“While principles based, the rule is specific with respect to the duty and obligations brokers owe to their clients, and what steps they must take to comply, including the obligation to eliminate, or disclose and mitigate, certain conflicts of interest.
“Not even the so-called fiduciary standard under the Investment Advisers Act includes the obligation to eliminate or mitigate conflicts,” Bentsen said.
Bentsen went so far as to call the new broker standard “an even higher standard than the one that applies today to investment advisors.”
American Council of Life Insurers (ACLI) President and CEO Susan Neely said, “Reg BI strikes the right note—arming people with the information they need to make good purchasing decisions while safeguarding their access to a broad selection of solutions to secure their retirement.
“Protecting consumers does not mean limiting their choice of products and services,” added Neely, who said the SEC’s approach was “a more sensible and sustainable way to protect consumers than the Department of Labor’s fiduciary regulation that eliminated consumer choice and access to products and services essential to a secure retirement.”
Both SIFMA and the ACLI were part of a winning industry lawsuit that successfully overturned the DOL’s fiduciary rule earlier this year.
The mutual fund industry and its association, the Investment Company Institute, also commended SEC’s new rules.
ICI President and CEO Paul Schott Stevens said, “Regulation Best Interest will better serve investor interests by ensuring investors are afforded strong protections when they receive recommendations from broker-dealers. We look forward to engaging with the SEC and our members as they work to implement the new standards.”
Schott said it now is “crucial” for the DOL to complete its fiduciary rulemaking in a manner that is complementary to the SEC’s rulemaking “to ensure consistent standards for both retail and retirement investors.”