Having reviewed dozens of newsletters written by investment advisors in recent months I have one observation that has nothing to do with compliance: Investment advisors appear to believe that it is wise to avoid making political statements in those newsletters. Whether clients reside in red or blue states, their money is still green, and most firms are happy to manage the funds of individuals who hold different political views.

Shut your pie hole about politics

I heartily agree with this sentiment. To paraphrase a memorable quote from a former president, read my lips: Keep your political opinions to yourself. There is no compelling reason for advisers to alienate a significant portion of their client base, as well as prospects who may wish to hire the firm.

Most investment advisory newsletters are intended primarily to educate the firm’s clients and keep them informed about the current economic climate. In most cases, these newsletters are sent to prospective clients or posted on the advisor’s website to attract prospects. I can’t see any good reason for advisors to offend current or prospective clients who might feel strongly about a different candidate. Most of these advisors realize that discussing politics with a client or prospect may cause hard feelings.

Focus on the problems — not their creators

The advisory newsletters I’ve reviewed discuss the impact of congressional gridlock without blaming one party or another. The advisors also managed to discuss hot-button topics without injecting their opinions. A recent newsletter analyzed the Patient Protection and Affordable Care Act of 2010 without taking sides. The advisor also explained the so-called “Taxmaggedon” and the impending “fiscal cliff” without blaming any particular party or candidate.

As the election draws closer, I’m sure we will see many more newsletters predicting how certain types of investments and strategies will perform in various political scenarios. And once the ballots are counted in November, advisors will analyze how the new political climate will affect the stock market and their investment strategies. I anticipate that just about every advisor will avoid stating how they’re happy a particular candidate won or lost.

You don’t get a vote when it comes to compliance

Since I can’t go seven paragraphs without discussing compliance, it is important to mention that advisors should not pat themselves on the back in newsletters if their predictions come to pass. Examiners may suspect that the advisor is highlighting accurate predictions that make the firm look good, while glossing over ones that look silly in retrospect. It will look very suspicious if the firm takes down the newsletter in which the advisor predicted the market would soar or plummet if a particular candidate won and those predictions fizzled. See: Advisor newsletters: Compliance-wise, all news may not be fit to print.

In addition, advisors should keep in mind that they must avoid referring to their firms’ performance and past specific recommendations in newsletters unless they are prepared to jump through a few compliance hoops. Furthermore, these publications should include disclosures to ensure that none of the content is false or misleading.

Remember, too, that content in newsletters may become misleading as it ages. Therefore, advisors’ chief compliance officers should regularly review newsletters and other content on their websites to determine if any information has become stale and misleading. CCOs should document these reviews, including which newsletters were taken off their websites and why. There should be policies and procedures in place requiring periodic website reviews to ensure that all of the content continues to be compliant. See: Lost in limbo: How and why compliance officers can seem to thwart RIA marketing efforts.

Cats v. dogs

If advisors do make their political preferences known in newsletters, they face one more risk. They might offend the regulator reviewing the publication if that person has different political opinions.

I vote for a safer approach. In recent months, I have noticed that a few advisors are including pictures of their dogs in their firms’ newsletters. That’s usually a safe way to go unless, of course, the client or prospect is a cat person.

Les Abromovitz, an attorney, can be reached at National Compliance Services, Inc. by calling 561-330-7645, Ext. 213, or by e-mailing him at labromovitz@ncsonline.com. Les is the author of “The Investment Advisor’s Compliance Guide,” which was published in March 2012 by the National Underwriter Co., a division of Summit Business Media. The book is availablehere.