Compliance and Risk Trends for Financial Advisors in 2026

Failing to meet compliance guidelines can be costly for your business. The SEC has the authority to impose fines on broker-dealers and investment advisors who fail to comply with recordkeeping rules and other compliance requirements. Your brand reputation may also suffer, potentially costing you clients. It can be challenging for busy advisors to keep up with the constant changes to regulatory guidelines, but monitoring compliance trends can help you stay ahead of the curve. The compliance trends below are some of the ones that are most likely to be top of mind for regulators in the months and even years to come.

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1. Recordkeeping

The SEC is taking steps to crack down on advisory firms and broker-dealers that fail to meet recordkeeping compliance standards. In January 2025, the regulatory agency fined 12 firms more than $63 million for recordkeeping failures. ¹ Some of the most significant allegations involved:

• Use of unapproved (off-channel) communication methods, including text messages, to discuss business operations and proposed investment advice
• Failure to maintain records of these communications
• Failure to reasonably supervise personnel to prevent recordkeeping violations

Each firm involved was ordered to cease and desist from future violations of relevant recordkeeping rules. Firms included in the round-up were also censured. 

What It Means for Advisors

Advisors should be aware that the SEC is scrutinizing firms to ensure that records are properly maintained, and the case cited above may be just the start. Reviewing your recordkeeping policies and procedures, particularly when it comes to electronic communication, as well as your framework for addressing potential issues, can help you reduce the risk of a noncompliance violation.

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2. Pay to Play

The SEC’s pay-to-play rule, Rule 206(4)-5, prohibits registered investment advisors (RIAs) from providing their services to government entities for money if they’ve made a campaign contribution within the previous two years. 

In April 2024, the SEC charged one RIA with pay-to-play rule violations, resulting in a $60,000 penalty. An employee of the firm in question was found to have contributed $4,000 to a state government official’s political campaign. The official was in a position to influence the selection of investment advisors for the state’s board of investment. ²

What It Means for Advisors

Advisors should review their internal policies regarding political campaign contributions, as the SEC may be inclined to increase audit activity surrounding these contributions leading up to an election period.  All employees should be familiar with your firm’s written compliance policy surrounding contributions. Should you become aware of a possible violation, it’s important to take steps to mitigate it as quickly as possible.

3. Cybersecurity

Cyber security is a hot topic in compliance circles, as the threat of cyber attacks continues to loom over the financial services industry. As compliance trends go, advisors should be aware of how the SEC and other regulatory agencies are taking steps to minimize the potential risk to both firms and investors.

Some of the most recent updates center on reporting. The SEC issued a new rule ³ requiring firms to:

• Disclose cybersecurity incidents on Form 8-K within four business days (for domestic registrants)
• Make an annual disclosure of cyber security risk management, strategy and governance using Form 10-K (for domestic registrants)

Foreign private issues (FPIs) must be reported using Form 6-K and Form 20-F, respectively.

Cybersecurity was a key concern on the SEC’s 2025 list of exam priorities and also earned a spot on the 2026 list. ⁴ Specifically, the focus is on ensuring compliance with:

• Cybersecurity policies and procedures pertaining to governance practices, data loss prevention, access controls, and account management
• Response and recovery to cybersecurity-related incidents
• Deployment of training and security controls to mitigate cybersecurity risks associated with AI

Operational resiliency, within the context of cybersecurity, is also top of mind for the SEC’s Division of Examinations. 

What It Means for Advisors

Advisors should consider reviewing their firm’s cyber security policies, including security measures and reporting procedures. It’s also important to review the SEC’s updated cyber security rules to ensure that you are not only reporting incidents promptly but also providing all the necessary information required by the updated regulations.

4. Artificial Intelligence

Artificial intelligence is reshaping the financial services landscape in a multitude of ways. Some advisors have embraced it, others remain skeptical. While the SEC has not issued any firm rules regarding its use as of yet, it is giving AI more attention. 

For example, the SEC’s 2026 exam priorities specifies a focus on:

• Reviewing registrant claims regarding AI capabilities or AI use for accuracy
• Assessing whether firms are implementing adequate policies and procedures to monitor/supervise AI technology use
• Review firm integration of regulatory technology to automate internal processes and optimize efficiency

Of particular concern to the SEC is the use of AI tech tools for core tasks, such as fraud prevention and detection, back-office operations, trading functions and in connection with anti-money laundering (AML) rules. 

What It Means for Advisors

If your firm is experimenting with AI tools or considering them, you should be aware that the SEC has expressed an interest in how they’re used. The biggest challenge for advisors is ensuring that any AI applications or software they’re using are trained to detect biases that could create skewed predictions that favor the firm, rather than the client.

