Wall Street’s watchdog has officially set its new year’s resolutions.

The Securities and Exchange Commission recently published its fiscal year 2027 examination priorities, which guide compliance reviews for its more than 34,000 registrants, including advisors, broker-dealers, investment companies, clearing agencies and more.

“This year’s examination priorities continue to underscore several longstanding areas of focus for registered investment advisors, particularly those involved with complex or higher-risk products,” said Erin Galipeau, special counsel in Seward & Kissel’s investment management group.

Not Dropping the Ball

When it comes to those complex products, the SEC calls out exchange-traded funds based on less liquid assets, single-stock ETFs, inverse ETFs, option-based funds and zero-days-to-expiration options as areas of attention, Galipeau noted.

While many of the investment advisor priorities, such as economic conflicts of interest and controls related to third-party service providers, are fairly consistent with last year’s list, there are some key takeaways to note:

• An important new priority is proxy voting and engagement, including an examination of advisors’ use of proxy advisory firms, said Sara Crovitz, partner and co-chair of the investment management department at Stradley Ronon. Examinations appear to have already included a module related to proxy voting recently, she said. Now, the priorities specifically reference ensuring that advisors with “activist engagement practices” are making timely and accurate filings.
• For investment companies, “an interesting but not unexpected focus relates to less liquid investments, including private credit and associated valuation issues,” Crovitz added.

Toasting Tomorrow’s Tech: Emerging technology including “super intelligence” (the name President Trump asked agencies to use for artificial intelligence) that may affect market operations, compliance, fraud prevention and investor protection will also be top of mind, the SEC stated. “Advisors should expect examination staff to leverage these tools to process, review and analyze information and should be prepared to discuss their own use of super intelligence during examinations,” Galipeau said.

The $5 trillion-dollar club seems to only have room for two companies: Apple and Nvidia. The two tech giants have been bopping back and forth between being the world’s most valuable company and the world’s second most valuable company — their market caps rising and falling by hundreds of billions of dollars like a drunk high-roller’s chip pile at The World Series of Poker.

Most recently, Apple surpassed Nvidia on Friday after launching its foldable Duo phone. Now, Apple’s rolling out product after product targeting the end-buyer for AI, on Tuesday unveiling its new powered up iMac and MacBook Pro, both built to process AI workloads faster than their comparable predecessors (but the top-of-the-line MacBook Pros from the last gen outperform this gen’s base models).

Nvidia’s chips were integral to building AI long before anyone turned to ChatGPT for therapy. Both companies are turning AI into hardware but Apple’s focus is much further down the funnel: customers willing to wait for days outside of its stores for AI-forward devices.

Finally Getting Siri-us

Nvidia sprinted to $5 trillion, reaching the pinnacle for the first time (well, any company’s first time) last fall following a meteoric two-year stock surge of more than five times.

Apple meanwhile was largely written off in the AI race. Its early attempts to AI-ify Siri were ugly and embarrassing — the words of Apple’s top Siri exec, not ours. Apple settled a $250 million class action lawsuit last spring after it delayed the delivery of AI features that execs initially said would be part of fall 2024 iPhones. Optics were rough and the r/applesucks Reddit forum was fuming (as it often does). Siri finally got her makeover this summer.

After its initial flop, Apple took a more measured approach to AI:

• Apple’s AI capital expenditures are dwarfed by those of its rivals, as it largely gives up on creating the most powerful AI models. Apple leveraged Google’s Gemini to build its revamped version of Siri, and its AI features seem to be marketed more for their privacy than performance.
• The popularity of the Mac mini to run AI agents 24/7 showed Apple demand for hardware that can handle AI workloads locally, giving users more privacy and saving AI power users tokens they’d otherwise spend on cloud computing. Apple leaned into that demand for hardware, counting on its tech to keep buyers lining up at stores even if its own AI features are less powerful.

Golden Apple: Apple doesn’t need to win the AI race, at least when it comes to features, to keep its top market-cap spot alongside AI leader Nvidia. As long as people keep buying its hardware, its rivals’ offerings can live as options in its App Store. And people may use AI without realizing it through Apple’s built-in features. A slightly smarter Siri can still set a 20-minute timer for cinnamon rolls.

Some wanted the Fed to cut rates this week to spur growth; others wanted a hike to fight inflation. But one group that probably won’t mind rates holding steady is retirees shopping for annuities.

Higher rates can challenge consumers and economies, but they also let annuity carriers offer higher caps and more attractive yields on fixed and fixed-index products. The rate environment has been so favorable for annuity sales that US distribution has set consecutive annual records since 2022, per Limra Secure Retirement Institute data. The composition of those sales looks very different from a decade ago, however, giving advisors an incentive to study up on the annuity playbook.

“Higher rates have absolutely changed the annuity conversation,” said Patrick Huey, founder of Victory Independent Planning. “Clients have meaningfully better choices than a few years ago.”

Fixed for the Win

The near-zero-rate world that prevailed after the 2008 Great Recession limited what insurers could offer in guaranteed rates, caps, payout factors and income features. Now, carriers have more room to work, and fixed annuities can be more attractive than variable products for many shoppers. Industry data backs that up:

• Fixed-rate annuity sales more than tripled in terms of total assets between 2021 and 2025, per data from Limra reported by the Institute of Business & Finance.
• Fixed-indexed annuity sales surpassed $125 billion in 2025, behind only fixed-rate annuities, at $161 billion.

“Some clients who bought in the low-rate era are now holding products that may no longer be especially competitive,” Huey said. “If a contract’s income rider is outdated, fees are heavy or crediting terms have been eclipsed by newer offerings, this is a great time to review.”

This year has been the fifth consecutive one in which Brad Pistole’s clients made at least $30 million in annuity placements.

“Interest rates have helped,” said Pistole, CEO of Ozarks Retirement Group. “But I think some of the recent interest also comes from bumps and questions in the equity markets, which have sparked interest in protection.”

While most of the annuities he writes these days are fixed, another category sparking interest (if not actual sales) is qualified longevity annuity contracts, he said. “Folks are getting older, and they’re realizing that after a very long bull market run, their future required minimum distributions are going to be significant,” he said. Qualified longevity annuity contracts “can help with that because they directly reduce RMDs.”

Future Problems. Rates may not go down soon, but the present is an opportunity to lock in gains, said Dave Byrnes, chief distribution officer at Security Benefit.

“For advisors with clients in or nearing retirement, they may want to consider how much of these portfolios should still be exposed to equities and what alternatives are available,” he said.