Treichel in Rethinking65: The SEC Is Watching Your AI Use — Is Your Firm Ready?

Originally published in Rethinking65 on July 17, 2026.

The word (or acronym) on everyone’s lips these days is AI.

In the financial services industry, AI-focused apps are quickly becoming must-haves for notetaking, meeting summarization, back-office tasks and even portfolio management. While these tools can help firms operate  more efficiently, the murky regulatory environment has often left advisors treating compliance as an afterthought. This is a mistake.

The federal government has yet to issue AI-specific regulations. However, that doesn’t mean it’s not on the minds of regulators.  The Security and Exchange Commission’s 2026 Fiscal Year Examinations Priorities report, from the SEC’s Division of Examinations, states that, for AI usage, it is applying existing rules (from the Investment Company Act of 1940) around the fiduciary standard, marketing, recordkeeping and supervisory procedures.

“With respect to AI, the Division will focus on recent advancements in AI and will review for accuracy [of] registrant representations regarding their AI capabilities or AI. The Division will assess whether firms have implemented adequate policies and procedures to monitor and/or supervise their use of AI technologies, including for tasks related to fraud prevention and detection, back-office operations, anti-money laundering (AML), and trading functions, as applicable,” the report says.

The bottom line: The SEC is really concerned about advisory firms that don’t properly disclose their use of AI.