The North American Securities Administrators Association has approved amendments to four model rules governing investment advisor advertising, bringing state-level requirements closer to the Securities and Exchange Commission's 2020 standards. The changes, which were released for public comment in July 2025, allow state-registered advisors to use testimonials, endorsements, and more detailed performance reporting under defined conditions. NASAA members voted to adopt the updates in an effort to reduce inconsistencies between state and federal regulation while maintaining investor safeguards.
Marni Gibson, chair of NASAA's Investment Adviser Section, thanked the section members for their work on the amendments. "These amendments promote consistency in the regulation of investment advisers and reinforce our commitment to fair markets while maintaining robust protections for investors," added Stephen Brey, NASAA president and director of the Alabama Securities Commission. The updates are expected to ease compliance burdens for advisors registered at the state level, who previously faced a patchwork of rules that diverged from the SEC's framework.
Separately, NASAA introduced a new model law aimed at strengthening oversight of franchise brokers, an area that has historically lacked uniform standards. The NASAA Model Franchise Broker Registration Act establishes a framework for states to require registration of third-party brokers who market franchise opportunities. Currently, only a handful of states mandate such registration, leaving many franchisees without clear information about the intermediaries they deal with.
"For many individuals, buying a franchise is the largest investment of their lives. They deserve to know exactly with whom they are dealing," Gibson said. The model act introduces consistent requirements including mandatory registration, enhanced disclosure of compensation and legal history, and strict recordkeeping obligations. Theresa Leets, NASAA's franchise project group chair, noted that the act "fills a critical gap in the franchise sales process" and fosters a fairer marketplace for brokers and entrepreneurs.
The twin initiatives reflect NASAA's broader push to modernize oversight frameworks and close regulatory gaps. The advertising rule changes align state rules with the SEC's 2020 amendments, which had already allowed federal advisors to use testimonials and performance data. By adopting similar provisions, state regulators aim to create a more level playing field for advisors operating across jurisdictions.
Industry observers note that the franchise broker model law could have significant implications for the growing franchise sector, where third-party brokers often facilitate deals without direct oversight. The act is designed for broad adoption by states, potentially creating a uniform standard that reduces confusion and enhances transparency. NASAA expects to work with member states on implementation over the coming months.
For advisors, the advertising amendments may open new marketing opportunities, particularly for those using digital platforms and client testimonials. However, firms will need to ensure compliance with the specific conditions outlined in the model rules, including disclosure requirements and performance reporting standards. The changes are part of a broader trend toward harmonizing state and federal regulations, as seen in recent SEC sweep targets private credit disclosures at 14 funds.
NASAA's actions come amid ongoing regulatory developments in the wealth management space, including Wells Fargo's launch of an AI-enhanced advisor gateway and UBS's restructuring of its Florida market. The association's focus on closing regulatory gaps aligns with broader efforts to enhance investor protections in an evolving financial landscape.
