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SEC to Vote on Best Interest Regulations on June 5, 2019

Jun 4, 2019 10:23:50 AM


According to an article on the Wealth Management website, the Securities and Exchange Commission will formally vote on the best interest legislation proposed nearly a year ago. The package covers four main topics: regulation of best interests (Reg BI), which aims to establish a code of conduct for life insurance brokers; a relationship summary (Form CRS); a standard of conduct for investment advisors; and a new interpretation of a principle known as “solely incidental”, originating in the Investment Advisors Act of 1940.

States such as New York and Nevada have already taken it upon themselves to establish legislation around best interest standards, but this proposal brings the discussion to the federal level.

Before the final decision is announced, you can proactively ensure that you’re compliant with best interest standards by implementing an automated policy management platform, like Proformex, that formalizes your processes and provides a better, more consistent experience for your clients – regardless of product type, distribution channel, etc. In December 2018, we posted a quick overview of how such a platform can help and what to look for in a potential solution.

What are your thoughts regarding best interest standard legislation? Will the SEC vote to pass or reject this proposal? Let us know in the comments below.

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