Choosing a financial advisor has always been a confusing, high-stakes decision, and critics say a recent regulation designed to help consumers may actually have made it harder to know whom to trust.
On its face, the new measure, known as Regulation Best Interest, sounds promising. Adopted in June by the U.S. Securities and Exchange Commission (SEC), it says that broker-dealers must act in the best interest of their customers when recommending investment moves, and that they must disclose any potential conflicts of interest. Brokers sell stocks, bonds and mutual funds, and before they were held to a lower, “suitability” standard, meaning they were required only to recommend investments that are “suitable” based on the client’s situation, goals and risk tolerance.
Kerri Anne Renzulli & Alix Langone | Money.com