The SEC’s Division of Examinations released its fiscal year 2027 examination priorities on October 23, 2026, outlining where examiners expect to focus their attention. For investment advisers and broker-dealers, the report combines familiar concerns with more specific scrutiny of emerging threats, compensation arrangements, and supervisory practices.

The priorities do not create new requirements. They help firms understand where examiners may look when assessing compliance with existing obligations.

What Changed From 2026?

Cybersecurity, emerging technology, private credit, AML, and Regulation S-P were already priorities in 2026. This year’s report introduces additional examples and more detailed examination targets.

For adviser and broker-dealer compliance teams, the following five areas deserve particular attention.

1. Conflicts of Interest and Complex Investments

Examiners will review whether firms recommend investments that fit their clients’ needs and whether compensation or other financial incentives influence those recommendations.

Areas of focus include:

  • Fees and financial incentives: Are clients charged correctly, and are arrangements that could influence advice clearly disclosed and appropriately addressed?
  • Higher-risk investments: Do firms understand the risks, costs, and withdrawal restrictions of complicated investments or those that may be difficult to sell?
  • Account recommendations: Do recommendations to open accounts, move investments, or roll over retirement savings serve the client’s interests, particularly for older or vulnerable investors?

For private fund advisers, examiners will also review how borrowing, fees, and the use of related service providers affect investors, including whether those risks and costs are clearly explained.

Compliance teams can assess whether their investment reviews and disclosures give employees and clients a clear understanding of the products offered and the conflicts involved.

2. Compliance Programs That Keep Pace with Growth

The Division will continue reviewing whether compliance policies are implemented and whether annual reviews meaningfully assess program effectiveness.

The 2027 report gives particular attention to advisers that have expanded through acquisitions, added services or asset classes, or operate across geographically dispersed branches. Examiners will assess whether those changes prompted appropriate updates to compliance programs and conflict management.

The dedicated supervision section also emphasizes:

  • Supervisory systems and procedures covering new activities and products.
  • Qualified individuals with authority to carry out supervisory responsibilities.
  • Internal controls designed to support compliance across the business.

For firms that have grown or changed, this is an opportunity to check whether supervisory coverage, assigned responsibilities, and procedures still reflect how the firm operates.

3. Emerging Technology and Digital Fraud

Technology oversight remains a priority, with more specific attention to how advanced tools affect operations and expose firms to fraud.

The report identifies phishing messages and synthetic or deepfake voices and videos as threats that can support social engineering. Examiners will also review monitoring of advanced technologies used in fraud detection, back-office operations, AML, Reg BI compliance, and trading.

Reviews of automated investment tools will consider whether:

  • Representations about the tools are fair and accurate.
  • Actual operations and controls align with investor disclosures.
  • Algorithms produce recommendations consistent with investor profiles or stated strategies.

For compliance teams, the practical question is whether oversight addresses both the tools employees use and the ways outside actors may use technology to deceive them.

4. Customer Information and Incident Response

Regulation S-P remains an examination priority, with the 2027 report emphasizing implemented safeguards, incident response procedures, customer notification, and oversight of service providers.

Broader cybersecurity reviews will cover governance, access controls, data loss prevention, account management, and recovery from incidents such as ransomware attacks.

Under Regulation S-ID, examiners will assess whether Identity Theft Prevention Programs address emerging risks, including stolen credentials and technology-enabled fraud.

Firms can prepare by reviewing how their procedures connect across:

  • Detection and escalation of suspicious access or activity.
  • Incident response and customer notification.
  • Vendor oversight and protection of customer information.

These reviews should help establish whether employees understand their responsibilities and whether the firm can put its written procedures into practice.

5. AML Controls and Cross-Border Risks

AML remains a priority, with expanded detail on risks involving foreign omnibus accounts and underlying customers whose identities may be obscured by nested account relationships.

The Division will review whether broker-dealers:

  • Update AML programs for their business model, risks, and significant growth.
  • Conduct adequate independent testing and ongoing customer due diligence.
  • Meet Suspicious Activity Report obligations.
  • Address potential manipulation involving foreign-based companies.

What Compliance Teams Can Do Now

Use the priorities to guide a focused review of the risks relevant to your firm:

  • Identify changes: Map new products, services, technology, and growth against existing controls.
  • Test implementation: Confirm procedures are followed and deficiencies receive documented follow-up.
  • Refresh training: Address the conflicts, fraud scenarios, and supervisory responsibilities employees encounter.

The report is not an exhaustive examination checklist. Firms should use it alongside their own risk assessments to identify where additional testing, clearer procedures, or updated training may be needed.