The SEC’s Division of Examinations released its Exam Priorities for 2026 on November 17th, offering critical insight into the areas that are most likely to shape examinations in the year ahead. For Compliance Officers at RIAs and Broker-Dealers, this document serves not as a “gotcha” mechanism, as SEC Chairman Paul Atkins noted, but as a practical guide for focusing compliance resources where they matter most.
Below is a summary of the key themes and what they mean for wealth management firms preparing for 2026 exams.
1. Top Exam Priorities for 2026
As expected, Regulation Best Interest and fiduciary duties once again lead the list of exam priorities. The SEC is particularly focused on firms’ ability to identify when advisors place clients into investment products with:
Complex or unusual features
Liquidity constraints or lock-ups
Significant sensitivity to market volatility
Higher commissions or expenses than comparable options
Alternative investments, including private credit and private funds, received explicit attention, along with ETPs and ETFs that use leveraged, inverse, option-based, or otherwise illiquid strategies.
The SEC further emphasized that investment recommendations and rebalancing decisions must be grounded in a complete understanding of each client’s investment objectives, risk tolerance, and financial and personal circumstances, reinforcing the central role of comprehensive KYC data in suitability and best-interest determinations.
Recommendations to older investors and those saving for retirement remain a major area of regulatory interest.
Action to take: Confirm that client KYC data is current and complete, and that written compliance procedures clearly direct advisors to incorporate investment objectives, risk tolerance, and personal and financial circumstances into all recommendations and rebalancing decisions, particularly for complex, high-cost, or illiquid investments and for senior or elderly clients.
2. Heightened Scrutiny for Merged or Acquired Firms
The SEC directly called out advisory firms undergoing acquisitions, mergers, or consolidations as posing elevated compliance and oversight risks. These events should trigger an immediate full review and update of compliance manuals, supervisory procedures, and firm-wide policies.Action to take: Ensure documentation reflects new leadership, operational structures, and supervisory responsibilities.
3. Product Complexity and Oversight of Registered Representatives
For Broker-Dealers, examiners will pay particular attention to recommendations involving:
Variable annuities and registered index-linked annuities
Private placements and structured products
Municipal securities and 529 plans
ETFs investing in private equity or private credit
Products with complex fee structures or exotic benchmarks
Oversight of Registered Representatives who recommend complex or tax-advantaged products is a main focus, as is monitoring for managed account churning or reverse churning.
Action to take: Document how your firm evaluates product complexity, aligns recommendations to client KYC profiles, and supervises representatives who recommend specialized investment products.
4. New and Newly Registered Advisors
The SEC highlighted increased attention on advisors who:
Have never been examined
Were recently registered
Are new to recommending private funds
These advisors must demonstrate familiarity with liquidity risk, valuation methods, fees, and disclosure obligations when recommending private funds or other complex vehicles.
Action to take: Develop and deliver tailored onboarding and training programs for all advisors who take on higher-risk product categories.
5. Evaluating Effectiveness
The SEC will continue its assessment of how well a firm’s compliance program is designed, implemented, and tested. Examinations will focus on:
Marketing and advertising materials
How private investments and alternatives receive valuation
Employee and advisor personal trading
Managed and fee-based accounts for excessive trading as well as undermanagement
Custody processes
Disclosures and regulatory filings
Annual compliance reviews
Action to take: Conduct a gap assessment against each area and refresh your annual review and documentation as needed.
6. Emerging Financial Technologies
The SEC flagged the growing use of robo-advisory tools, algorithmic trading, and artificial intelligence. Compliance teams are expected to document how these tools function, the risks they introduce, and the benefits they provide to clients.Action to take: Maintain transparent, written explanations of each technology, including data inputs, decision logic (as appropriate), oversight controls, and compliance review procedures.
7. Noticeably Absent This Year
Two notable omissions stood out:
Off-channel communications such as email and text messages were not highlighted, a sign that the regulatory temperature has cooled after several years of heightened focus.
Crypto assets received no mention amid a broader deregulatory shift. However, this does not signal the end of crypto oversight; formal rules are expected to be addressed separately.
For wealth management firms, understanding these priorities is the first step. The next step is proactively strengthening documentation, training, and oversight so you’re prepared long before an exam begins. For more details, we recommend reviewing the complete Exam Priorities document on the SEC’s website.
To see how SS&C Black Diamond Wealth Solutions can support your wealth management firm’s growth and complexity, request your personal demo, call 1-800-727-0605, or email info@sscblackdiamond.com today.