5. Anti-Money Laundering Regulations

A new FinCEN (Financial Crimes Enforcement Network) final rule, which was set to take effect Jan. 1, 2026, includes certain investment advisers under the “financial institutions” umbrella for the purpose of enforcing key provisions of the Bank Secrecy Act. ⁵ The final rule would impose minimum anti-money laundering and counter-terrorism financing standards on select investment advisors.

Implementation of the rule has been delayed until 2028, which allows affected advisors more time to prepare for compliance. The rule excludes:

• RIAs that register with the SEC solely because they’re mid-sized advisors
• Multi-state advisers
• Pension consultants
• RIAs that do not report any assets under management (AUM) on Form ADV

What It Means for Advisors

If your firm is subject to the updated rulemaking you’ll need to consider what that means for your compliance program. Affected advisors are required to develop a comprehensive AML/CFT program, establish policies and procedures to monitor for suspicious transaction activity, conduct client risk assessments and report all suspicious transactions to FinCEN. 

6. Cryptocurrency

Cryptocurrency regulatory efforts advanced in 2025 across various channels. Some of the measures introduced include:

• Withdrawal of prior SEC/FINRA guidance limiting broker-dealers’ ability to custody digital assets
• Passage of the GENIUS Act, which is designed to create a regulatory framework for stablecoins
• Introduction of the CLARITY Act, which aims to define which agency/agencies have authority to regulate digital commodities
• SEC approval of state trust companies acting as qualified custodians for digital assets and the IRS have all taken an interest in how cryptocurrency should be regulated.

These changes reflect a broader shift in the SEC’s perspective on cryptocurrency, and a reversal of the heavy regulation approach advanced under the Biden administration.Additionally, advisors should know what securities laws may apply when advising on initial coin offerings (ICOs).

What It Means for Advisors

Advisors should be attuned to how the SEC is expanding regulation to make cryptocurrency more accessible to a broader base of investors. From a compliance standpoint, advisors must understand what choices they have when custodying digital assets. Future regulatory updates may bring new reporting and/or disclosure requirements as well. 

7. Fiduciary Conduct

Fiduciary conduct and advisor behavior is a chief concern in the 2026 examination priorities. The SEC is taking a marked interest in ensuring that advisors consistently uphold their fiduciary obligations. Special attention is being given to:

• Alternative and complex investments, such as private credit and inverse ETFs
• Investment recommendations that target particular investor segments, including older investors and retirement savers

The SEC is also concerned with firms it deems to be a higher compliance risk, such dual-registered advisors, advisors who use third-parties to access client accounts and advisors that have merged or consolidated with, or been acquired by, existing practices. 

What It Means for Advisors

Advisors who follow a fiduciary code of conduct can expect to be under closer scrutiny, particularly if you work with third-party vendors to manage operations. You may need to review your compliance program to ensure that any vendors you work with are observing industry-standard best practices to preserve and protect client data. 

8. Compliance Programs

RIAs are required to have a compliance program and the SEC is putting the effectiveness of those programs in the spotlight for 2026. The focus on effectiveness extends to every area of compliance in your business, from portfolio management to disclosure requirements to marketing.

The SEC’s exam priorities stress the importance of two things: implementation and enforcement. In other words, it’s not enough to have a compliance program in place; you must also ensure that it’s working properly.   

What It Means for Advisors

Increased interest in the effectiveness of compliance programs is a good reason to review your current policies and procedures. Reviewing your disclosures, updating Form ADV in a timely manner and identifying and addressing conflicts of interest may be on your priority list. .

Bottom Line

Compliance trends may come and go, but the more you pay attention to current SEC rulings and other news, the easier it may be to adapt as new regulations come along. These trends are not the only issues the SEC and other rulemaking bodies are paying attention to for 2025, but they are among the most notable. There will be many more as the year develops, especially with a new administration taking over the government.

Tips for Growing Your Advisory Business

• Compliance extends to every aspect of your business, including how you market your services. If you’re looking for a way to simplify your marketing while remaining compliant, you might consider partnering with a platform like SmartAsset AMP. This innovative service helps you connect with leads and nurture relationships automatically while leaving you free to focus on other aspects of running your business. Schedule a free demo to learn how you can use it to grow your client list.
• Broker-dealers and RIAs are required to have a chief compliance officer (CCO), though it’s up to you to decide who fills this role. You might handle the responsibilities yourself in the initial stages of growing your business, and decide to hire a full-time or part-time CCO consultant later. Investing in compliance software can make it easier for whoever acts as your firm’s CCO to do their job.

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