Data Notice: Regulatory guidance cited in this article reflects the SEC’s published FY 2026 examination priorities. Regulations evolve; verify current requirements with your compliance officer or legal counsel.

This content is informational only and does not constitute legal or financial advice. Consult a qualified professional for guidance specific to your situation.

SEC 2026 Exam Priorities: What Financial Advisers Need to Know

The SEC Division of Examinations released its FY 2026 priorities in late 2025, and the message to registered investment advisers (RIAs) is clear: fiduciary conduct, AI oversight, and cybersecurity sit at the top of the agenda. Whether you run a solo practice or manage billions through a multi-office firm, these priorities will shape what examiners look for when they knock on your door.

This guide breaks down the key focus areas, explains what they mean for day-to-day advisory operations, and outlines steps advisers can take now to prepare. For a broader look at fiduciary obligations, see our guide to fiduciary duty.

Fiduciary Conduct Remains Priority One

The Division continues to place fiduciary duty at the center of every examination. Under the Advisers Act, all registered investment advisers owe clients duties of care and loyalty. In 2026, examiners will pay particular attention to:

• Conflict identification and disclosure. The SEC expects advisers to proactively identify conflicts of interest — including those related to compensation arrangements, affiliated products, and revenue-sharing agreements — and disclose them in plain language on Form ADV Part 2A. According to Harvard Law School Forum on Corporate Governance, the Division is examining whether disclosures are specific enough for clients to make informed decisions, rather than relying on boilerplate language.

• Best execution. Examiners will evaluate whether advisers are seeking the most favorable terms for client trades, considering factors beyond commission cost — including execution speed, settlement reliability, and overall transaction cost.

• Fee calculation accuracy. Billing errors remain one of the most common examination findings. The Division will review whether fees charged match the fee schedule disclosed in advisory agreements and ADV filings.

If you are still building your compliance framework, our guide to choosing a financial adviser covers what clients should expect from a fiduciary — and that checklist mirrors what examiners look for.

AI Washing: The New Frontier of Enforcement

For the first time, “AI washing” has emerged as a distinct examination focus. The SEC defines AI washing as firms making misleading claims about their use of artificial intelligence in the investment process. Plante Moran reports that examiners will:

1. Review marketing materials for accuracy in AI-related claims. If your website says “AI-driven portfolio optimization,” examiners want to see the technology that supports that statement.

2. Evaluate operational reality. Does the firm actually use AI in the manner described to clients? Or is “AI” a marketing label applied to basic algorithmic rebalancing?

3. Assess policies and procedures. Firms using AI — whether for investment decisions, client communications, or compliance monitoring — need written policies governing acceptable use, data privacy, and human oversight.

The practical implication is straightforward: if you market AI capabilities, document them thoroughly. If you do not use AI, do not claim that you do.

Cybersecurity and Operational Resiliency

Cybersecurity has appeared in SEC exam priorities for several years, but the 2026 emphasis intensifies the focus on two areas:

• AI-related cyber risks. Firms deploying AI tools face new attack surfaces — model manipulation, data poisoning, and unauthorized access to training data. The SEC expects firms to identify these risks in their cybersecurity assessments.

• Incident response preparedness. Examiners will evaluate whether firms have tested their incident response plans, not merely whether a plan exists on paper. Tabletop exercises and documented response drills demonstrate readiness.

• Vendor management. Third-party technology providers — including cloud storage, portfolio management software, and AI tool vendors — must be subject to due diligence and ongoing monitoring.

For advisers managing retirement accounts, our retirement planning guide discusses the importance of working with firms that take data security seriously.

Emerging Technology and Automated Tools

Beyond AI washing, the SEC will examine firms using automated investment tools — robo-advisers and algorithm-driven portfolio construction — to verify that:

• Algorithms produce recommendations consistent with the client’s stated investment objectives and risk tolerance.
• Disclosures adequately explain how automated tools work, what their limitations are, and when human oversight applies.
• Rebalancing algorithms do not generate excessive trading that benefits the firm through additional fees.

What Advisers Should Do Now

The SEC’s 2026 priorities are not a surprise to well-prepared firms. They represent an evolution of themes the Division has emphasized for several years. Here are practical steps:

1. Audit your ADV disclosures. Review Part 2A for specificity in conflict disclosures. Replace generic language with descriptions of actual conflicts.

2. Review AI marketing claims. If any marketing material references AI, machine learning, or algorithmic investing, verify that the claims are accurate and documented.

3. Update cybersecurity policies. Incorporate AI-specific risks into your cybersecurity risk assessment. Schedule incident response drills.

4. Document everything. Examiners rely on documentation. If a process is not documented, it effectively does not exist for examination purposes.

5. Engage compliance counsel. A mock examination or compliance review can identify gaps before the SEC does. Our tax planning strategies guide covers why professional guidance matters across regulatory and financial decisions.

The Bigger Picture

The SEC’s 2026 priorities reflect a regulator adapting to a rapidly changing industry. The rise of AI in wealth management, the proliferation of automated tools, and the evolving cybersecurity landscape mean that compliance is no longer a static checkbox exercise. Advisers who treat compliance as an ongoing, dynamic process — rather than an annual review — will be best positioned to navigate examinations and serve clients well.

Sources

1. SEC Division of Examinations Announces 2026 Priorities — accessed March 26, 2026
2. 2026 SEC Exam Priorities and Implications for Investment Advisers — Harvard Law School Forum — accessed March 26, 2026
3. Navigating SEC’s 2026 Examination Priorities — Plante Moran — accessed March 26, 2026