7 Key Compliance Takeaways for RIAs from the SEC's March 27, 2025 Artificial Intelligence Roundtable

The SEC's March 27, 2025 AI Roundtable brought together industry leaders, regulators, and compliance experts to discuss the evolving landscape of artificial intelligence in financial services. For RIAs, this event provided critical insights into how regulatory expectations are shaping around AI adoption and compliance requirements. (SEC Roundtable on Artificial Intelligence)

Acting Chairman Mark Uyeda's remarks emphasized that artificial intelligence involves the use of interrelated technologies to accomplish tasks that previously required human intelligence, and that the incorporation of technology into financial markets is not new but has consistently advanced using technological innovations. (SEC Acting Chairman Remarks) This perspective sets the stage for understanding how RIAs should approach AI compliance in 2025 and beyond.

The roundtable discussions revealed seven actionable insights that every RIA compliance team should understand and implement. These takeaways directly impact how firms structure their compliance programs, manage AI-related risks, and maintain regulatory readiness in an increasingly automated environment.

1. AI Governance Frameworks Must Be Proactive, Not Reactive

The roundtable emphasized that RIAs can't wait for prescriptive AI regulations to emerge. Acting Chairman Uyeda noted that AI has been used in financial products and services for decades, leading to enhancements in trading, investing, financial products, and processes. (SEC Acting Chairman Remarks) This means firms need to establish governance frameworks now, not later.

For RIAs, this translates to developing internal AI policies that address model validation, data quality standards, and human oversight requirements. Your compliance program should include specific procedures for evaluating AI tools before implementation, ongoing monitoring of AI-driven processes, and clear escalation paths when AI systems produce unexpected results.

Modern compliance platforms are already integrating AI-driven workflows to help firms stay ahead of these requirements. (Luthor AI Compliance) These systems can automatically flag potential AI-related risks and ensure your governance framework remains current with evolving best practices.

2. Disclosure Requirements Are Getting More Granular

Commissioner Caroline Crenshaw's remarks highlighted the July 2023 proposed rule on the use of Predictive Data Analytics by Broker Dealers and Investment Advisers, which aimed to address how financial professionals manage conflicts of interest in light of emerging technologies. (Commissioner Crenshaw Remarks) While many in the financial industry felt the scope was inappropriate and overbroad, the underlying message is clear: disclosure expectations are becoming more detailed.

RIAs need to be transparent about how AI influences their investment processes, client communications, and advisory services. This goes beyond simple "we use technology" statements. Clients should understand when AI is making recommendations, how human advisors review AI-generated insights, and what safeguards exist to prevent AI-driven errors.

Your Form ADV disclosures should specifically address AI usage in portfolio management, client onboarding, risk assessment, and marketing activities. The key is being specific enough to be meaningful while avoiding technical jargon that confuses clients.

3. Human Oversight Cannot Be Automated Away

One of the strongest themes from the roundtable was that AI augments human decision-making but doesn't replace human responsibility. This principle directly impacts how RIAs structure their compliance programs around AI tools.

Every AI-driven process in your firm should have clearly defined human checkpoints. For investment decisions, this might mean requiring advisor review of AI-generated portfolio recommendations before implementation. For client communications, it could involve human approval of AI-drafted emails or marketing content.

The challenge is building these oversight mechanisms without creating bottlenecks that negate AI's efficiency benefits. Successful RIAs are finding that balance by using AI to handle routine tasks while reserving complex decisions for human judgment. (RIA Compliance Software)

4. Data Quality and Model Validation Are Non-Negotiable

The roundtable discussions made clear that AI systems are only as good as their underlying data and model validation processes. For RIAs, this means establishing rigorous standards for data inputs and ongoing model performance monitoring.

Your compliance program should include procedures for validating data sources, testing AI model outputs against known benchmarks, and documenting model performance over time. This is particularly important for AI tools used in investment research, risk assessment, or client suitability determinations.

Generative AI in financial services presents exciting possibilities for RIA firms, but its emergence requires careful attention to data quality and model governance. (Future-proofing Your RIA with Generative AI) Firms that establish strong data governance practices now will be better positioned to leverage AI capabilities while maintaining regulatory compliance.

5. Recordkeeping Requirements Apply to AI-Generated Content

The SEC's recent updates to Rule 17a-4, which became effective January 3, 2023, modernized recordkeeping requirements in light of technological changes over the last two decades. (SEC Rule 17a-4 Updates) These updates are particularly relevant for RIAs using AI tools that generate client communications, investment research, or compliance documentation.

