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Letter to the SEC on Regulation Best Interest

By on

August 6, 2018

The Honorable Jay Clayton, Chairman
United States Securities & Exchange Commission
100 F Street, NE
Washington, DC 20549

RE: Regulation Best Interest; File No. S7-07-18

Dear Chairman Clayton:

I write, as president of the Institute for the Fiduciary Standard, in response to your request for comment on standards of conduct for investment advisers and broker dealers. This letter addresses Regulation Best Interest (RBI).

Introduction

The SEC has a unique and vital role in overseeing over 12,000 registered investment advisers with trillions of dollars in assets held by 54% of U.S. households, according to Gallup. Fiduciary duties serve to guide adviser conduct; the Commission edits and publishes the guide. Your guidance is critical for advisers seeking to know they meet the standard and, also, to ’self-police’ their own actions.

The SEC has released three proposed rules on conduct standards for brokers-dealers and investment advisers. The rules, entailing 1,000 pages, are found on the SEC website.1 This letter reviews recent developments at the SEC, core features of the proposed RBI COI and key elements of what a real best interest standard regarding conflicts of interest obligations should entail. It also offers proposed hypothetical disclosure for advisers and brokers.

Read the entire comment to the SEC below.

Dan Moisand

 

Dan Moisand is a nationally recognized fiduciary fee-only financial planner, an Institute Real Fiduciary™ Advisor and Chair-elect of the CFP Board.

The Institute has enshrined the ‘Moisand Rule’ on fiduciary practices. It is basic and is more important today than ever: “You have to avoid conflicts. If I avoid a conflict, I don’t worry about it.”

Watch the video of Moisand speaking here.

Bob Veres

 

Bob Veres is a long term observer of financial planning. His Newsletter, “Inside information” Is a staple of leading planners. In the May edition he writes about fiduciary and the Institute.

"But a much bigger point is that the fiduciary standard—as Knut Rostad of the Institute for the Fiduciary Standard has pointed out—has been determined by the Supreme Court (1963 ruling) to be at the very heart of the Investment Advisers Act of 1940. It is the foundation of what it means to be an RIA registered with the SEC instead of a tipster or a tout."

- Bob Veres, Parting Thoughts ... The SEC's Own Compliance Culture