Standards of Conduct: Regulation Best Interest and the ’40 Act

The Securities and Exchange Commission’s Regulation Best Interest proposal creates a standard of conduct for brokers – but how does that compare with the obligations imposed on investment advisers under the Investment Advisers Act of 1940?

Under the Regulation Best Interest, the standard of conduct is met by satisfying three underlying obligations: a “Disclosure” obligation, a “Care” obligation and a “Conflict of Interest” obligation.

We’ve developed a side-by-side comparison of the Best Interest obligations under the twin fiduciary duties of care and loyalty that inspired them. You can access the chart here.

Joseph A. Caruso, III, JD, MSPPM, is Government Affairs Counsel for the American Retirement Association.

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