AI-generated emails, reports, and recommendations must be captured and retained according to the same standards as human-created content. This includes maintaining the original AI prompts, model versions used, and any human modifications made to AI outputs.

The amendments eliminated the requirement for broker-dealers to notify their designated examining authority before employing an electronic recordkeeping system, but they also introduced new requirements for electronic recordkeeping systems to preserve records in a digital format that permits viewing and downloading. (Electronic Recordkeeping Requirements) RIAs should ensure their AI tools integrate with compliant recordkeeping systems.

6. Risk Management Must Address AI-Specific Scenarios

Traditional risk management frameworks need updates to address AI-specific risks like model drift, algorithmic bias, and system failures. The roundtable emphasized that firms can't simply bolt AI onto existing risk frameworks and expect adequate coverage.

RIAs should develop specific risk scenarios around AI failures, such as what happens when an AI model produces erroneous investment recommendations or when data feeds to AI systems are compromised. Your business continuity plans should address AI system outages and include procedures for reverting to manual processes when necessary.

Compliance checklists are detailed lists that simplify an organization's complex requirements for compliance regulations into manageable tasks, and they're particularly valuable for managing AI-related risks. (What is a Compliance Checklist) The purpose of these checklists is to help companies mitigate risks and ensure every part of their business adheres to financial-related laws and regulations.

7. Vendor Due Diligence Requires AI-Specific Assessments

The roundtable highlighted that RIAs using third-party AI tools need enhanced vendor due diligence processes. Traditional vendor assessments focused on financial stability, data security, and service reliability. AI vendors require additional scrutiny around model transparency, bias testing, and ongoing performance monitoring.

Your vendor due diligence should include questions about AI model training data, validation methodologies, and how vendors handle model updates. You should also understand what happens to your data when AI models are retrained and how vendors ensure consistent performance across different market conditions.

Many RIA compliance technology platforms have developed cutting-edge software designed to help firms manage and automate their regulatory compliance needs, including vendor oversight. (RIA Compliance Technology) These platforms ensure that firms can meet regulatory requirements, including data collection, review processes, and archiving, all within structured systems that accommodate AI-specific vendor assessments.

Implementing These Takeaways in Your Compliance Program

The seven takeaways from the SEC's AI Roundtable aren't just theoretical concepts. They require practical implementation in your day-to-day compliance operations. The banking industry had to pay over a combined $3.2 billion for anti-money laundering penalties, and sixteen RIA firms were ordered to pay a combined $81 million in fines for failing to keep proper records. (Compliance Checklist Guide) These statistics underscore the importance of getting compliance right the first time.

Start by conducting an AI inventory across your firm. Document every AI tool currently in use, from portfolio management systems to client communication platforms. For each tool, assess how it aligns with the seven takeaways and identify gaps in your current compliance approach.

Next, update your compliance policies to specifically address AI usage. This includes revising your Code of Ethics, updating Form ADV disclosures, and establishing new procedures for AI tool evaluation and ongoing monitoring. Your compliance manual should include specific sections on AI governance, human oversight requirements, and vendor management for AI providers.

The Role of AI in Compliance Itself

Interestingly, the roundtable also touched on how AI can improve compliance processes themselves. AI algorithms can identify market trends, optimize portfolios, uncover hidden risks, automate client servicing, anticipate client needs, and mitigate risk. (Wealth Management Trends 2025) In fact, 62% of wealth management firms acknowledge that AI will significantly transform their operations.

For compliance teams, AI can automate routine monitoring tasks, flag potential violations before they occur, and streamline regulatory reporting. The key is ensuring that AI-powered compliance tools themselves meet the governance standards outlined in the seven takeaways.

Modern compliance platforms integrate expert support with AI-driven workflows to streamline compliance processes, ensuring firms remain SEC and FINRA compliant. (RIA Compliance Solutions) These platforms offer real-time risk detection, automated policy drafting, and continuous monitoring to keep clients audit-ready.

Looking Ahead: Preparing for Future Regulatory Guidance

While the March 27 roundtable provided valuable insights, it's clear that more specific regulatory guidance is coming. RIAs that implement the seven takeaways now will be better positioned when formal rules emerge.

The SEC's approach appears to focus on principles-based regulation rather than prescriptive technology mandates. This means firms have flexibility in how they implement AI governance, but they also bear responsibility for ensuring their approaches are effective and compliant.

