Year-End for Advisory Firms: The Q4 2026 Checklist and Where AI Drafts

A calendar-year advisory firm carries two sets of deadlines across New Year's Day. The client deadlines close on December 31, 2026: required minimum distributions, the qualified charitable distributions meant to cover them, and the loss sales that belong on the 2026 return. The firm deadlines follow in the first four months of 2027: the Form ADV annual amendment, brochure delivery and the annual compliance review.

Both sets draw on the same custodial data, CRM notes, trade blotters and compliance files. Most of the drafting across them is work AI does well, as long as a named person approves every output before it reaches a client, a custodian or a regulator.

RMDs: what has to happen by December 31, 2026

For every client past their first RMD year, the 2026 required minimum distribution is due by December 31, 2026. The IRS puts it in one line: "For each year after your required beginning date, you must withdraw your RMD by December 31."

The first RMD follows a different clock. The required beginning date is April 1 of the year after the client reaches the applicable age. A client who reaches 73 in 2026 can wait until April 1, 2027 to take the first RMD. Waiting has a cost. The 2027 RMD is still due by December 31, 2027, so the client takes two distributions in 2027 and both land in the same tax year. Taking the first one by December 31, 2026 puts them in separate tax years. That is a planning decision for the client and the advisor, and it belongs on the Q4 agenda for every client born in 1953.

The applicable age under SECURE 2.0

SECURE 2.0 raised the RMD starting age to 73 and scheduled a move to 75. The Treasury regulation sets the age by date of birth:

• Born January 1, 1951 through December 31, 1958: age 73.
• Born on or after January 1, 1960: age 75.
• Born in 1959: the regulation leaves this paragraph reserved. Put these clients on a manual review list until final guidance fills the gap.

Clients still working can delay RMDs from their current employer's plan until the year they retire, if the plan allows it, unless they are a 5% owner of the business sponsoring the plan. The delay covers the plan only. Traditional, SEP and SIMPLE IRAs still start at the applicable age.

The excise tax for a missed RMD

Under SECURE 2.0, a missed or short RMD carries an excise tax of 25% of the amount not distributed. The rate drops to 10% if the client takes the missed amount and files a return reflecting the tax within the correction window. IRS Publication 590-B says the window ends on the earliest of three dates: the mailing of a deficiency notice for the tax, the assessment of the tax, or the last day of the second taxable year that begins after the end of the taxable year in which the tax is imposed. The tax is reported on Form 5329.

Roth accounts

Roth IRAs have no RMD while the owner is alive. Designated Roth accounts in 401(k) and 403(b) plans joined them under section 325 of SECURE 2.0, which applies to taxable years beginning after December 31, 2023. So 2024 was the first year without a lifetime RMD from a designated Roth account. Beneficiaries of both account types remain subject to the RMD rules. An RMD list built from custodial data should drop Roth IRAs and designated Roth balances for living owners and keep them for inherited accounts.

Qualified charitable distributions

A QCD is a distribution paid by the IRA trustee directly to an eligible charity. The client must be at least 70½ on the day it is made. For 2026 the annual exclusion is $111,000, up from $108,000 in 2025, per IRS Notice 2025-67. On a joint return each spouse can exclude up to the limit from their own IRAs. QCDs cannot come from an ongoing SEP or SIMPLE IRA.

A QCD counts toward the RMD. A QCD intended to cover the 2026 RMD therefore has to leave the IRA by the same December 31 deadline. Clients between 70½ and their RMD age can make QCDs before any RMD is due.

Tax-loss harvesting and the wash-sale rule

The wash-sale rule is IRC section 1091. IRS Publication 550 describes a wash sale as a sale of stock or securities at a loss where, within 30 days before or after the sale, the client:

• buys substantially identical stock or securities,
• acquires substantially identical stock or securities in a fully taxable trade,
• acquires a contract or option to buy substantially identical stock or securities, or
• acquires substantially identical stock for their IRA or Roth IRA.

A purchase by the client's spouse, or by a corporation the client controls, also creates a wash sale.

In a taxable account, the disallowed loss is added to the cost of the replacement shares, and the holding period of the old shares carries over. The loss is postponed until the new shares are sold.

The IRA case is different. In Rev. Rul. 2008-5, the IRS held that when an individual sells at a loss and causes their IRA or Roth IRA to buy substantially identical securities within the window, the loss is disallowed under section 1091 and the basis in the IRA is not increased. No taxable lot absorbs the loss, so it does not come back later. A screen that sees only a household's taxable accounts misses this case entirely.

The window crosses the year boundary. A loss sale on December 31, 2026 is exposed to purchases made from December 1, 2026 through January 30, 2027. January purchases, including new IRA contributions invested on arrival and rebalancing trades, need to be checked against December's loss sales.

The $3,000 limit and the carryforward

Net capital losses reduce other income by no more than $3,000 a year, or $1,500 for married filing separately, per IRS Topic 409. Losses above that limit carry forward to later years. Whether another December harvest helps a client depends on the gains already realized in 2026 and any carryforward already on the return. That figure comes from the client's return, so the harvest review should include the client's CPA.

2026 contribution limits

The IRS announced the 2026 limits in news release IR-2025-111 on November 13, 2025, with the detail in Notice 2025-67.

