Transactions with clients, almost by definition, pose conflicts of interest for investment advisers. In some situations, not only must an adviser satisfy its general fiduciary duties, but also Section 206(3) of the Investment Advisers Act of 1940, which requires an adviser – prior to completing a transaction with a client or prior to effecting a trade for a client while acting as broker for both the client and another person – to disclose the transaction to the client and obtain the client’s consent. A recent risk alert issued by the SEC Office of Compliance Inspections and Examinations (OCIE) highlights common deficiencies in compliance with Section 206(3) and Rule 206(3)‑2 thereunder. This article discusses OCIE’s findings, with added insight from a legal practitioner with significant experience in the area. See also our coverage of OCIE risk alerts on oversight of employees with disciplinary histories; electronic messaging; the cash solicitation rule; best execution; fees and expenses; the advertising rule; compliance topics; custody; cybersecurity; business continuity and disaster recovery plans; and social media.