Broker-Dealers Can Now Share Projected Investment Returns
New SEC rules allow firms to provide performance targets, provided they include full disclosures on risks and assumptions.
Updated on Oct. 16, 2026 in Investing
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The Securities and Exchange Commission has approved changes to FINRA Rule 2210, allowing broker-dealers to provide clients with projected investment performance and return targets in their communications. This update standardizes industry marketing practices for investors across the United States.
Why it matters
This rule change aligns FINRA standards with the Investment Advisers Act Marketing Rule, creating a more consistent framework for how firms share hypothetical performance data. Investors may now see more forward-looking projections in their statements, which could influence how they weigh potential investment strategies.
The SEC-approved amendment to FINRA Rule 2210 reverses a long-standing prohibition on projected returns. While firm-level adoption will vary, brokers must now include detailed disclosures regarding the assumptions, risks, and limitations of any projections shared with investors.
The players
Securities and Exchange Commission
The federal agency that enforces securities laws and regulates the investment industry to protect households.
FINRA
An independent organization that oversees broker-dealers and enforces industry rules governing investment sales and communications.
The details
Under the new amendments, broker-dealers are permitted to communicate projected performance for specific securities, investment strategies, and portfolios. To prevent misuse, firms are required to implement policies ensuring these projections are relevant to an individual investor's specific financial situation. Furthermore, every projection must be accompanied by mandatory disclosures detailing the criteria, underlying assumptions, and inherent risks. Note that these changes apply only to projections and do not authorize the use of backtested, model, related, or extracted performance data.
Timeline
October 15, 2026: The SEC officially approved the amendments to FINRA Rule 2210.
Money Landscape
This move brings broker-dealer regulations in line with the Investment Advisers Act Marketing Rule, which has governed how advisory firms communicate hypothetical performance since its 1940 inception. It marks a shift toward standardized marketing expectations across different types of financial institutions.
You may soon see projected returns on marketing materials from your brokerage firm, but you should treat these as estimates rather than guaranteed outcomes. Always ask your financial professional to explain the specific assumptions and risks associated with any projected figures provided to you.
The takeaway
The SEC is modernizing communication standards to allow brokers to share projections, provided they include clear warnings about the risks involved. Review any future projections against your long-term goals and discuss with your financial professional how these estimates were calculated.
Further reading
For more on how regulatory changes affect your portfolio, visit Investing.
More information
Read the full SEC rule approval order for complete details on the new disclosure requirements.
Source note: This article includes information reported by Investmentlawwatch.
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