Four questions turn a performance claim into something checkable, and the first is which periods it covers. Under the SEC's marketing rule for investment advisers, rule 206(4)-1, an advertisement presenting performance for most portfolios has to show one-, five- and ten-year periods, each with equal prominence and each ending no less recent than the most recent calendar year-end. The rule was adopted in December 2020 and compliance has been required since 4 November 2022. A single six-month window meets none of that shape.

Ask which periods the number covers

The three required windows exist because one window can be chosen. A five-year record and a ten-year record either agree with the one-year figure or they do not, and the disagreement is the information. When a claim arrives with one start date and one end date, the question is what the same account did over the two longer windows ending at the last calendar year-end (SEC marketing rule guidance).

The second half of the question is the comparison. A claim measured against one index over one stretch and a different index over another is not one record, and putting two moves on the same dates and the same basis is what makes them comparable at all.

Ask whether the number is net of fees

The same rule answers this directly. When an adviser shows gross performance, the advertisement has to present net performance with at least equal prominence and in a format designed to make the two comparable (SEC marketing rule guidance). A number posted without its net counterpart is missing the half the rule treats as mandatory.

The gap is not small. FINRA's investor page on fees prices a fee of 1 percent a year, over 20 years, on a $100,000 investment earning 4 percent, at $28,000. That page also states that free trading does not mean free investing, and lists where the cost moves instead: interest income from margin loans, robo-advisory service fees, and commissions on options and other securities. Each of those runs between a gross result and the number that reaches the account.

A projection cannot serve as the evidence

When the claim comes from a brokerage firm, a rule already governs it. FINRA Rule 2210, whose content standards were last amended in 2019, requires communications to be fair and balanced and prohibits any false, exaggerated, unwarranted, promissory or misleading statement or claim. Paragraph (d)(1)(F) bars communications from predicting or projecting performance, with narrow exceptions for hypothetical illustrations of mathematical principles, investment analysis tools meeting Rule 2214, and price targets in research reports that carry a reasonable basis and the required disclosures.

So a forecast presented as proof is either one of those three exceptions or it comes from somebody the rule does not reach. Either way it is not a record of anything that happened.

Example: what "3x the index" was worth over a year

This example uses one real prospectus and its own published estimates. A post claims that a 3x fund delivers triple the index. The Direxion Daily S&P 500 Bull 3X ETF summary prospectus dated 27 February 2026 states that the fund seeks 300 percent of the daily performance of the index and does not seek that result over any period other than a trading day, then prints a table of estimated one-year outcomes.

At 25 percent index volatility, an index year of plus 10 percent estimates to 10.3 percent for the fund, not 30 percent. A flat index year, 0 percent, estimates to minus 17.1 percent. The same page records the index's annualized volatility at 16.96 percent for the five years ended 31 December 2025 and its annualized return over those five years at 14.42 percent, and states that an investor could lose the full principal value within a single day if the index falls more than 33 percent in one day.

Run the recovery arithmetic on the flat-index case. A 17.1 percent fall leaves 82.9 percent of the starting value, and getting back to 100 takes a 20.6 percent gain from there, because 100 divided by 82.9 is 1.206. The multiple in the name describes one trading day. The question to ask a 3x claim is the holding period, and the same asymmetry applies to every percentage loss and the gain it needs.

The fourth question is who is making the claim. A BrokerCheck report covers anyone registered in the past 10 years, carries 10 years of employment history as reported on their last Form U4, and draws on the Central Registration Depository. Search that record from the regulator's own address rather than a link in the message, because the registration check and the identity check are separate.

Source references

Primary sources used for this guide. Follow the links for the original scope, definitions and conditions.