Regulation Best Interest

What this video covers

• The Reg BI traffic lanes: which customers are retail (natural persons, personal/family/household use) then which remain under the suitability rule
• Why account-type recommendations and rollovers such as 401(k)-to-IRA moves are covered by Reg BI, not just specific securities transactions
• The Disclosure Obligation: full written disclosure of capacity, fees, services, conflicts, and limitations, and why disclosure never cures a bad recommendation
• The Care Obligation and its three sub-prongs: understand risks/rewards/costs, have reasonable basis for best interest including cost comparison against alternatives, then prevent excessiveness in a series of transactions
• The Conflict of Interest Obligation: identify then mitigate or eliminate conflicts, and the mandatory elimination of product-specific sales contests, quotas, bonuses, and non-cash compensation within limited time periods
• Why production-based compensation on total gross commissions is permitted while product-specific incentives are banned
• The Compliance Obligation: written supervisory procedures, abbreviated WSPs, as an independent requirement that covers Reg BI as a whole
• Side-by-side Reg BI versus suitability on customer type, standard height, explicit cost consideration, and conflict treatment