Applicable Standard of Care

What this video covers

• How the standard of care escalates from baseline suitability to full fiduciary duty as relationships become more trust-based
• Why broker-dealers owe suitability to institutional customers but best interest (Regulation Best Interest, or Reg BI) to retail customers under SEC rules
• How NASAA's Statement of Policy incorporates Reg BI at the state level, making a violation a dishonest or unethical business practice enforceable by the Administrator
• Why suitability and best-interest obligations cannot be waived or disclaimed by any customer agreement, even in writing
• When the unsolicited trade exception applies: the standard attaches only to recommendations, not to trades the customer initiates without any recommendation
• Why Reg BI is a snapshot duty at the moment of recommendation, not an ongoing fiduciary standard like that owed by an investment adviser
• The prudent investor standard for trustees under the Uniform Prudent Investor Act, including the portfolio-context rule for judging individual investments