Investment advisers are wary of the costs involved in a proposal by a Securities and Exchange Commission member that would require advisers to hire third-party contractors to conduct examinations now performed by the SEC for free.

At the annual conference of the Financial Industry Regulatory Authority Inc. in Washington on Tuesday, SEC Commissioner Daniel Gallagher recommended that the SEC write a rule that would require advisers to hire an examiner to review their operations.

The rule would be similar to one the agency adopted in 2009 that mandates that advisers who maintain custody of…