On November 17, 2025, the Division of Examinations (“Division”) of the U.S. Securities and Exchange Commission (“SEC” or “Commission”) published its annual examination priorities for the new fiscal year. For those working or providing services in the retirement space, key takeaways include:
- The Division places a high degree of importance on the protection of retail investors, especially older investors and those saving for retirement;
- investment advisers can expect to be examined regarding their adherence to the duty of care and loyalty in connection with retirement investors, especially as it relates to the identification, disclosure and mitigation of conflicts of interest, and the basis for recommendations;
- broker-dealers can expect their sales practices to be examined, including for rollover or other recommendations made to older investors and those saving for retirement as part of the broker-dealer’s Care Obligation;
- there will be a focus on dual registrants (i.e., both a broker-dealer and investment adviser status) and firms’ processes identifying and mitigating the resulting financial or other conflicts of interest;
- the Division will continue to prioritize examinations of registered investment companies due to their importance to those saving for retirement;
- for both broker-dealers and investment advisers, there will be a focus on investment products or strategies, including alternative investments, that may have complexity related to liquidity, fee structures, benchmarking, and investor suitability;
- firms will need to have controls in place to confirm that advice or recommendations resulting from AI tools are consistent with obligations to investors, including retail and older investors; and
- crypto assets is no longer a stand-alone exam priority, but firms are still subject to the attendant duty of care, including when dealing with retirement assets.
Investment Advisers and Investment Companies
The Division will prioritize investment advisers’ adherence to their duty of care and loyalty obligations, particularly regarding aspects of their business that serve retail customers. The Division will review investment advice and disclosures provided to clients for consistency with advisers’ fiduciary obligations, including the impact of advisers’ financial conflicts of interest on providing impartial advice, consideration of the various factors associated with their investment advice (cost, investment product or objectives, product features and characteristics, risks and potential benefits), and best execution obligations.
Consistent with the recent activity and prioritization of access to alternative investments for retail investors, the Division noted that it will focus on (1) alternative investments; (2) complex investments; and (3) products that have higher costs associated with investing.
As in the past, the Division will focus also on particular types of advisers and advisory services or business practices that may create additional risks and potential or actual conflicts of interest, including advisers that are dually registered as broker-dealers, particularly where such advisers have advisory representatives who are also dually licensed as registered representatives and receive compensation or incentives that may create conflicts of interest. In a change from last year, the Division specified the additional risks and potential conflicts that may arise when advisers utilize third-parties to access clients’ accounts, and where advisers that have merged or consolidated with, or been acquired by, existing advisory practices.
While a perennial inclusion in the priorities, firms should note the Division’s focus on the effectiveness of advisers’ compliance programs, and whether programs are reasonably designed to address conflicts of interest, comply with the Investment Advisers Act of 1940, and prevent advisers from placing their interests ahead of clients’ interests.
Due to their importance to retail investors, the Division will prioritize examinations of registered investment companies (“RICs”), including compliance programs, disclosures, filings, and governance practices. This Division has expressed a particular interest in RICs that participate in mergers or similar transactions, that use complex strategies and/or have significant holdings of less liquid or illiquid investments, and RICs with novel strategies or investments. RICs can also anticipate review of portfolio management practices and disclosures, including consistency between statements and practices, and compliance with the “Names Rule” after the compliance date.
Broker-Dealers
In addition to standard reviews of financial responsibility rules and trading related practices and services, the Division will focus on broker-dealer sales practices, including compliance with Regulation Best Interest. The Division is going to focus on sales practices, including those related to: (1) recommendations with regard to products and investment strategies (including account and rollover recommendations); (2) conflict identification and mitigation practices, in particular with respect to recommendations of accounts, rollovers, and recommendations involving limited product menus; (3) processes for reviewing reasonably available alternatives; and (4) processes for satisfying the Care Obligation.
In particular (and substantively the same as the 2025 priorities), the Division will focus on those recommended products that are complex, illiquid, or present higher risk to investors. What is notable is that the Division, as compared to the 2025 priorities, has added more specificity to this concern by referencing particular products subject to examination. Firms should also expect the review of recommendations that: (1) move an investment to a substantially similar product; (2) relate to opening different account types, and (3) are made to older investors and those saving for retirement or college. As with advisers, the Division will also focus on dual registrants and their processes for identifying, mitigating and eliminating financial or other conflicts of interest. Firms can also expect that their relationship summary (“Form CRS”) will be reviewed for accuracy and completeness.
Other Take-Aways
For information security and operational resiliency, the Division will focus on cybersecurity, as well as firms’ compliance with Regulation S-ID and Regulation S-P. The focus on cybersecurity practices will be on firms’ policies and procedures pertaining to governance practices, data loss prevention, access controls, account management, and responses and recovery to cyber-related incidents, including those related to ransomware attacks.
For Regulation S-ID, if applicable, the Division will focus on firms’ development and implementation of a written Identity Theft Program. For Regulation S-P, the compliance dates for the recent amendments is December 3, 2025 for larger entities and June 3, 2026 for all others. Firms should anticipate the Division will engage firms during examinations about their progress in preparing incident response programs as required, and whether firms have developed, implemented, and maintained policies and procedures in accordance with the rule’s new provisions after the applicable compliance date.
Not unexpectedly, the Division called out AI technologies as part of its focus on emerging technologies and alternative sources of data, and expressed its intent to examine the controls of firms that engage in activities such as automated investment advisory services, recommendations, and related tools and methods.
Unlike 2025, crypto assets are not discussed as a standalone examination priority for 2026. This is not particularly surprising given the Commission’s stated revised approach to crypto assets. However, firms should be mindful of the Division’s 2025 exam priority on whether firms meet their respective standards of conduct when recommending or advising customers regarding crypto assets, especially for investments involving retirement assets.
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