Elevating Retail Investor Protection: The SEC’s FY 2026 Advocate Report

The Office of Investor Advocate (“OIAD” or “Office”), is the arm of the Securities and Exchange Commission (SEC) responsible for identifying, analyzing, and addressing investor concerns and issues. Its mission is entirely investor-focused. By statute, the OIAD is required to:

• Assist retail investors in resolving significant problems they may have with the SEC or self-regulatory organizations (SROs).

• Identify areas where investors could benefit from regulatory changes.

• Identify problems with financial service providers and investment products.

• Analyze the impact proposed rules and regulations may have on investors, and

• Propose appropriate changes to the rules and regulations.

It is also required to file two reports each year with the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives. One of these reports is the OIAD’s “Report on Objectives.” As the name implies, this is a detailed analysis of Office’s objectives for the upcoming fiscal year.

On June 25, 2025, the Office delivered its Report on Objectives for Fiscal Year (FY) 2026 (“Report” or “Report on Objectives”) to Congress. Below, we will touch on some of the key objectives identified in the Report.

Office of Investor Advocate Report on Objectives for Fiscal Year 2026.

At the outset, the Report identifies six policy objectives for FY 2026:

Enhancing the Accessibility of Disclosures for Investors

• Disclosure and Investor Testing

• China-Based Variable Interest Entities

• Private Market Investments in Retirement Accounts

• Evaluating the Potential Impact of SRO Rule Proposals on Investors, and

• Crypto Task Force Requests for Information.

Our review begins with the most striking policy objective in the Report: 

Private Market Investments in Retirement Accounts.

Notably, the Report on Objectives recognizes that private equity and alternative investments are important to investors, despite their heightened risks, thus, one of the policy objectives for FY 2026 will be “exploring the issues” surrounding including private equity and private equity credit in retirement savings plans (i.e., 401(k) plans).

If this is allowed, retail investors will be given greater access to alternative investments through their retirement plans. And their retirement plans could, in turn, become a significant source of capital for private fund managers. Despite these advantages, the OIAD is cognizant of the tensions between allowing expanded investment opportunities into the private market and protecting retail investors. The OIAD is also aware that allowing retirement funds to include private equity and private equity credit will create complex issues, such as fiduciary duties arising under the Employee Retirement Income Security Act of 1974 (ERISA), that must be taken into account if retirement plans are allowed to invest in private equity.

While opening up retirement accounts to private equity may be desirable, the OIAD does not make the rules or regulations. The information it provides to the SEC is informative and may be persuasive or influential, but ultimately, it’s up to the regulators to determine what investments markets are open to retirement accounts. Therefore, whether retirement funds will be allowed to invest in private equity or private equity credit remains to be seen.

Enhancing Accessibility of Disclosures for Investors

Another policy area identified in the Report is the SEC’s disclosure rules. The SEC has disclosure rules in place to promote transparency and protect investors by providing them with material information regarding investment companies and opportunities. The problem is that over the years, disclosures have become so complex and so costly to companies that serious questions have arisen as to whether they are even effective. 

The situation has been described as causing “information overload” for investors — in other words, disclosures now provide so much information that investors have trouble understanding them or finding the exact information they need.

Recognizing this, one of the OIAD’s objectives for 2026 is to examine and investigate ways in which disclosures can be made more comprehensible to investors and more “user-friendly.” 

Disclosure and Investor Testing

Along with pursuing avenues for making disclosures less cumbersome and more intelligible for investors, the OIAD will continue to encourage investor testing and research on existing and proposed disclosures provided to investors.

It is through investor research and data testing that the OIAD learns what is working for investors and companies and what is not. For mandated disclosures, the goal is to understand how to protect investors by disclosing information that is necessary and understandable, while at the same time not overburdening companies with the cost of providing disclosures that have no real material benefit to investors.

Combating Investment Fraud

Another important objective for the OIAD in 2026 is strengthening the SEC’s efforts to combat financial fraud. The SEC recently launched the Interagency Securities Council (the “Council” or “ISC”), which is a joint task force made up of federal, state, and local regulatory and law enforcement professionals dedicated to reducing financial fraud. The Council meets regularly to share information and discuss emerging investment fraud scams and trends. They also review case studies and propose innovative solutions to combat financial fraud.

In its Report, the OIAD states as an objective to act through the ISC to enhance the SEC’s enforcement abilities and support regulators and law enforcement agencies at all levels of government, in their investigation and prosecution of fraud. 

Monitoring Risks Associated with China-based Variable Interest Entities (VIEs).
The OIAD Report highlights the concerning issue of the proliferation of the use of US-listed companies based in the People’s Republic of China that use variable interest entities (VIEs) as a means of getting around China’s restrictions on foreign ownership and direct listing on exchanges outside of China. The use of VIEs means that many US investors may be investing in the stock of shell companies without knowing it. This raises serious and complex investor protection issues. Thus, the OIAD has made it one of its objectives to explore and investigate this situation during FY 2026. They intend to raise awareness regarding VIE use and to bring this issue and its ramifications to the attention of the SEC and staff.  

Using Nationwide Survey Data and Behavioral Research to Inform Policy Development
The final objective we will touch on here is the OIAD’s responsibility to identify potential changes to SEC rules and regulations that may benefit investors. To further this responsibility, the OIAD conducts research through the OIR — a multidisciplinary group of scientists that uses investor testing, surveys, and statistical modeling to provide the SEC with information and insights into investor behavior.

The OIR maintains a nationally representative survey panel of U.S. retail investors that is the agency’s primary tool for understanding retail investors. This panel, called “THRIVE,” provides longitudinal surveys that assist in evaluating issues of importance to investors as well as revealing investor attitudes and activity, so that the SEC can respond to emerging issues and develop appropriate policies. The OIAD’s objective for FY 2026 is for OIR to continue to manage THRIVE and provide significant research on investor preferences with regard to electronic disclosures.


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