The ability to use hypothetical performance under the SEC’s revised Advertising Rule (Marketing Rule) – Rule 206(4)‑1 under the Investment Advisers Act of 1940 – can occasionally feel like fool’s gold for fund managers. Although hypothetical performance is permitted under the Marketing Rule, the requirements, exceptions and practical difficulties surroundings its use, even a full year after the rule’s compliance date, remain prohibitively risky and daunting for many fund managers wary of garnering SEC scrutiny. To assist advisers with navigating the Marketing Rule, K&L Gates and the CFA Institute hosted a webinar – and attendant Q&A session – that was moderated by Krista Harvey (director) and Karyn D. Vincent (senior head) from CFA Institute, and featured K&L Gates partners Lance C. Dial and Pamela A. Grossetti. This second article in a two-part series details the hypothetical performance standard under the Marketing Rule and confusion that continues to surround the topic. The first article evaluated the fundamental definitions of advertisement and performance, along with some of the gray areas fund managers confront when attempting to comply. See “Impact of the New Marketing Rule: What Constitutes an ‘Advertisement’ and How to Adhere to Principles‑Based Standards (Part One of Two)” (Mar. 23, 2021).