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I sat in on a Colorado Bar Association CLE session, “Inside the SEC: Examination and Enforcement Priorities for 2026,” featuring the SEC’s Denver Regional Office alongside the National Associate Directors of the SEC’s Investment Adviser/Investment Company and Broker-Dealer examination programs.

What follows is drawn from my own notes on the discussion, not an official SEC publication or the course materials themselves. But the themes are worth sharing, especially paired with the Division of Examinations’ recent Risk Alert on annual compliance reviews: together they paint a pretty clear picture of where scrutiny is headed.

1. Fiduciary Duty Is Still Priority #1, and “Set It and Forget It” Is The Problem

Fiduciary duty has been the SEC’s top examination priority for years, and that isn’t changing. The panel got specific about what “ongoing” fiduciary duty actually looks like:
  • which investments for which clients, and why: documented, not assumed
  • fees that are reasonable, disclosed, and authorized
  • disclosures that actually match practice, in both directions
  • conflicts of interest, Reg S-P, and marketing rule compliance
  • extra scrutiny on complex products sold to retail investors, with leveraged ETFs specifically being called out
  • a “buy and hold” approach to products meant to be monitored daily flagged as a problem, not a strategy
The panel was also direct about third-party service providers: examiners want to see the actual contracts, and using a vendor doesn’t transfer away the firm’s fiduciary duty for what that vendor does. The same logic extends to M&A. Both buyer and seller take on due diligence and disclosure obligations when client relationships change hands.

2. Private Credit Is The Next Flashpoint

With banking pulling back in some areas, trillions of dollars are moving into private credit, BDCs, and private funds, with much of it now reaching retail-adjacent investors. The concerns raised by the panel were straightforward: opaque valuations and whether investors actually understand what they’re holding. This is an area to watch closely if your firm touches private funds or BDCs at all.

3. AI Is Now Squarely On The SEC’s Radar, In Both Directions

On the firm side, examiners are asking:
  • Is the AI tool client-facing, or purely internal/back-office?
  • Is it giving investment advice? If so, full fiduciary obligations attach.
  • Who at the firm is monitoring its output?
  • Is it involved in portfolio construction? Same answer: fiduciary duty attaches.
  • Who is accountable when it’s wrong?
  • Are disclosures about AI use accurate, without overstating what it actually does?
  • Is there a deepfake/impersonation risk plan?
A firm can never blame AI. If AI makes a mistake, it’s still the firm’s responsibility to own and fix the mistake.
On the SEC’s own side: the agency is using AI internally for initial risk assessments across roughly 1,700+ RIA firms, supporting a staff of 400-500. That’s part of why exams are no longer run on a fixed cycle. They’re risk-based, and that risk scoring increasingly starts with a model, not a person.

4. Exam Priorities Come From More Places Than You’d Think

The panel walked through where risk signals actually originate:
  • bottom-up input from regional offices
  • previously-published priorities
  • Form ADV filings
  • prior exam history, especially unresolved items
  • tips, complaints, and referrals
  • emerging trends, like SPVs and pre-IPO investments
  • AI-driven predictive modeling
At the time of the panel, the 2027 priorities were expected in mid-October, tied to the SEC’s September 30 fiscal year-end. The Division published them on October 23, 2026.

5. How You Respond To A Deficiency Letter Matters As Much As What’s In It

  • State clearly whether you agree or disagree with each finding.
  • Respond to everything. Leaving items unaddressed was flagged as the single biggest pet peeve among examiners.
  • Include a corrective action with a timeframe for each item.
  • Include a plan to prevent the same issue from recurring.
  • If a corrective action is going to take longer than planned, say so proactively—otherwise, it can trigger a follow-up
  • Corrective Action Review (CAR) exam.
  • If you need an extension, ask for it early—asking late is itself treated as a red flag.
The panel was also clear that referrals to Enforcement are reserved for specific situations—fraud or investor harm, repeat conduct, a firm profiting at clients’ expense, or vulnerable victims—and they go through multiple layers of internal review first. Only a small share of exams are ever referred. Exam staff isn’t looking to play “gotcha”: firms are allowed to push back on unclear or overly-broad requests, and they can escalate concerns above an examiner’s level without penalty.
Don’t wait for an exam to get your house in order. A compliance program should be built to be robust and adaptive year-round, and the SEC’s own message was blunt on this point: it is a regulator, not a consultant. If you need ongoing compliance support, that relationship should exist before notice of an upcoming exam, not after it.

If you haven’t already, start with our Annual Review Self-Audit Checklist, built directly from the SEC’s own findings on where annual reviews fall short, including the corrective-action follow-through the panel emphasized here. If your review turns up gaps, reach out. This is exactly the kind of thing we help firms work through.

Frequently Asked Questions

What is the SEC’s top examination priority for investment advisers?
Fiduciary duty has remained the SEC’s top examination priority for years. Examiners are increasingly focused on whether firms treat it as an ongoing obligation, not a one-time check, covering investment selection, fees, disclosures, and conflicts of interest.

Is AI use by investment advisers on the SEC’s radar?
Yes. Examiners are asking whether a firm’s AI tools are client-facing or internal, whether they’re giving investment advice (which triggers full fiduciary obligations), who is monitoring their output, and who is accountable when they’re wrong. The SEC itself also uses AI internally to help with initial risk assessments across the RIA population.

What should be included in a response to an SEC deficiency letter?
A response should state clearly whether the firm agrees or disagrees with each finding, address every item raised, include a corrective action with a specific timeframe, and include a plan to prevent recurrence. Firms should proactively flag any delay in completing a corrective action, rather than waiting to be asked.

When are SEC exam findings referred to the Division of Enforcement?
Referrals are reserved for specific situations: fraud or investor harm, repeat conduct, a firm profiting at clients’ expense, or vulnerable victims. Referrals go through multiple layers of internal review, and only a small number of exams are ever referred.

This post reflects personal notes taken at a public CLE panel discussion and is offered for general informational purposes only. It is not an official SEC transcript or legal advice.

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