Being Prepared for the Inevitable: Mock Regulatory Exams

Even if your firm is doing everything right, regulatory exams can be stressful. Whether it’s the SEC, FINRA or your state regulator, you will want to be prepared and put your best foot forward on day one. Doing so can result in a positive exam experience, and potentially elongate the amount of time between examinations.

Why Mock Exams Matter

Mock Exams help firms:

• Spot issues early before regulators do and minimize the risk of deficiencies or enforcement.
• Practice under realistic conditions and know what to expect and how to respond.
• Allow senior executives to proactively prepare for regulatory staff interviews.
• Identify gaps in documentation, disclosures, or internal processes.
• Stay current with evolving SEC and state exam priorities (like the marketing rule, cybersecurity, off-channel comms, etc.).
• Strengthen their compliance culture.
• Protect the firm’s reputation by avoiding preventable findings that could trigger scrutiny or client concerns.

The Mock Exam Process

When conducting a mock exam, it is important to follow the techniques below to maximize this experience.

• Replicate a comprehensive regulatory document request and be able to produce such documents within one to two weeks.
• Establish who will take the lead in gathering documents and facilitating the interview process.
• Conduct mock interviews with key stakeholders.
• Based on responses, flag weak spots and discuss with senior executives all findings. Come up with an action plan on how to address identified gaps or deficiencies.

Jacko Law Group offers Mock Exam services for firms who want to stay ahead without scrambling.  We follow the above approach with focus on those areas that are at the top of regulatory priorities, such as the use of AI, cybersecurity, AML and advisory fee calculations. We’re also seeing increased attention on small firms, especially those that haven’t been examined in a while or have recently grown their AUM.

A mock exam is a great way to spot issues early, strengthen your documentation, and walk into your next exam with confidence.  To learn more or to schedule a mock exam, please call us at 619.298.2880 or email [email protected].