Sales practices, suitability, and fee structures, will be top priorities for the U.S. Securities and Exchange Commission’s (SEC) compliance department this year as it aims to focus on retail investor issues.

The SEC Tuesday published the priorities of its Office of Compliance Inspections and Examinations, setting out the areas where it sees heightened risks, and intends to focus when examining firms. One of the division’s top priorities for the year ahead is retail investor issues, including whether the information, advice, and products and services they are being offered is compliant.

“As investors are more dependent than ever on their own investments for retirement, the financial services industry is offering a broad array of information, advice, products, and services to retail investors to help them plan for, and live in, their retirement years. We are planning various examination initiatives to assess risks to retail investors that can arise from these trends,” it says.

Among the potential risks, the SEC highlights issues such as the sorts of fees that firms are charging. “Where an advisor offers a variety of fee arrangements, we will focus on recommendations of account types and whether they are in the best interest of the client at the inception of the arrangement and thereafter, including fees charged, services provided, and disclosures made about such relationships,” it says.

It is also planning to assess: whether firms are using improper or misleading sales practices; the suitability of recommendations involving the use complex, or structured products, and higher yield securities; and, the use of alternative investment strategies and products with ordinary retail investors. Additionally, it plans to review “whether mutual funds with significant exposure to interest rate increases have implemented compliance policies and procedures and investment and trading controls sufficient to ensure that their funds’ disclosures are not misleading and that their investments and liquidity profiles are consistent with those disclosures.”

Along with the retail investors risks, the SEC also plans to focus on two other major areas in its compliance exams: issues related to market-wide risks; and, using data to uncover illegal activity, such as excessive trading and penny stock pump-and-dump schemes.

Among other things, the SEC says it will address market-wide risks by examining the largest broker-dealers and asset managers; and, reviewing the clearing agencies that have been designated systemically important. It also intends to continue its reviews of broker-dealers’ and investment advisers’ cybersecurity compliance and controls. And, it intends to examine possible order routing conflicts, including whether firms are prioritizing their use of trading venues based on payments for order flow in conflict with their best execution duties.

In terms of sniffing out potential illegal activity, the SEC says that it will focus on “recidivist reps”, microcap fraud, and excessive trading.

In addition to these major areas of focus, the SEC says that it is planing to examine select proxy advisory firms; transfer agents, particularly those involved with microcap securities; and, it says that it will be looking into the fees and expenses charged by private equity funds.

The SEC’s priorities for exchanges and self-regulatory organizations (SROs) are not included in today’s report, and will be dealt with separately, it notes.