When we presented the unintended consequence of Reg BI to the SEC, they pointed to a clause in the regulation, not in the summaries, that says that brokers only need to ask the client for information relevant to the advice they are giving.
Brokers don’t believe they can offer personalized advice in context because of a literal reading of the main points of the SEC’s Regulation Best Interest.
The SEC’s Reg BI gives a safe harbor for generic recommendations or advice. But as soon as a broker tailors one piece of educational content to a client, they trigger the burdensome Care and Reasonableness obligations. These obligations take so much time for both the broker and the client that clients are better off figuring things out on their own.
When we presented the unintended consequence of Reg BI to the SEC, they pointed to this clause (right) in the regulation, not in the summaries, that says that brokers only need to ask the client for information relevant to the advice they are giving.