The Q4 task is to compare each working client's year-to-date deferrals against these figures before the last 2026 payroll, and to flag clients who turn 60 through 63 and may not know the higher catch-up applies to them.

Firm-side year-end items for SEC-registered advisers

The client work closes December 31. The firm's own filings run on its fiscal year. Every date below assumes a fiscal year ending December 31.

Form ADV annual updating amendment: Rule 204-1

Rule 204-1(a)(1) under the Advisers Act requires an adviser to amend Parts 1 and 2 of Form ADV at least annually, within 90 days of the end of its fiscal year. For a calendar-year firm, the amendment covering 2026 is due by March 31, 2027.

Brochure delivery: Rule 204-3

If the brochure has material changes since the last annual updating amendment, Rule 204-3(b)(2) requires the adviser to deliver to each client, within 120 days after the end of the fiscal year and without charge, either the current brochure or the summary of material changes from Item 2 of Form ADV Part 2A. The summary has to offer the current brochure without charge and give the website address, email address and telephone number where a client can get it. For a calendar-year firm that delivery is due by April 30, 2027.

Annual compliance review: Rule 206(4)-7

Rule 206(4)-7(b) requires a registered adviser to review, no less frequently than annually, the adequacy of its compliance policies and procedures and the effectiveness of their implementation. Rule 206(4)-7(c) requires a designated chief compliance officer to administer them. Rule 204-2(a)(17)(ii) requires the adviser to keep any records documenting that annual review. The rule sets no calendar date, so the firm sets one. Finishing the review before the ADV amendment lets its findings reach the brochure.

Regulation S-P, as amended

The SEC adopted amendments to Regulation S-P on May 16, 2024. Larger entities had to comply by December 3, 2025, and smaller entities by June 3, 2026. For registered investment advisers, a larger entity is one with $1.5 billion or more in assets under management. Both dates have now passed, so the annual review covering 2026 should test the amended requirements at every SEC-registered adviser.

The amended rule, 17 CFR 248.30, gives the annual review three specific things to test:

• A written incident response program reasonably designed to detect, respond to and recover from unauthorized access to or use of customer information.
• Service provider oversight, including a requirement that providers notify the adviser as soon as possible and no later than 72 hours after becoming aware of a breach of a customer information system they maintain.
• Notice to affected individuals as soon as practicable, and no later than 30 days, after the adviser becomes aware that unauthorized access to or use of customer information has occurred or is reasonably likely to have occurred, subject to the exceptions in the rule.

An AI vendor that receives or processes customer information in providing services to the firm meets the rule's definition of a service provider. The vendor belongs on the oversight list, and its breach-notice terms belong in the contract file the reviewer checks.

The Q4 2026 into Q1 2027 checklist

Dates marked "firm-set" have no regulatory deadline. The firm picks them. The rest come from the rules cited above, for a calendar-year firm.

Where AI drafts and a person approves

Each workflow below produces a draft. A named person reviews it, changes what is wrong, and approves it. The approval is recorded with the draft, so the file shows who decided and when.

Building the RMD-not-yet-taken list

The model reads the custodial position and distribution files, matches accounts to households in the CRM, applies the birth-year table, removes Roth IRAs and designated Roth balances for living owners, and lists every account where the 2026 distribution to date is below the custodian's required figure. An operations lead checks each row against the custodian's own RMD calculation. The custodian's figure is the one the firm relies on.

Drafting client outreach

From the approved list, the model drafts a letter or email for each client: the amount still required, the deadline, the options the advisor has already discussed with that client, and a QCD mention where the CRM shows charitable giving. The templates go through the firm's compliance review before the first one is sent. The advisor reads each draft before it goes out.

Flagging wash-sale windows across the household

The model compares every proposed loss sale against every purchase in the 30 days before and the planned purchases in the 30 days after, across all of the household's accounts: taxable, joint, spouse, IRA and Roth IRA. It flags any match on the firm's approved list of substantially identical securities. It does not decide what counts as substantially identical. Compliance owns that list, and the portfolio manager decides whether each trade goes ahead.

Drafting the annual review memo

The model reads the year's records: the compliance calendar, exception logs, trade error files, complaint log, marketing review file, vendor list and incident log. It drafts the Rule 206(4)-7 memo in the firm's format, with each finding tied to the record it came from. The chief compliance officer tests the findings, writes the conclusions and signs the memo. The draft and the signed version both go in the Rule 204-2 file.

Prepping year-end review meetings

For each client meeting, the model assembles a one-page brief from the RMD status, realized gains and losses to date, open wash-sale windows, deferral totals against the 2026 limits, and the notes from the last meeting. The advisor corrects it and decides what to raise.

What AI does not decide

AI does not decide a distribution, a trade or a tax position. It does not choose a client's RMD timing, approve a harvest, rule on whether two funds are substantially identical, or sign an annual review. Those decisions belong to the advisor, the portfolio manager, the chief compliance officer and the client's tax preparer. The model drafts the list, the letter, the flag and the memo. A person decides what happens next and puts their name on it.

Next step

The same custodial data, CRM and compliance files come back every December, so drafting set up against them this year can be reused next year. For more on AI at RIAs and wealth management firms, see AI for financial advisors. To scope the year-end drafting workflows for your firm, start a conversation.