The Financial Industry Regulatory Authority (FINRA) proposed expanding exceptions to its rule prohibiting advisors from forecasting future investment returns. 

The proposal, which now seeks approval from the Securities and Exchange Commission (SEC), faced rapid backlash from investor advocates. The proposed rule changes would permit advisors to present investment performance projections when marketing products, but exclusively when targeting institutional investors or "qualified purchasers" as defined by federal law—individuals with at least $5 million in investments.

Under its existing rules, advisors can incorporate projections in "hypothetical illustration of mathematical principles" and "investment analysis tools." The proposed change, characterized by FINRA as "narrowly tailored," would permit advisors to share more projected returns, but only in "specified scenarios," according to the regulator. 

According to AdvisorHub, investor advocates have raised objections to the proposal, including the potential to expose more clients to risks associated with private placement investments. 

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