Several factors can trigger an exam: routine risk-based selection (the SEC prioritizes certain adviser types, strategies, and risk profiles), tips or complaints from investors or employees, referrals from other SEC divisions or regulators, and prior deficiencies that warrant follow-up.
New registration can also be a factor (the SEC sometimes examines newly registered advisers within their first few years), along with industry-wide initiatives (the SEC periodically focuses on specific areas like fees, conflicts, or cybersecurity across a group of advisers).
You cannot control whether you are selected, but you can control your state of readiness.
This article is for informational purposes only and does not constitute legal advice. Consult qualified professionals for guidance specific to your situation.