National Association of Insurance and Financial Advisors

NAIFA Offers Webinar on the SEC's Reg BI

The NAIFA Webinar on Reg BI is Tuesday, Sept. 24 at 3 PM (EDT). Register Now!
Everyone's attention these days seems to be focused the SEC. And I'm not just referring to college football.

Early this summer the Securities and Exchange Commission finalized its Regulation Best Interest (Reg BI), which requires broker-dealers and their registered reps to work in the best interests of their retail clients.
First, the good news:
  • Reg BI is much friendlier to financial professionals and their clients than the Department of Labor’s fiduciary rule, which NAIFA, the ACLI and others defeated in federal court in 2018. The SEC’s final rule reflects some of the suggestions NAIFA made in our meetings with the SEC commissioners during the proposal stage.
  • Most of the compliance burden from Reg BI falls on broker-dealers, rather than individual financial professionals.
  • And hey -- NAIFA members always put their client’s interests first, so how hard could it be, right? Well, did I mention the federal government’s involved?
Which leads to the slightly less good news:
  • The final rule is 1,400 pages long, counting the commentary and discussion. It’s complex and obviously says a little bit more than: “Put your clients’ interests first.”
  • It requires firms and their reps to make additional disclosures on a new Form CRS. However, broker-dealers, not individuals, will likely assume the burden of designing the disclosure form.
  • Also not ideal, the rule imposes some restrictions on the use of the terms “advisor” and "adviser" by professionals who are not registered investment advisers. (Yes, under Reg BI you may still call yourself a member of the National Association of Insurance and Financial Advisors.)
Here are three quick things to know about Reg BI:
One: The rule is complex. NAIFA fully supports the concept of financial professionals working in their clients’ best interests. It’s a principle enshrined in our code of ethics. Compliance isn’t required until June 30 of next year, and BDs are working on new policies and procedures to have them—and you—be in compliance.
Two: The rule is complex. You can learn a lot more about it from our NAIFA webinar, “The SEC’s Regulation Best Interest – What You Need to Know,” Tuesday, September 24, at 3 p.m. (EDT). Register online today.
Three: The rule is complex! Regardless of what we tell you or you may read, you need to follow the direction and requirements provided by your BDs and investment advisor firms.
  • Posted September 19, 2019 IN
  • Comments (1)

It certainly is complex. Lots to follow.
9/23/2019 2:23:49 PM