Learn how Series 31 tests promotional material, standardized sales presentations, third-party content, reprints, recordkeeping, past performance, hypothetical results, and supervisory review.
Promotional material is one of the highest-value Series 31 blocks. The exam wants you to know whether managed-futures communications are balanced, accurate, supervised, documented, and consistent with disclosure documents. It is not enough for a statement to be technically possible; it must not mislead the customer about risk, performance, fees, or strategy.
This topic is where sales enthusiasm often becomes a regulatory issue. Strong answers usually slow down and ask what the communication claims, what source supports it, and whether supervisory review is required.
| Item | What matters here |
|---|---|
| Weight | 16% |
| Main skill | evaluate whether managed-futures promotional material is fair, balanced, supervised, and properly supported |
| Typical trap | accepting impressive performance language without checking assumptions, source, or risk balance |
| Strongest first instinct | ask whether the communication could mislead a customer about performance, risk, fees, or strategy |
| Section | Main exam angle |
|---|---|
| Definition, scope, and standardized sales presentations | what counts as promotional material |
| Third-party firms, reprints, and source control | source reliability and responsibility |
| Promotional-material recordkeeping and written procedures | supervision evidence |
| Past performance presentation standards | fair context and non-misleading performance use |
| Hypothetical results and supervisory review | assumption limits and review discipline |
Series 31 is testing whether you can supervise and evaluate managed-futures sales communications. Performance claims, hypothetical results, third-party material, and standardized presentations can all influence customers. The exam expects controls around that influence.
Promotional material includes more than glossy brochures. Standardized presentations and customer-facing materials can be promotional if they are used to solicit or influence customers. The first step is recognizing when the rule set applies.
Third-party material and reprints can still create responsibility issues. A firm cannot avoid concern simply because the original words came from someone else. Source, context, and how the material is used all matter.
Records and procedures show that communications are controlled. If a firm cannot produce what was used, who reviewed it, or how it was approved, the problem is supervision, not just paperwork.
Past performance can be useful, but it can also mislead. Strong answers check whether performance is presented with proper context, fees, risk, drawdowns, and limitations. A performance number without context is usually suspect.
Hypothetical results are especially sensitive because they can look more precise or reliable than they are. The strongest answer usually requires clear assumptions, limitations, and supervisory review before use.
| If the stem shows… | Stronger implication |
|---|---|
| third-party material reused in solicitation | source and supervisory responsibility still matter |
| past performance highlighted | context, risk, fees, and limitations must be clear |
| hypothetical results | assumptions and review become critical |
| missing records | supervision and procedures are weak |
| standardized sales deck | treat it as promotional material if used to solicit |
A representative wants to use a third-party article showing strong hypothetical returns for a managed-futures strategy, with little discussion of assumptions or risks. What is the strongest supervisory response?
Answer: B
Series 31 promotional-material questions focus on customer protection and supervision. Third-party source status does not remove the need for review, context, and records.