How to Prepare for the SEC's 2026 Exam Priorities
The SEC’s 2026 Examination Priorities arrive in a deregulatory environment, but that does not mean that firms can relax. It's quite the opposite: The priorities signal a renewed emphasis on fundamentals, paired with heightened scrutiny of emerging risks that directly affect retail investors.
Drawing on my experience leading what is now known as the Division of Examinations at the Securities and Exchange Commission and later serving in a senior capacity at the Financial Industry Regulatory Authority, I see three core themes that advisors must internalize this year: Get the basics right, prepare for the continued “retailization” of complex products, and strengthen governance around technology, cybersecurity and artificial intelligence.
Firms that treat them as business imperatives will be better positioned for both exams and long-term success.
Fundamentals Are Back and Matter More Than Ever
A defining feature of the 2026 priorities is a clear return to the essentials of an effective compliance program. Examiners are focused on whether firms can demonstrate that their policies and procedures actually work in practice.
This includes long-standing areas of concern: fiduciary duty, conflicts of interest, best execution, valuation, fees and expenses, marketing and the accuracy of disclosures. As expectations around evidence and documentation continue to rise, advisors should be prepared to show — not just say — how conflicts are identified, mitigated and disclosed; how investment recommendations align with client objectives; and how periodic reviews are conducted, documented and issues remediated.
Importantly, the SEC has made clear that exam scope will continue to be risk-based. Even if certain asset classes or strategies are not highlighted as standalone priorities, they remain very much in play depending on a firm’s business model. In other words, there is no safe harbor for firms that assume that silence equals safety.
Retail Access to Alternatives Raises the Stakes
One of the most consequential developments shaping the 2026 priorities is the expansion of retail access to alternative and complex investments. Regulatory and policy initiatives have expanded access to products such as interval funds, tender offer funds, business development companies, private credit strategies and, increasingly, digital asset exposure.
While this SEC is enabling broader retail access to alternative investments in line with President Donald Trump's executive order, the agency is also focused on whether advisors and distributors are conducting effective due diligence on the products that they offer, disclose risks effectively, market appropriately, and ensure that recommendations are suitable and in clients’ best interests — particularly for older investors and those saving for retirement.
For firms accustomed to operating solely in institutional or private markets, this shift can be jarring. The standards applied in the retail context are exacting, and disclosure gaps (especially around fees, valuation and liquidity) can quickly become exam findings.
The takeaway is simple. Expanding access to complex products requires a corresponding evolution in compliance infrastructure to support investor protection and regulatory readiness. That includes tighter coordination among investment, distribution, compliance and risk teams, coupled with a disciplined approach to documenting how products are approved, monitored and explained to investors.
Cybersecurity and AI Are Core Exam Issues
Cybersecurity has been a regulatory priority for years, but the 2026 exam priorities underscore that it remains a top-tier concern — particularly as it intersects with investor data protection, third-party risk and operational resiliency. Recent updates to Regulation S-P and continued focus on identity theft prevention mean that firms must be able to demonstrate not only that they have policies in place, but also that those policies are tested, maintained and integrated into daily operations.
Equally significant is the SEC’s growing focus on AI. The technology's adoption across the industry has accelerated rapidly, touching everything from investment research and marketing to surveillance and compliance. Regulators recognize the benefits but are also concerned about governance, transparency and control.
Firms should expect questions about acceptable use policies for AI, oversight structures, model testing and validation, data inputs and outputs, and the role of human review in AI-driven decisions. Examiners will also probe how AI risks intersect with cybersecurity, privacy and vendor management. In short, firms should expect the SEC to take an active interest in how AI tools are being used and how firms are managing the risks of this emerging technology.
Practical Path Forward
The 2026 priorities may feel demanding but also present an opportunity. The SEC has signaled a preference for resolving issues through the exam process where possible, reserving enforcement for clear cases of investor harm or fraud. That makes proactive engagement, transparency, effective compliance and strong governance more important than ever.
Advisors and wealth managers should use this moment to step back and ask two critical questions:
Can we clearly explain, document and defend how our firm operates across compliance, technology and client service?
Is our compliance program effectively incorporating technology and managed services to ensure a robust and scalable operating model?
If the answers are anything less than an unqualified yes, now is the time to act.
The firms that will succeed in 2026 are those that view technology-enabled compliance as a strategic capability — one that supports growth, protects investors and builds trust in an increasingly complex market.
