Answers to the SEC’s Reg BI FAQs depend on facts, circumstances

When the CFP Board provides guidance for its fiduciary standard, it uses case studies

Sometimes the answers to the Securities and Exchange Commission’s frequently asked questions on Regulation Best Interest don’t provide concrete solutions.

Last week the SEC released a set of 13 questions about Reg BI, as it’s known. The regulation is the centerpiece of a regulatory reform package the SEC passed last summer. Reg BI and a customer relationship disclosure document, Form CRS, must be implemented by June 30...

...Mr. [Knut] Rostad prefers the way that the Certified Financial Planner Board of Standards Inc. is providing guidance about the strengthened fiduciary duty being required of its mark holders, which also will be implemented on June 30. The CFP Board has released a document filled with case studies illustrating whether a mark holder has met his or her obligations in different scenarios, such as an insurance professional selling an annuity.

“It successfully describes the gravity of the situation and heads in a good direction to begin to address mitigating natural conflicts of interest,” Mr. Rostad said.
Ms. Lynch also likes the CFP Board approach. “They’re giving you facts and circumstances in each case study, so you can do your own analysis,” she said.

InvestmentNews
by Mark Schoeff Jr.
January 14, 2020