Securities Regulation Daily Wrap Up, SEC NEWS AND SPEECHES—Risk Alert addresses investment adviser disclosure of economic conflicts of interest, (Jun 10, 2026)

By R. Jason Howard, J.D.

Staff observations and examination findings have often led to the return of money owed to clients due to fee billing and calculation errors.

The SEC’s Division of Examinations has published a Risk Alert designed to assist investment advisers with developing effective compliance programs and disclosures with respect to economic conflicts of interest.

The SEC’s announcement explains that the Risk Alert “addresses observations made during review of the economic incentives that advisers and their financial professionals may have to recommend certain products, services, or account types to their clients.” The reviews include the investment advisers “written policies and procedures, disclosure of fees and expenses, and whether advisers are accurately calculating and charging clients advisory fees and expenses in accordance with client disclosures.”

The Risk Alert notes that, as fiduciaries, “investment advisers have an obligation to eliminate or at least to expose through full and fair disclosure, all conflicts of interest which might incline an investment adviser—consciously or unconsciously—to render advice which was not disinterested.” Staff observations from examinations of investment advisers revealed economic conflicts of interest that were undisclosed, or the disclosures were incomplete or misleading as well as investment adviser practices that were inconsistent with advisory agreements and disclosures and compliance programs that did not fully address economic conflicts of interest and risks.

The Division cautions that staff observations and examination findings have often led to the return of money owed to clients due to fee billing and calculation errors. As such, the Division encourages investment advisers to “review and refine, as appropriate, their billing policies, procedures, and practices on a routine basis with an eye towards ensuring they are accurate and consistent with disclosures and agreements.” Investment advisers should also identify and address new conflicts of interest in a timely manner, and the Division encourages that they “review their disclosures regarding their economic conflicts of interest to ensure that clients are provided with full and fair disclosure.”

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