SEC 2027 exams test RIA fee conflicts and product fit

SEC examiners will spend the next year testing whether fee rebates, cash management, quid pro quo arrangements and deposit or withdrawal terms tilted the advice RIAs gave clients.

Fiduciary duty, conflicts of interest and compliance-program effectiveness again lead the fiscal 2027 exam priorities, according to the Division of Examinations. The division published the list Friday. The technology language also shifted, from artificial intelligence to “super intelligence,” or SI, now listed among the areas of high importance.

Examiners will check whether a product's liquidity, volatility, projected performance across market conditions, time horizon and costs, including exit costs, fit the client's profile and objectives. That checklist reaches alternatives and structured products in model lineups, and it asks the firm to show its reasoning rather than the product's label.

The conflicts work builds on a June 9 risk alert in which staff said advisers failed to disclose conflicts or disclosed them incompletely or misleadingly.

The division named loans by private funds or business development companies, option-based funds, inverse and single-stock ETFs, and ETFs built on less-liquid assets. Products that are hard to trade or carry unusual features will get extra attention.

That scrutiny arrives as the commission is also widening retail access to alternatives through recent proposals on interval funds and performance fees.

Advisers going through change appear on the list as a category: newly registered RIAs, firms that may be integrating into larger consolidators, firms that changed business models or added client types or asset classes, firms that grew through M&A, and firms operating across geographically dispersed branch offices.

For acquirers, that likely turns the integration record — which systems combined, how clients were repapered, which products stayed on the shelf — into an exam exhibit.