On June 9, 2026, the SEC Division of Examinations issued a Risk Alert on investment adviser economic conflicts of interest. It is not about exotic misconduct. It is about the ordinary, structural incentives that sit inside almost every advisory business — which cash sweep you use, which share class you pick, which account type you recommend, how you get paid — and whether your clients can actually understand them from your disclosures.
The alert is grounded in the adviser’s fiduciary duty under the Investment Advisers Act and in the Compliance Rule, Rule 206(4)-7. That framing matters: the staff is not announcing a new rule. It is telling you how examiners will read the rules you already live under, and where firms keep falling short.
Disclosed is not the same as adequately disclosed
Across examinations, the staff observed conflicts that were undisclosed, only partially disclosed, or described in language that could mislead clients and undermine informed consent. The throughline is the same one that ran through the SEC’s FY2025 enforcement results: a conflict can be mentioned in your Form ADV and still be a violation if a reasonable client could not understand the incentive and its significance from what you wrote.
The cash-sweep example examiners called out
The most concrete example in the alert involves cash management. Staff observed advisers whose only cash-sweep recommendation was a higher-cost money market fund that paid the adviser revenue sharing — without disclosing that lower-cost, higher-yielding share classes of the same fund existed that did not pay the adviser. That is the pattern to internalize: the conflict is not that you earn revenue; it is that the client was steered to the option that pays you without being told a cheaper, better-yielding version was available.
Other areas the staff flagged
Beyond cash sweep, the alert points to other revenue opportunities that were not surfaced, Form ADV disclosures that did not keep pace with how the firm actually earned money, advisory fees that deviated from the fee schedule in the client agreement, and compliance programs that were not designed to identify and address these conflicts as the business changed. Conflicts tied to account-type recommendations, custodial arrangements, and fee structures are all in scope.
What the Division expects
The staff reminded advisers to do three things: adopt adequate written policies, procedures, and full-and-fair disclosures addressing economic conflicts; actually implement and monitor them; and keep identifying and addressing new conflicts as the firm evolves. Deficiencies in this area can lead to remediation, client reimbursement, and, in serious cases, referral to the Division of Enforcement.
What to check this month
Start with cash: list every sweep and money-market option you recommend, confirm whether you receive revenue sharing on any of them, and check whether lower-cost or higher-yielding share classes exist that you are not using or disclosing. Then reconcile your Form ADV Part 2A against how the firm is actually compensated today — not how it was compensated when the brochure was last rewritten. Finally, pull a sample of client invoices and confirm the fees charged match the fee schedule in the signed agreement. Each of those is a place the alert says examiners are looking.
None of this requires waiting for a new rule. Economic conflicts of interest are a 2026 SEC examination priority, and this alert is the roadmap for how that priority gets applied. The firms that fare best will be the ones whose disclosures let a client understand not just that a conflict exists, but why it matters to the recommendation in front of them. (All dates and provisions described here are as of June 18, 2026.)