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Form ADV Part 1A Item 5L(1)(a) · Answer type: yn · Item 5 - Advertising
Item 5L(1)(a) asks whether any of the firm's advertisements include performance results - meaning past investment returns, track records, or other historical performance data in their marketing materials.
Performance results under the SEC marketing rule includes any numerical return figures, charts showing past gains or losses, percentage returns over specific time periods, or comparisons to benchmarks. This covers materials like website performance tabs, marketing brochures showing portfolio returns, social media posts highlighting successful trades, or presentation slides with historical track records.
The scope includes both gross and net returns, whether presented as annual figures, cumulative returns, or average performance over multiple periods. It captures performance of individual accounts, composite returns across client portfolios, or model portfolio results that the firm promotes.
A firm showing a chart of how their "Growth Strategy returned 12% annually over the past five years" or highlighting that they "beat the S&P 500 in seven of the last ten years" would mark Yes. A firm that only describes their investment philosophy without citing specific returns would mark No.
Yes
The adviser includes numerical performance data, historical returns, or track-record displays in their advertising. This means they are showing prospects how investments performed in the past, subject to SEC marketing rule requirements about fair presentation, required disclosures, and substantiation.
No
The firm does not include performance results in advertisements on this checkbox. Their marketing may still describe investment strategies, list services, or include testimonials, but does not highlight specific return figures or historical performance data.
5L(1)(a) - Do any of your advertisements include performance results (Yes / No).
This checkbox sits within Item 5L, which covers the firm's advertising practices under SEC marketing rule requirements.
Performance advertising can powerfully influence investment decisions, but past returns do not guarantee future results. A Yes answer signals that you should carefully evaluate any performance claims in the firm's marketing materials.
When a firm advertises performance, they must follow specific SEC rules about how returns are calculated, what time periods are shown, what disclosures accompany the numbers, and how results are presented to avoid misleading investors. However, the checkbox alone does not tell you whether their performance presentations comply with these requirements.
A Yes does not tell you the actual performance figures, whether returns are gross or net of fees, what time periods are covered, how performance is calculated, or whether the displayed results would apply to your specific situation. It also does not indicate whether the firm's marketing complies with SEC presentation standards.
Use 5L(1)(a) as a flag to scrutinize performance materials more carefully, ask about calculation methods and time periods, and verify that any claims come with proper context and disclosures.
Yes
The firm reports including performance results in advertisements. On the firm's Best Investors ADV panel, check neighboring Item 5L rows to see if they also use hypothetical performance (5L(3)) or predecessor performance (5L(4)). If you are considering this firm, request copies of their actual marketing materials to review the specific performance claims, time periods covered, and required disclosures.
No
The firm does not report performance results in advertisements on this checkbox. They may still advertise using other approaches like client testimonials (5L(1)(c)), endorsements (5L(1)(d)), or third-party ratings (5L(1)(e)). Check these related 5L boxes to understand their complete marketing approach.
Look at the firm's Item 5F regulatory assets under management for context about the scale of assets behind any advertised performance, and review their Item 5G services to understand what investment approaches they are promoting.