Stay engaged with industry developments and regulatory announcements. The SEC's roundtable was just one step in an ongoing dialogue about AI in financial services. Firms that actively participate in this dialogue and adapt their compliance programs accordingly will have competitive advantages in the AI-enabled future of wealth management.

Post-Event Compliance Checklist

Based on the seven takeaways from the SEC's AI Roundtable, here's a practical checklist for RIA compliance teams:

Immediate Actions (Next 30 Days):

• Inventory all AI tools currently used in your firm

• Review existing compliance policies for AI-related gaps

• Assess current vendor agreements for AI-specific provisions

• Document human oversight procedures for AI-driven processes

Short-term Implementation (Next 90 Days):

• Update Form ADV disclosures to address AI usage

• Establish AI governance framework and approval processes

• Implement enhanced vendor due diligence for AI providers

• Create AI-specific risk scenarios for business continuity planning

Ongoing Monitoring:

• Regular review of AI model performance and validation

• Quarterly assessment of AI-related compliance risks

• Annual update of AI governance policies and procedures

• Continuous monitoring of regulatory developments and industry best practices

All-in-one compliance solutions for investment advisers can help streamline this implementation process by offering customizable templates to build out compliance programs with tasks, policies, testing rubrics, and forms. (Complect Compliance Solution) These platforms provide maintenance features such as prompts and reminders, and also offer the option to hire experts from their networks.

Final Thoughts

The SEC's March 27, 2025 AI Roundtable marked a significant moment in the evolution of financial services regulation. The seven takeaways we've outlined provide a roadmap for RIAs to navigate the complex intersection of AI innovation and regulatory compliance.

The message from regulators is clear: AI adoption in financial services is inevitable and beneficial, but it must be done responsibly. Firms that proactively address AI governance, maintain robust human oversight, and adapt their compliance programs to address AI-specific risks will be best positioned for success.

Remember that compliance isn't just about avoiding penalties. It's about building trust with clients, protecting your firm's reputation, and creating sustainable business practices. The firms that get AI compliance right will have competitive advantages in efficiency, risk management, and client service.

If you're looking to streamline your AI compliance efforts while reducing risk and operational burden, consider exploring automated compliance solutions that can help you tackle marketing compliance at scale. Modern AI-powered platforms can automatically review marketing assets for compliance, helping you reduce the risk, effort, and time required to maintain regulatory standards in an AI-driven world. (RIA Compliance Software)

Frequently Asked Questions

What were the main topics discussed at the SEC's March 27, 2025 AI Roundtable?

The SEC's AI Roundtable focused on how artificial intelligence is transforming financial services and the evolving regulatory expectations for firms using AI technologies. Key discussions included governance frameworks, risk management protocols, disclosure requirements, and how AI fits within existing fiduciary duties for investment advisers.

How does the proposed Predictive Data Analytics rule impact RIA firms using AI?

The July 2023 proposed rule on Predictive Data Analytics by the SEC's Investment Management and Trading and Markets divisions aims to address conflicts of interest when financial professionals use emerging technologies in investor interactions. Many industry participants felt the proposal was overly broad in its technology definitions and overlapped with existing Reg BI and fiduciary duty requirements.

What compliance considerations should RIAs have when implementing AI technologies?

RIAs must ensure proper governance structures, maintain adequate disclosure practices, and implement robust risk management frameworks when adopting AI. This includes establishing clear policies for AI use, ensuring compliance with existing fiduciary duties, and maintaining proper documentation and oversight of AI-driven investment decisions and client interactions.

How can RIA compliance software help firms manage AI-related regulatory requirements?

Modern RIA compliance software platforms can help automate regulatory compliance needs, including data collection, review processes, and archiving requirements related to AI implementation. These platforms offer features like automated workflows, streamlined approval processes, and comprehensive audit trails that are essential for demonstrating compliance with AI governance requirements.

What are the current trends in AI adoption among wealth management firms?

According to recent industry data, 9 out of 10 financial advisors have positive views of AI, and 62% of wealth management firms acknowledge that AI will significantly transform their operations. AI is being used for portfolio optimization, risk identification, client servicing automation, and market trend analysis across the industry.

How do recent SEC recordkeeping rule updates affect AI implementation for RIAs?

The 2023 amendments to SEC Rule 17a-4 modernized electronic recordkeeping requirements to accommodate new technologies, including AI systems. The updates replaced "electronic storage media" with "electronic recordkeeping system" and eliminated certain notification requirements, making it easier for firms to implement AI-powered compliance and recordkeeping solutions.