors and qualified purchasers.

If approved, the proposal would represent a significant change for private placement agents, fund sponsors, and institutional capital raisers. Among other things, firms would be required to establish policies and procedures governing the use of projections, maintain a reasonable basis for assumptions used, and provide appropriate disclosures regarding risks and limitations.

However, it is important to remember that these proposed amendments have not been approved and are not currently in effect. Britehorn’s internal guidance continues to reflect this position.

As of today, broker-dealers should continue to operate under the existing rule.

When Will We Know?

The honest answer is that nobody knows.

The proposal is currently under SEC review, and there is no guaranteed timetable for approval, modification, or rejection. While many industry participants support the proposal, the SEC could approve it, request further revisions, or take no action for an extended period of time.

As a result, placement agents should avoid making compliance decisions based on expectations about where the rules may ultimately end up. Until the rules formally change, firms should continue operating under the existing Rule 2210 framework.

Our Compliance Approach

At Britehorn, we do not permit projected returns, target IRRs, or similar forward-looking investment performance claims in private placement marketing materials.

We recognize that market practices vary. It is not uncommon to encounter fund websites, marketing decks, or social media content that include target returns or other forward-looking performance metrics. In some cases, those materials may be produced by parties who are not FINRA-registered. In others, firms may simply be taking a more lax interpretation of the rules hoping they will change soon.

Our philosophy is simple:

Don’t build your compliance program around proposed rules.

Rather than trying to predict where regulators may ultimately draw the line, we believe the better approach is to follow the guidance currently available and adjust if and when the rules formally change.

2. Historical Performance & Fee Disclosure

Even when firms avoid projections, historical performance claims continue to present regulatory risk. One area receiving increased regulatory attention involves situations where historical net returns were calculated using fee structures that differ from the fees currently being offered to prospective investors.

For example, a sponsor may present historical net IRRs generated during a prior fund or investment period while current investors are expected to pay higher management fees, carried interest, or other expenses.

In those situations, regulators may question whether investors are receiving a fair and balanced understanding of the performance they can reasonably expect under the current fee structure.

Best Practices

When discussing historical fund performance, consider:

• Reviewing whether current fee arrangements differ materially from historical fees.

• Presenting additional context regarding fee assumptions where appropriate.

• Maintaining documented compliance review procedures for performance claims.

• Conducting periodic reviews of fundraising presentations, websites, and one-pagers to ensure disclosures remain current.

In many cases, performance disclosure issues arise not because anyone intended to mislead investors, but because fee structures, offering terms, or marketing materials evolved over time.

Regular review processes can help identify those issues before regulators do.

3. Gross Performance vs. Net Performance

Another area where fund marketers frequently encounter compliance issues involves the presentation of gross and net performance.

Under the SEC’s Investment Adviser Marketing Rule and FINRA Rule 2210, advisers generally may not present gross performance unless net performance is also presented for the same time periods and with at least equal prominence.

The principle behind the rule is straightforward: investors should be able to understand both the investment results generated and the impact of fees and expenses on those results.

For example, presenting a gross IRR of 22% while burying a net IRR of 16% in a footnote would likely raise regulatory concerns. Instead, gross and net performance should generally be presented together in a clear and balanced manner.

Compliance Is Easier Than Remediation

Private fund marketing rules are evolving, but the core lesson remains the same: strong compliance practices are far less expensive than regulatory remediation. It is much easier to revise a marketing deck before it goes out than to explain why you broke the rules to regulators years later.

For placement agents and fund sponsors, that means paying close and ongoing attention to:

• Projected returns and target IRRs

• Historical performance claims

• Fee-related disclosures

• Gross and net performance presentations

At Britehorn Securities, we view compliance as a business enabler rather than a business obstacle. Our role is to help representatives market effectively, communicate clearly with investors, and raise capital while remaining within the regulatory framework that exists today.

As FINRA and the SEC continue refining their approaches to marketing and performance advertising, we will continue monitoring developments and keeping our representatives informed of any changes that affect their businesses. Don't hesitate to get in touch if you have any questions!