SEC Spotlights Alts and Retail Risks in Exam Priorities
The Securities and Exchange Commission’s recently released 2026 examination priorities highlight the agency’s concerns around alternative investments for retail investors.
Exam priorities also include investment advisors’ “adherence to fiduciary standards of conduct,” third-party vendor risks, and impending Regulation S-P requirements stemming from 2024 amendments to the privacy rule.
The list of priorities is shorter than in previous years, industry consultants noted, and the Division of Examinations acknowledged staffing shortages and growing market complexity.
New operational risks appear in this year’s priorities, with the SEC specifically calling out business practices that permit third-party access to client accounts and emphasizing the need to safeguard client assets and information, said Lori Weston, head of compliance at STP Investment Services.
“While advisors often consider vendor access, they may overlook intermediary credential-sharing platforms that rely on actual client login credentials,” Weston said. “These platforms can present even greater vulnerabilities, exposing client information and potentially enabling unauthorized access to accounts or assets.”
Read more from Lori and other experts on Ignites.
