Published: August 2018

It’s buyer beware with the SEC’s latest best interest proposal

Coalition advocates called on the Securities and Exchange Commission to clarify its proposed “best interest” standard, and asked that it make the required disclosures much easier to understand for consumers. They also asked the SEC make the standard no less stringent than the Advisers Act fiduciary standard. Otherwise, unsuspecting investors may not be aware that their advisers are selling them products they don’t need in order to turn a profit.

The proposed Securities and Exchange Commission’s (SEC) best interest standard, if finalized in its current form, could make shopping for financial advice trickier for unsuspecting investors. The rule would require brokers to act in the best interest of their customers when making recommendations regarding insurance or investment products. But it doesn't provide specifics about exactly how brokers are supposed to act in their customers' best interest. The proposal also relies on brokers to disclose potential conflicts of interest to their customers, which assumes customers will be able to understand these disclosures and make informed choices.

Lead Organization

American's for Financial Reform (AFR)

Other Organizations

Alliance for Retired Americans | American Federation of Labor and Congress of Industrial Organizations | American Federation of State, County and Municipal Employees | Americans for Financial Reform | Better Markets | Center for Economic Justice | Committee for the Fiduciary Standard | Consumer Action | EPI Policy Center | Florida Consumer Action Network | International Association of Machinists and Aerospace Workers | International Brotherhood of Electrical Workers | International Federation of Professional and Technical Engineers | Main Street Alliance |Montana Organizing Project | NAACP |National Association of Social Workers | National Committee to Preserve Social Security and Medicare | National Consumers League | National Employment Law Project | National Organization for Women |Pension Rights Center | Public Justice Center | South Carolina Appleseed Legal Justice Center | UnidosUS | U.S. PIRG Woodstock Institute

More Information

For more information, please visit AFR's website.

Download PDF

It’s buyer beware with the SEC’s latest best interest proposal   (BI_Comment.compressed.pdf)