The SEC has voted to approve a financial investment reform package.
. Known as "Regulation Best Interest" or "Reg BI," the package is intended to strengthen protections for investors by requiring financial advisors and in particular broker-dealers to disclose conflicts of interest.Here's the good news. Under the new Reg BI, both broker/dealers and investment advisors will be required to place the interests of their clients above their own.
So instead of a uniform set of rules, we have two sets: a "fiduciary" rule for investment advisors and a "Best Interest" rule for broker-dealers. But there is more. There are standards of care that must be exercised. The broker-dealer must be able to articulate the risk, rewards, and costs of what they are doing for the client, and they must make a recommendation in the retail customer's best interest.
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