Gifts and entertainment policy for investment advisers

No SEC rule sets a dollar limit on the gifts and entertainment an investment adviser's people may give or receive. The obligation comes from the adviser's fiduciary duty: a gift that could incline the firm, consciously or unconsciously, to put someone else's interest ahead of a client's is a conflict that must be eliminated or fully and fairly disclosed. Most firms meet it with a written policy that sets limits, requires approval above them, and logs what was given and received.

Other rules apply alongside, depending on who is involved: FINRA's gift rule for anyone who is also a registered representative, the Marketing Rule for gifts to people who refer clients, ERISA and Department of Labor reporting for union and plan relationships, and pay-to-play and state ethics laws for government officials.

Where the obligation comes from

• Section 206 and the fiduciary duty. In its 2019 interpretation (Release IA-5248), the Commission said an adviser must eliminate, or at least expose through full and fair disclosure, all conflicts of interest that might incline it to give advice that is not disinterested. Tickets from a broker the firm routes trades to, or a trip paid by a fund sponsor whose products the firm recommends, are conflicts of exactly that kind.
• Rule 206(4)-7. An SEC-registered adviser must have written policies reasonably designed to prevent violations of the Advisers Act. A firm whose people regularly receive gifts from counterparties needs a policy that addresses it.
• Rule 204A-1. The code of ethics must set a standard of business conduct reflecting the firm's fiduciary obligations. When the Commission adopted the rule in 2004 (Release IA-2256), it listed limits on accepting gifts among the provisions advisers should consider including in their codes.

Because the duty comes from Section 206, it applies to state-registered advisers too. State rules may add requirements of their own, so a state-registered firm should check its state's rules.

The conflicts to look for

Gifts and entertainment received

• From brokers. An adviser that selects brokers owes clients a duty to seek best execution. Gifts and entertainment from a broker can bias that choice, and an examiner reviewing broker selection can ask what the firm received from the brokers it uses.
• From fund sponsors, product providers and custodians. Form ADV Part 2A Item 14.A requires the firm to describe any arrangement under which someone who is not a client gives it an economic benefit for providing advice to clients, including sales awards and other prizes, and to explain the conflict and how it is addressed. Part 2B Item 5 asks the same of each supervised person.
• From vendors and service providers, where the firm is choosing on the client's behalf or paying with client money.

Gifts and entertainment given

• To clients and prospects. Generally permitted, but large or frequent gifts to some clients and not others can raise questions of fair treatment.
• To people who refer clients. See the Marketing Rule section below.
• To consultants and gatekeepers who advise institutions on hiring managers.
• To government officials and public plan staff, which runs into pay-to-play and state ethics laws.
• To union officials and plan trustees, which can trigger Department of Labor reporting.

Gifts to people who refer clients

Under the Marketing Rule, Rule 206(4)-1, a statement that refers or solicits a client is a testimonial (if made by a current client) or an endorsement (if made by anyone else), and the rule's compensation provisions cover cash and non-cash compensation. Gifts, dinners and tickets given to a referral source in return for referrals count.

Compensation of $1,000 or less (or the equivalent in non-cash compensation) during the preceding 12 months is de minimis. A de minimis testimonial or endorsement is excused from the written agreement requirement and the disqualification provisions. It is not excused from the required disclosures, including that compensation was provided. Track what each referral source receives, so the firm knows when it crosses the threshold.

Dual registrants and FINRA Rule 3220

FINRA Rule 3220 limits anything of value that a FINRA member or its associated persons give to an employee, agent or representative of another person in relation to the business of the recipient's employer, and requires the member to keep a record of those gifts. The SEC approved an increase in the limit on 12 February 2026 (Exchange Act Release 104830), and since 30 March 2026 the limit is $300 per person per year, up from $100. FINRA's Regulatory Notice 26-05 also says:

• a gift given during a business entertainment event counts toward the limit, though the cost of the entertainment itself does not
• de minimis and promotional items must be valued substantially below the $300 limit
• personal, bereavement and de minimis gifts that are excluded from the rule are also excluded from its recordkeeping requirements

The rule binds broker-dealers and their associated persons, so it applies to an investment adviser representative who is also a registered representative. An RIA with no broker-dealer is not subject to it, but some set their own limits by reference to it, and a dually registered firm needs one policy that satisfies both. If your policy pegs its limit to FINRA's, check that it now says $300.

