As 2025 unfolds, RIA leaders must prepare for regulatory changes shaped by a new administration. Although the nominee for SEC Chair, Paul Atkins, signals a potential pivot toward deregulation and industry-friendly policies, I continue to encourage all my RIA clients to not let their guard down. Think of it as driving on an open highway with less traffic; it feels easier, but you still need to stay alert and follow rules to avoid a tragic accident.
While a new SEC leadership could mean less aggressive enforcement in certain areas, bipartisan issues like cybersecurity and anti-money laundering (AML) compliance will remain central priorities. Regardless of leadership, RIAs must be prepared to align with both evolving and enduring regulatory expectations.
Every time one of our clients asks how they should prepare for next year, we point to the SEC’s 2025 Examination Priorities, which emphasize several critical areas of compliance, rather than any speculations brewing from a potential Atkins confirmation.
Cybersecurity will continue to dominate as a priority, with the SEC requiring formal incident response plans, breach notifications, and third-party oversight to ensure investor data is secure. Similarly, AML compliance remains another cornerstone, as RIAs are expected to implement robust AML/CFT programs, perform ongoing customer due diligence, and report suspicious activity.
Marketing departments must also pay close attention as the SEC’s Marketing Rule is still very much relevant. Firms must ensure that performance claims, testimonials, and disclosures are accurate and transparent. Additionally, RIAs advising private funds will face enhanced disclosure requirements to improve transparency for investors.
Regulatory enforcement may soften in areas like ESG investing and marketing compliance and RIAs can seize this opportunity to adopt innovative practices. If firms remain vigilant of material accuracy and disclosure transparency, they could explore new approaches to digital marketing, which can help reach a wider range of possible clients. ESG investing will have a bigger focus next year with the likelihood of a lighter regulatory approach. The changes could reduce compliance burdens, allowing RIAs to align their practices with investor preferences and international standards. These shifts offer the chance to embrace innovation but just as you wouldn’t just speed up on an empty highway, I suggest staying alert to avoid sacrificing accountability or investor trust.
Emerging technologies, such as AI-driven advisory tools are here to stay and are presenting great opportunities but also many challenges. The SEC may favor principles-based guidance over prescriptive enforcement, giving firms the flexibility to integrate these tools responsibly. Firms must still be proactive in managing risks such as privacy, conflicts of interest, biases, and investor protection issues tied to AI. Compliance professionals should be prepared to rigorously assess AI tools by conducting regular audits for algorithmic bias or error, ensure proper disclosure of AI and data usage to investors, and implement robust policies to address potential conflicts arising from AI-driven recommendations. Privacy risks demand clear protocols for handling sensitive client data, while prioritizing investor protection requires that firms monitor the transparency and accuracy of AI outputs.
Relative to cryptocurrency, compliance teams should establish due diligence processes for vetting digital asset custodians, track evolving reporting requirements, and prepare policies for mitigating cybersecurity risks associated with blockchain transactions. When it comes to cryptocurrency regulation, the SEC could move toward clearer, if more permissive, frameworks under the new leadership, allowing RIAs to engage with blockchain and digital assets more confidently.
While the new administration might point to a lighter regulatory oversight, RIAs must remain focused on safeguarding their business by prioritizing compliance in areas like cybersecurity and AML programs, which remain bipartisan imperatives. Staying attuned to leadership changes and regulatory trends will enable firms to anticipate and adapt to shifts in enforcement priorities.
Additionally, maintaining a proactive approach to compliance, rooted in industry best practices, will help firms protect investor trust and foster long-term success. It is crucial for stakeholders to find a balance between regulatory adherence and innovation to effectively position themselves for growth. RIAs that are prepared and take the time to understand the SEC’s priorities for next year can overcome the uncertainty that comes with a new leader in the White House and beyond.
In 2025, adaptability will be what drives success for RIA compliance leaders. Additionally, proactive strategies will not only ensure compliance but also position firms for long-term success. If I was going to read the tea leaves for 2025 the emphasis is likely going to balance innovation-friendly oversight with the essential need to safeguard investor data and market integrity.
Kate Wulfken is the director of Compliance Risk Concepts, a provider of compliance consulting services to financial institutions.Her primary focus areas include, process implementation and enhancement, cybersecurity, marketing materials review, private equity investment compliance, and investment portfolio compliance. She also works in regulatory research, evaluated compliance programs, and performed annual reviews and risk assessments for investment advisors.
Meanwhile, Ameriprise has bolstered its own ranks as an LPL defector joins its branch channel in California.
The Fed chair's continued signals to delay policy easing sent 10-year yields higher, with money markets pricing in just one quarter-point cut this year.
Veris revealed a key promotion and its successful CIO transition, while $24.6 billion RIA Choreo taps a veteran leader for a newly created role.
The two hybrid RIAs have widened their respective footprints with acquisitions in Kentucky and Pennsylvania.
Valentine's Day is a big day for proposals. Advisors propose getting on the same page financially first.
From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.
Blue Vault features expert strategies to harness for maximum client advantage.