Why Automated Templates with Embedded Data Are Not Best Practice (and Risk SEC Non-Compliance)

Using automated email templates that dynamically insert client, fund, or performance data may feel efficient, but in practice it creates a number of risks – both operationally and from a regulatory standpoint.

1. It’s not best practice for investor communications

When templates automatically pull in live data, it becomes very easy for:

• Outdated numbers to be circulated without review
• Inconsistent figures to appear across teams or regions
• Sensitive data to be exposed to the wrong audience
• Messages to be sent without the appropriate sign-off or compliance checks

In short: automation amplifies any mistake. If the underlying data feed is even slightly wrong, the error is instantly scaled across your entire audience. That’s exactly the type of thing the SEC would classify as a “communications control failure.”

2. It raises SEC concerns – especially around performance data

The SEC is very clear on this: performance information must be accurate, current, and reviewed, and the adviser must be able to demonstrate that it was checked prior to distribution. Automated templating works directly against this requirement because:

• It bypasses the mandated human review process
• It can insert unverified or stale performance numbers
• It makes it impossible to evidence who approved what version
• It can result in selective disclosure (e.g., sending different performance numbers to different segments without proper controls)

Under the Marketing Rule, the SEC expects firms to have policies, procedures, and proof for every communication containing performance or material statistics. Automated data-insertion breaks that evidentiary chain.

3. What the SEC expects instead

Regulators look for:

• A frozen, reviewed version of the data
• Logged approvals showing who checked it and when
• Distribution of that same approved version to all intended recipients
• A clear audit trail

That’s why most compliant firms use a system (like ProFundCom) that separates data, template, and distribution, ensuring each step has its own review and audit checkpoint.

4. What we recommend

If you need automation, the safest method is:

• Generate a static, compliance-approved version of the content
• Lock the data
• Then automate distribution, not composition

This protects you, protects your investors, and keeps you aligned with the SEC Marketing Rule.