ERISA plans and unions

Advisers who are ERISA fiduciaries

ERISA section 406(b)(3) prohibits a fiduciary of a plan from receiving any consideration for its own personal account from any party dealing with the plan in connection with a transaction involving plan assets. An adviser that is a fiduciary to an ERISA plan has to treat gifts and entertainment from brokers and vendors who deal with the plan as more than a conflict to disclose.

Gifts to union officials and union-affiliated plans

The Department of Labor's Office of Labor-Management Standards requires certain employers to report payments to unions and union officials on Form LM-10. Its FAQ says that a vendor of financial services to a union-affiliated pension plan that gives a union trustee a gift worth more than $250 must file. Under the FAQ:

• gifts with an aggregate value of $250 or less from one employer to one union or union official in a fiscal year are treated as insubstantial and need not be reported
• gifts valued at $20 or less need not be counted toward the $250
• all expenses in a single fiscal year to a single union official are combined

A firm that advises Taft-Hartley plans, or wants to, should log every gift and meal for trustees and union staff by recipient and fiscal year.

Government officials

A gift is not a political contribution under Rule 206(4)-5 unless it is made to influence an election, pay campaign debt, or fund transition or inaugural expenses. But the rule also prohibits doing indirectly what would violate it if done directly, and state and local ethics laws often limit or prohibit gifts to public employees and officials, including pension staff. Those laws vary and can be stricter than any firm policy. Check the law that applies to each government client before anything is given. See the pay-to-play guide for the contribution rules.

What a working policy includes

1. Definitions. What counts as a gift and what counts as entertainment. One workable line: an event is entertainment if the person providing it attends, and a gift if they do not.
2. Limits on value per gift and per recipient or giver per year, set by the firm. Lower limits, or a ban, for anyone with a duty to choose brokers or vendors.
3. Prohibited items, decided by the firm. Cash and cash equivalents are a common example.
4. Preapproval above the limit, and for any gift to a government official, union official, plan trustee or referral source.
5. A log of gifts and entertainment given and received: date, giver, recipient, business relationship, description and estimated value, and the approval where one was needed.
6. Special rules for ERISA plan clients, union relationships and government clients, cross-referenced to the rules above.
7. Reporting deadlines for staff, such as within a set number of days of receipt, so the log is complete.
8. Annual attestation that the person has reported everything, kept with the code of ethics acknowledgments.
9. Review in the annual compliance review under Rule 206(4)-7: compare the log with expense reports, broker lists and the brochure.

The records

No paragraph of Rule 204-2 names a gifts log. But an SEC-registered adviser must keep its compliance policies under Rule 204-2(a)(17)(i), and if the gifts policy is part of the code of ethics, a record of each violation and the action taken under Rule 204-2(a)(12)(ii). Records supporting the non-client benefits described in Item 14 of the brochure, and the referral compensation records for the Marketing Rule, should match the log.

What examiners look for

An examiner can test a gifts program from the documents above:

• a policy that exists, with no log, or a log with no entries in a firm that clearly entertains
• gifts from brokers the firm uses that never came up in its best execution review
• economic benefits from product sponsors that are not described in Item 14 of the brochure
• referral sources receiving gifts with no Marketing Rule disclosure
• expense reports showing entertainment that never reached the log

Common questions

Is there an SEC gift limit for investment advisers?

No. The SEC has not set a dollar limit for advisers. Each firm sets its own limits in a written policy, and the fiduciary duty requires it to identify and address the conflicts that gifts create.

Do RIAs have to follow FINRA's $300 gift limit?

Only people subject to FINRA rules: broker-dealers and their associated persons, including dually registered representatives. FINRA Rule 3220's limit has been $300 per person per year since 30 March 2026. An RIA with no broker-dealer is not bound by it, although it can use it as a reference point.

Does an RIA have to keep a gifts and entertainment log?

The books and records rule does not name one. In practice a log is how a firm shows that its policy works, and it is the evidence behind the conflict disclosures in its brochure.

Are gifts to union pension plan trustees reportable?

They can be. The Department of Labor's Form LM-10 FAQ says a financial services vendor to a union-affiliated pension plan that gives a union trustee a gift worth more than $250 must file. Gifts of $20 or less are not counted, and gifts to one official in a fiscal year are combined.

Can an adviser give gifts to clients who refer business?

Yes, but a gift given in return for a referral is compensation under the Marketing Rule. Up to $1,000 in the preceding 12 months is de minimis and needs no written agreement, but the referral still needs the required disclosures.

Start from a template

Luna's code of ethics template includes a gifts and entertainment section with a log, and the marketing policy template covers compensated referrals under the Marketing Rule. For the rest of the code, see the code of ethics requirements guide.