In some cases, investment advisers may seek to present “hypothetical performance,” i.e., performance of a strategy that was not actually achieved by any client of the adviser. While this information can be helpful to certain investors, the United States Securities and Exchange Commission (“SEC”) has long viewed hypothetical performance skeptically; however, amendments to the rules governing the adviser advertising have set forth specific conditions under which advisers can now show hypothetical performance. This article outlines the new SEC requirements, discusses some of the policy rationale behind the rules, and offers some observations for advisers to consider when assessing their own use of hypothetical performance.