Investment advisers help clients decide how to invest retirement accounts, college savings, and long-term nest eggs. That role comes with enormous influence: a single recommendation can reshape decades of work.

Regular, independent inspections help confirm that advisers follow rules, safeguard assets, and manage conflicts of interest instead of quietly drifting off course. Without meaningful oversight, even honest advisers operate in a system where poor practices or misconduct might go unnoticed for years.

The Inspection Gap

Imagine if vehicles on the road were inspected, on average, only once every 11 years—and a large share never inspected at all. In oversight discussions, this analogy has been used to illustrate how infrequent examinations can be when coverage levels are low.

Regulators may examine many advisory firms on long cycles, and earlier public oversight materials highlighted that some firms had not yet been examined at the time of those reviews. The result is that some practices can operate for years without anyone outside the firm reviewing controls, recordkeeping, or how client accounts are truly handled.

Trust and Safeguards

Handing over management of life savings is an intensely personal decision. A strong adviser relationship typically involves deep conversations about family, fears, timelines and goals, followed by a written investment policy and ongoing monitoring.

Most professionals work hard to meet those responsibilities, but headlines about misconduct—firms misusing client funds, hiding conflicts, or ignoring mandates—cast a shadow over everyone. Consistent inspections create a baseline of confidence: clients know someone objective checks whether firms do what they claim. Exams do not guarantee perfection, but they can catch patterns of negligence or misconduct earlier and discourage bad actors from entering the profession.

Limits Of Regulators

Oversight of investment advisers in the United States largely falls on federal securities regulators and state agencies. These organizations face growing workloads as the adviser population and reported assets have expanded. Recent public reporting has shown more than 15,000 registered investment advisers reporting approximately $128 trillion in regulatory assets under management.

Even with strong intentions, limited budgets and staffing make it difficult to visit firms as frequently as risk would suggest. When one examiner is responsible for monitoring hundreds of firms, low-risk but poorly run shops can slip to the bottom of the list. The result is a structural mismatch: high public reliance on advice, but inspection cycles that lag far behind industries with comparable impact on daily life.

A User-Fee Fix

One proposed solution is straightforward: require advisory firms to pay a dedicated user fee to fund more frequent examinations. Just as drivers pay registration fees and inspection costs to help maintain road safety, advisers would contribute a modest amount to support the oversight that underpins trust in their profession.

A carefully designed fee could be scaled to firm size, so small practices pay less than large institutions with billions under management. Those funds would be earmarked specifically for examination programs—hiring more inspectors, upgrading technology, and shortening the exam cycle to something closer to every three or four years for all firms. Public advisory and oversight discussions have repeatedly returned to this funding concept as a way to narrow the inspection gap.

Elisse B. Walter, a securities regulator, writes that examination coverage levels once implied that the average adviser could expect an examination only about once every 11 years.

What Investors Can Do

While policy debates continue, individual investors do not have to wait for regulation to strengthen their own due diligence. A simple “annual inspection” mindset can be applied to any adviser relationship.

Once a year, clients can:

– Request a clear explanation of the firm’s regulatory status and last examination date.

– Review account statements directly from custodians, not only from the adviser’s own reports.

– Ask how client assets are safeguarded and who has authority to move money.

– Confirm investment strategy still matches goals, risk tolerance and time horizon.

Investors can also check public disclosure tools that show an adviser’s registration and disclosures. Combining regulatory checks with personal questions about compensation, conflicts of interest, and service scope gives a fuller picture of how the relationship is managed.

Strengthening The System

For advisory firms, more frequent official exams can feel burdensome in the short term but valuable over the long term. Passing a thorough review becomes proof of strong controls and ethical practice, which can be shared with clients and prospects.

Firms that already follow best practices gain a competitive edge when oversight is consistent and visible. Those cutting corners face a higher chance of being caught and removed from the field, lifting overall industry standards. In that sense, user-fee-funded exams resemble mandatory safety checks in any other critical system: they level the playing field and prevent a race to the bottom in compliance standards.

Conclusion

The person managing an investor’s life savings should be at least as regularly inspected as the vehicle used for a daily commute. Today, that is not yet the norm—many advisory practices go years without an in-depth, independent review.

More frequent, well-funded examinations can protect clients, elevate trustworthy professionals, and rebuild confidence in financial advice. On a personal level, an annual “adviser checkup” by each client—asking questions, reviewing documents, and confirming alignment—offers an extra layer of protection.