July 31, 2018
I was a registered rep for a large insurance broker-dealer for 9 years. And have been running my RIA for 4 years now.
I have concerns that the new Regulation Best Interest standard will cause more harm than good. It would allow broker-dealers to say they act in the best interests of their clients, without actually being subject to a full fiduciary duty to require it.
I believe a better step would be to begin enforcing the Investment Advisers Act of 1940. When a broker is selling products and giving limited scope advice around those products, they should operate under the suitability standard. These lower professional standards make sense when selling products and not acting as the comprehensive/trusted adviser. However, the moment the broker moves into the position of trusted advisor and begins to provide more broad advice to the point of qualifying as an IA under the act of 1940, they should be required to register as IAR. These rules are already clearly laid out in the IA act of 1940 and should be enforced.