Compliance Solutions for Investment Advisers

No Surprise Exams for Most SEC Advisers

Most of the investment advisers registered with the SEC who maintain custody of their clients’ investment funds aren’t subject to surprise annual examinations, according to a new federal report.

A study released last Monday by the Government Accountability Office found that, as of April 1, 4,446 of the 9,982 SEC-registered advisers had control over client money, amounting to more than $14 trillion in client assets.

Of those who had custody, 1,321 were subject to annual surprise examinations by independent public accountants. A total of 2,956 advisers with custody don’t have to undergo surprise exams.