A projected return can make an investment sound straightforward. The presentation shows an attractive percentage, explains how the strategy is supposed to work, and gives the investor a number to remember.

Before relying on that number, ask a more important question: What has to happen for the investment to deliver it?

On October 15, 2026, the Securities and Exchange Commission approved changes to FINRA Rule 2210 that permit projected performance and targeted returns in certain broker-dealer communications, subject to conditions. The approval is not a blanket authorization to advertise speculative returns to everyone. (FINRA)

For investors, the practical issue is how to evaluate the explanation behind the figure.

What the Approved Changes Require

The approved framework calls for firms using these communications to:

  • Implement written policies and procedures addressing the relevance of the communication to the intended audience’s likely financial situation and investment objectives.
  • Provide sufficient information to understand the criteria and assumptions behind the projection.
  • Explain the risks and limitations of using the figures to make investment decisions.
  • Retain information concerning the source of the projection or targeted return.

The rule also continues to require fair and balanced communications and prohibits materially misleading statements and omissions. Permission to present a projection does not eliminate those standards. (FINRA) (SEC)

Approval and implementation are separate questions. This article discusses the approved framework, not an independently confirmed effective date. Firms should verify FINRA’s implementation instructions before relying on the new exception. (FINRA rule filing and status materials)

This Is Not an Open Invitation to Market Projections to Everyone

The intended audience matters.

The SEC’s approval order explains that the framework generally would not permit projected performance in communications intended for a mass audience or general retail circulation. Distribution should reflect a reasonable belief that the intended audience has the resources and financial expertise to understand the risks and limitations. An investor’s interest in high returns alone does not establish that the presentation is appropriate. (SEC)

If you receive a projection, consider asking the firm to explain why that presentation is appropriate for your circumstances.

Start With the Assumptions, Not the Percentage

When reviewing an investment pitch, ask for an explanation of the events needed to produce the stated result.

For example, consider a hypothetical private real estate investment targeting a 10% annual return. Before relying on the target, ask:

  • Does the calculation depend on selling the property at a particular price?
  • Does it assume a refinancing will be available?
  • What occupancy and rental-income assumptions are being used?
  • What happens if expenses increase?
  • How would a delayed sale affect the result?

This example does not describe a particular offering or predict its performance. It illustrates the questions we suggest asking before treating a target as a planning assumption.

A useful follow-up is: Show me what the investment looks like if the main assumption does not work out.

Ask Whether Fees Are Included

Do not leave the treatment of fees to inference. Ask whether the projected return is before or after commissions, management fees, fund expenses, and other applicable charges.

FINRA investor education materials explain that fees and expenses affect an investment’s overall return. Review the disclosure documents and ask the investment professional to explain the charges.

For your own review, request a written answer to these questions:

  • Which expenses are included in the figure?
  • Which expenses are excluded?
  • Are there additional costs to purchase, hold, or exit the investment?
  • How is the person recommending it compensated?
  • Where can you find that information in the governing documents?

Keep the response with the original presentation.

Compare the Sales Conversation With the Written Materials

Before committing money, put the presentation, offering documents, and your notes from the sales conversation side by side.

Mark anything you do not understand or that appears inconsistent. In particular, identify statements about:

  • Expected income.
  • Protection of principal.
  • Access to your money.
  • The timing of distributions.
  • The conditions needed to achieve the target.
  • What could cause a loss.

Then ask the advisor to address those points in writing.

These are suggested review steps, not a statement that every investment presentation must follow a single format.

What If the Investment Falls Short?

For a legal review, focus on more than the difference between the projected and actual return. Ask counsel to examine what was represented, what supported the presentation, what risks were disclosed, and how the recommendation related to your circumstances.

Preserve the records rather than relying only on the investment’s current value.

Useful documents include:

  • The original presentation, including its date and version.
  • Offering memoranda, subscription agreements, and account agreements.
  • Emails and text messages discussing expected results.
  • Written explanations of assumptions and fees.
  • Account statements and distribution records.
  • Communications explaining changes, delays, or losses.

Prepare a short timeline showing what you received, what you understood, and when you invested.

FINRA identifies arbitration and mediation as potential avenues for disputes involving brokerage firms and their brokers. It also cautions that recovering investment losses can be difficult and take time. (FINRA)

Discuss Substantial Investment Losses With Sonn Law Group

If you experienced substantial losses after relying on an investment presentation, contact Sonn Law Group to discuss your circumstances.

Ask for an assessment of the sales materials, supporting documents, potential responsibility, applicable deadlines, and practical recovery considerations.

The starting point should be the evidence behind the recommendation, not simply the percentage printed on the page.

This article provides general information, not legal or investment advice. A projected return is not a promise of recovery or investment performance. Potential claims depend on the facts and applicable law. No recovery is guaranteed.