“It implies that a fiduciary relationship must be in effect before any advisory arrangement is executed,” she said. “The agreement must reflect the relevant standards for advice and include general disclosures concerning compensation and any related conflicts.”

The contract provides for mandatory arbitration in individual disputes, but also retains a client’s right to participate in class action litigation against an advice provider.

The disclosure contract applies to advice given to ERISA plans—since such advice is already bound to the law’s fiduciary standard, advisors aren’t required to sign a written contract.

“Instead, a written statement stating compensation and the advisor’s fiduciary status is required,” Wagner said. Advisors are also required to provide the same disclosures on compensation and potential conflicts called for in the full-blown best interest contract.

Only level-fee fiduciaries can use the streamlined BIC. Since these advisors by definition typically meet the DOL standard when giving advice, the streamlined contract is most likely to be used by advisors counseling on IRA rollovers that might lead the clients to move assets into an account with higher fees, Wagner said.

“To transition a client into an advisory relationship, the advisor would need a BIC covering the higher ongoing fee,” Wagner said. “There’s still an impact for level-fee fiduciaries that might come as a surprise to some RIAs.”

The streamlined BIC requires that the advisor provide a written statement of fiduciary status and a written rationale for why their recommendation is in the client’s best interest, Wagner said, but otherwise there would be no need for other disclosures.

The transition BIC can only be used during the 2017 transition period, said Wagner.

“The transition BIC may be beneficial for firms who are not yet ready to comply with the full-blown BIC by April 2017,” Wagner said. “Many requirements are waived. It requires the advisor to provide a written statement of fiduciary status and revenue disclosures. It can be provided electronically or by mail.”

In their final form, best-interest contracts will require broker-dealers to describe to investors any differential compensation paid to their associated representatives.