How to disclose a Five Star Wealth Manager award

A Five Star Wealth Manager award, a Forbes Best-in-State ranking or a Barron's list is a "third-party rating" under Rule 206(4)-1(e)(18): a rating or ranking of an adviser by an unrelated person who provides ratings in the ordinary course of business. Paragraph (c) lets you advertise it only if two conditions are met. Both apply to every place the award appears: website, email signature, LinkedIn, press releases, pitchbooks and office materials handed to prospects. This guide is general information for SEC-registered advisers, not legal advice.

What does Rule 206(4)-1(c) require?

(c)(1) Due diligence. You must have a reasonable basis for believing that any questionnaire or survey used to prepare the rating "is structured to make it equally easy for a participant to provide favorable and unfavorable responses, and is not designed or prepared to produce any predetermined result." The adopting release says you can get there by obtaining representations from the provider about how the survey is designed, structured and administered, or from the provider's published methodology. You do not need its proprietary data.

(c)(2) Disclosures. You must clearly and prominently disclose, or reasonably believe the rating itself discloses:

1. the date on which the rating was given and the period of time upon which it was based (both);
2. the identity of the third party that created and tabulated the rating; and
3. if applicable, that compensation has been provided directly or indirectly by the adviser in connection with obtaining or using the rating.

The adopting release says that to be clear and prominent the disclosure "must be at least as prominent as the third-party rating." In practice that means in text beside the logo, in a comparable size, not behind a link.

What did the December 2025 risk alert find about ratings?

The 16 December 2025 alert reported these observations about third-party ratings:

• Advisers without enough information to form a reasonable basis about the survey design, with no policies for the due diligence requirement and no copy of the questionnaire.
• Links to the provider's site, where neither the adviser nor the provider gave the disclosures.
• No date or period shown, and year ranges that included a year in which the adviser did not receive the award.
• Logos that did not clearly identify who created and tabulated the rating.
• Undisclosed payments for use of the provider's logo or reprints, for priority placement or upgraded exposure in the provider's materials, for referrals through links on the provider's site, and fees to be considered for the rating.
• Disclosures behind hyperlinks, in smaller type, or at the bottom of the page away from the rating.

The earlier April 2024 alert added that some advisers implied they were the sole or top recipient of awards given to many people, or did not say that a rating rested mainly on factors unrelated to the quality of advice, such as assets under management or number of clients.

What does Five Star Professional itself say?

Its published program summary and research methodology (marked "Updated September 2021") states that wealth managers "do not pay a fee to be included in the research process or to be named a Five Star Wealth Manager," that winners may elect to pay a fee for a photo and profile in the magazine section, and that "for additional fees" it provides tools for publicising the award. It describes nomination by peers and firms or pre-qualification, a regulatory review, and ten eligibility and evaluation criteria including client retention, assets administered and households served. The document predates the rule's 2022 compliance date and frames itself against older staff guidance, so treat it as one input to your (c)(1) file, not a substitute. Ask the provider for the current methodology, the research period for your specific award, and a written list of any fees you paid, then keep them.

A sample disclosure to adapt

Illustration only. This is not approved language from the SEC or the provider. Fill every bracket from your own records and have your CCO (or counsel) review it before use.

[Adviser name] received the Five Star Wealth Manager award, [market], given on [date of award]. The award was created and tabulated by Five Star Professional, based on research conducted from [start date] to [end date]. [Firm] [did not pay a fee to be considered / paid a fee of $[amount] to be considered]. [Firm paid $[amount] to Five Star Professional for (a profile in the published list / use of the award logo / reprints / promotional materials).] The award is not indicative of future performance.

If you paid nothing at all, say so plainly. If the award rests largely on assets or client numbers, consider saying that too, to meet the general prohibition in (a)(1) on omitting material facts.

Forbes Best-in-State, Barron's and other rankings

The same four disclosures apply to every ranking. Forbes Best-in-State lists are published with SHOOK Research, so the creator to name is the research firm that tabulated the list, as stated in its methodology. For any ranking: identify the publisher and the tabulator, the publication date, and the data period; confirm in writing whether you paid for reprints, plaques, logo use or advertising; and keep the methodology. Do not repeat a ranking from a previous year as if current, and give the ranking for the right person (many awards go to an individual representative, not the firm).

What to keep on file

• A copy of the questionnaire or survey, if you obtain one (Rule 204-2(a)(11)(ii)). The 2024 alert found advisers who completed questionnaires and did not keep a copy.
• Documentation of your reasonable basis under (c)(1): methodology, provider representations, your review note ((a)(15)(ii)).
• The award letter showing date and period, invoices for any fees, and each advertisement showing the award.
• An updated Form ADV Item 5.L answer: third-party ratings yes, and whether you pay in connection with them.

Plumb's promoters and ratings register records the provider, date given, period, any compensation and the disclosure text you used. You can run your website through the free website check to see where an award appears without a date, period, provider or fee statement. The wider checklist is in the Marketing Rule checklist. State-registered advisers should check their state's advertising rule; NASAA's 2026 model amendments take effect only where a state adopts them.