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Ext. PublicationRIAs and Private Funds Under the SEC’s Examination Lens
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The SEC’s Division of Examinations has released its 2026 priorities, highlighting key areas of regulatory focus for the coming year. While applicable across registrants, the agenda offers targeted insight into how the SEC will assess Registered Investment Advisers (RIAs) managing private funds and alternative strategies.
Advisers must meet fiduciary duties under the Advisers Act, ensuring recommendations align with client objectives, risk tolerance and financial circumstances. They should consider costs, liquidity, volatility, time horizon and potential benefits; seek best execution and manage conflicts of interest. The SEC is prioritizing higher-risk products and practices, including private credit, private funds with long lockups, complex strategies and high-cost offerings. Examiners will review whether disclosures and product descriptions match actual operations and investor profiles.
Firms managing a mix of products such as separately managed accounts, registered funds and private vehicles will be assessed for how they allocate investment opportunities, treat clients and manage conflicts. Special attention will be given to newly registered advisers, those never examined and firms entering the private fund space for the first time in which compliance frameworks may still be maturing.
Compliance programs remain a central focus. Examiners will evaluate whether policies are tailored to the adviser’s business model, kept current and applied across core functions. These include marketing, valuation, trading, portfolio management, disclosure and custody. Reviews will assess how firms mitigate conflicts, disclose fees transparently and ensure programs are tested and enforced. The SEC will also examine how firms use regulatory technology to automate internal processes and strengthen oversight.
Artificial intelligence and emerging technologies are receiving increased scrutiny. The SEC will assess how firms use AI tools, automated platforms and trading algorithms, especially in client recommendations and advisory services. Reviews will evaluate whether representations are accurate, controls align with disclosures and outputs match investor profiles. Firms must supervise AI-driven tools used in fraud detection, anti-money laundering (AML), trading and operations, and ensure they are integrated into the compliance framework.
Cybersecurity and operational resilience continue to be high priorities. Advisers must safeguard critical systems and client data through access controls, data loss prevention and incident response planning. New requirements under Regulations S-P and S-ID mandate identity theft prevention, breach notification and technical safeguards. Examiners will also assess how firms address threats from ransomware, AI-enabled attacks and other emerging risks.
AML is embedded within the broader compliance review. For advisers qualifying under the Bank Secrecy Act, the SEC will assess whether AML programs are risk-based, updated, independently tested and include procedures for identifying beneficial owners and reporting suspicious activity. Oversight of intermediaries and sanctions compliance will also be reviewed.
The 2026 priorities reinforce that innovation does not exempt advisers from core responsibilities. RIAs managing private and alternative funds must provide suitable advice, maintain effective compliance programs, protect client data and manage financial crime risks. Examinations will focus on firms where these obligations are evolving, particularly emerging advisers, newly registered firms and those expanding into complex strategies.
Weaver’s dedicated Asset Management Consulting and Compliance Services practice supports advisers in navigating the evolving regulatory landscape. We’re here to help ensure your compliance program remains effective and adaptable with support for your policy review, testing, monitoring, communication and training. Contact us today.
©2025
