Published on Oct 7th, 2025 |

Essential Year-End Compliance Considerations for RIAs and RICs

Vigilant Insights

Introduction

As 2025 enters its final quarter, Registered Investment Advisers (“RIAs”) and Registered Funds (“RICs”) face an evolving regulatory environment and important registration thresholds that take effect based on year-end assets under management (“AUM”).

The months leading up to December 31, 2025, represent an important time for Firms to assess compliance readiness, confirm accurate reporting, and address potential regulatory triggers, particularly those tied to SEC registration requirements.

Proactive preparation can help firms avoid last-minute challenges and ensure a smooth transition into 2026 with confidence and regulatory clarity.

EOY 2025 Key Compliance Considerations

EOY 2025 Key Compliance Considerations

1. Annual Compliance Review Preparation

  • As 2025 concludes, Firms should start getting their 206(4)-7 Annual Review Report in place. This includes evaluating the effectiveness of current policies, testing results, and any compliance incidents or operational changes that occurred during the year. The review should be fully documented and reflect meaningful testing outcomes.

2. Form ADV and Disclosure Accuracy

  • Firms should review Form ADV Parts 1 and 2 for accuracy, consistency, and timeliness. Any changes to business practices, fee structures, or conflicts of interest must be promptly disclosed. Ensuring alignment between the ADV, client communications, and marketing materials is essential to maintaining transparency and regulatory confidence.

3. SEC Examination Readiness

  • While there is currently a Government Shutdown, it is still crucial to install SEC Examination Preparation for your team. The SEC’s Division of Examinations continues to prioritize areas such as fees and expenses, conflicts of interest, valuation, and adherence to the Marketing Rule. Firms should ensure their compliance programs are operationally effective and properly documented. Conducting Mock Exams or internal compliance reviews can help identify weaknesses before they appear in an actual exam.

4. Marketing Rule Compliance

  • The SEC’s Marketing Rule remains a focal point of examination and enforcement activity. RIAs should review all marketing materials, particularly performance data, hypothetical performance, and third-party ratings to be sure they comply with regulatory requirements. Substantiation for claims must be well-documented, and disclosures should be clear, fair, and not misleading.

5. Cybersecurity and Data Protection

  • Firms should confirm that their incident response, vendor oversight, and risk governance frameworks are well-established. On-going testing, staff training, and documentation of cybersecurity policies remain key examination priorities.

6. Recordkeeping and Retention

  • The SEC has repeatedly identified books and records violations as a common deficiency. Firms must ensure that all business-related communications, particularly through modern messaging platforms, are properly archived in accordance with Rule 204-2 under the Advisers Act.

Registration AUM Thresholds and SEC Registration Triggers

Registration AUM Thresholds and SEC Registration Triggers

The end of the calendar year (December 31, 2025) is a critical measurement date for determining whether certain Wealth Managers and Private Fund Managers are required to register with the SEC.

For Wealth Managers:

  • Firms with $100 Million or more in regulatory AUM may elect to register with the SEC.
  • Firms with $110 Million or more in regulatory AUM are required to register with the SEC by March 31, 2026.
    • Advisers should carefully calculate their year-end AUM based on the Form ADV instructions and confirm whether they meet or exceed these thresholds. Those below $100 million generally remain under state registration requirements unless specific exemptions apply.

For Private Fund Managers (Currently Operating as Exempt Reporting Advisers “ERAs”):

  • If a Private Fund Manager’s regulatory AUM exceeds $150 million as of December 31, 2025, the firm must register with the SEC as a Registered Investment Adviser.
    • Registration should be completed by March 31, 2026, and firms should plan accordingly, as transitioning from ERA to RIA status involves additional disclosures, policies, and compliance infrastructure.
    • To prepare, Firms should conduct a year-end AUM review well before December 31 to anticipate any registration changes, build appropriate compliance systems, and engage a Compliance Firm like Vigilant to be sure all filings and procedures align with SEC requirements.

Vigilant's Conclusion

How Vigilant Can Help

Vigilant partners with RIAs and RICs to navigate complex SEC regulations with precision and confidence. Our team has extensive experience supporting Firms in meeting their compliance obligations, including annual review processes, examination preparation, registration readiness, and much more.

Vigilant offers comprehensive services such as:

  • Annual Compliance Program Reviews tailored to Firm operations and risk exposure.
  • Mock Exams and readiness assessments.
  • Marketing Rule Compliance Reviews for all materials and advertisements.
  • Form ADV and Disclosure accuracy reviews to ensure regulatory alignment.
  • Cybersecurity framework evaluations and establishment/enhancement of policies and procedures.
  • SEC Registration transition support for Wealth and Private Fund Managers.

As the year draws to a close, a proactive approach to compliance not only mitigates regulatory risk but strengthens investor trust and operational resilience.

Vigilant stands ready to guide Firms through the complexities of the SEC regulatory landscape helping them end 2025 prepared, compliant, and positioned for success in 2026 and beyond.

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