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The Securities and Exchange Commission (SEC) finalized proposals on June 5, 2019, regarding the standards of conduct for broker-dealers and investment advisers. These proposals will require financial professionals to act in the best interest of their clients when providing investment advice.
Why does it matter?
The rules increase investor protection, choice, clarity, and opportunity for all types of investment accounts – from a young investor starting to save for retirement and their future to a family looking to buy their first home or pay for their child’s education. Learn more about different types of investment accounts in these investor profiles.
Number to know:
85%. Following in-depth interviews with 15 companies that provide financial advisory services and products to nearly 78 million investment accounts, 85% said they view “protection for investors” as the most likely benefit of the rules when they were in the proposal stage.
“The SEC rules ‘go above and beyond’ to eliminate potential conflicts of interest, including banning sales contest that encourage brokers to sell a certain financial product,” said Samantha DeZur, executive director for capital markets competitiveness at the U.S. Chamber of Commerce. “These rules will protect investors while also preserving their choices to different types of advice.”
Broker-dealers and Investment Advisers will have to comply with the majority of the new requirements by June 30, 2022. Additionally, the Department of Labor will follow up with regulatory action. The U.S. Chamber and industry stakeholders will continue to engage with the SEC and DOL throughout finalization and implementation of these landmark regulations.
- U.S. Chamber State Preemption Letter
- U.S. Chamber SEC Comment Letter
- SEC press release and fact sheet
- Final rule texts
- U.S. Chamber press release
- Above the Fold: When It Comes to Saving for the Future, One Size of Financial Advice Does Not Fit All
- Above the Fold: SEC Proposed Best Interest Rules: Putting Investors First
- Bloomberg: Trump’s SEC Proposes Obama-Era Broker Conflict Rules Rewrite
- Investor Profiles: Saving for Your Future
- Video: Understanding the World of Investing
Originally published: 10/18/2018. Latest update: 6/10/2019.