The SEC has long been wary of fund managers providing hypothetical, extracted and predecessor performance in advertisements out of concern of their potential to mislead prospective investors. Many fund managers have exacerbated that risk by deploying calculation processes rife with operational shortcomings, including vague disclosures and inadequate policies and procedures. Although amendments to Rule 206(4)‑1 under the Investment Advisers Act of 1940 (Marketing Rule) open the door to potentially increased use of non-standard performance calculations, they also forebode greater SEC scrutiny. In light of that, managers need to upgrade their recordkeeping and disclosure practices to reflect the framework contained in the Marketing Rule, as well as to satisfy the SEC’s accompanying principles-based guidance. This second article in a three-part series delves into common recordkeeping and disclosure deficiencies in the creation of non-standard track records and strategies for overcoming those deficiencies. The first article explored common process deficiencies, including widespread shortcomings in managers’ policies and procedures. The third article will discuss how sponsors can discover operational deficiencies in their performance calculations, how long it can take to upgrade those controls, the associated costs and the effect the Marketing Rule will have on internal controls. See “Fund Managers Must Refrain From Combining Actual and Hypothetical Performance Results to Avoid Misleading Investors and Avert SEC Enforcement Action” (Feb. 11, 2016); and “Under What Conditions Can a Fund Manager Present Hypothetical Backtested Performance Results?” (Feb. 1, 2013).