What NASAA's Exam Data Shows
Many state-registered investment advisers who are examined are seeing a state examiner for the first time, or for the first time in years. In NASAA's 2025 coordinated examinations, state regulators completed 1,086 examinations. For 33.6 percent of the advisers examined, it was their first state examination, and 18.1 percent had last been examined more than five years earlier.
Exam Counts Over Time
The overall number of exams has not trended upward. NASAA's coordinated exam reports show 1,078 examinations in 2019, 1,206 in 2021, 683 in 2023 and 1,086 in 2025. What the data does show is that a firm that has never been examined, or has not been examined in years, should not assume it will avoid examination indefinitely.
Coordinated Examination Programs
NASAA's coordinated examinations are a periodic sweep in which participating state regulators examine advisers using a common examination framework, and NASAA publishes the combined findings. In 2025, the most frequent deficiency categories were books and records (21 percent of deficiencies), registration (17 percent), contracts (17 percent), supervision and compliance (15 percent) and fees (9 percent).
Examination Focus Areas and Trends
Beyond those categories, advisers should assess their programs against the areas examiners routinely review: compliance program adequacy, including whether firms have written policies and conduct annual reviews; Form ADV accuracy and timeliness; advertising and marketing compliance; custody and safeguarding of client assets; fee disclosure and billing practices; cybersecurity preparedness; and business continuity planning. Firms should address any gaps before receiving an examination notice.
Preparation and Record Organization
Preparation strategies for state examinations should begin long before an examination is announced. The most effective preparation is maintaining an ongoing state of examination readiness, which means keeping all regulatory filings current, maintaining organized and accessible books and records, conducting annual compliance reviews with documented findings and remediation, and regularly testing the firm's compliance policies against actual practice. Firms that treat examination preparation as a continuous process rather than a reactive scramble consistently receive better examination outcomes.
Responding to Deficiency Letters
Deficiency trends identified through state examinations provide a roadmap of the areas where firms most frequently fall short. Recurring deficiency categories include incomplete or outdated Form ADV disclosures, lack of documented annual compliance reviews, advertising materials that have not been reviewed or archived, inadequate code of ethics implementation, gaps in client file documentation, and cybersecurity programs that do not meet current standards. These trends are remarkably consistent across states and across examination cycles, suggesting that many firms continue to struggle with the same fundamental compliance requirements.
Staying Examination-Ready
Because so many examined advisers are seeing an examiner for the first time, or the first time in years, steady examination readiness matters more than a last-minute scramble. Compliance Approved helps advisers maintain examination readiness through a regulatory calendar for filing deadlines, annual review testing checklists, an examination readiness view that checks whether the firm could answer a typical request list, and a central place to organize the books, records, and documentation that examiners request. Our goal is to make the examination experience a confirmation of the firm's strong compliance posture rather than a source of anxiety and remediation costs.