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Retail Investor Protection

Something that was implemented in Europe in 2007 starting with MiFID is now in place in USA with the implementation of Best Interest on June 5, 2019. The Best Interest Rules had been under review since 2018 and are now finalized.

Form CRS which an Investment Advisor must get a client to sign-off now makes sure that the client is in no doubt on all the key issues associated with an engagement, specifically:

1. Relationships & Services fully defined

2. The Investment Advisors obligation to the client

3. A comparison with a competing provider of services

4. Conflict of interest disclosures

5. A list of 10 questions that the investor is prompted to ask the advisor

There are several layers and angles to consumer protection in the USA. But the single biggest differentiator between this country and any other in the world is implementation.

Any financial services provider that causes even mild grief to a client will be hauled by either FINRA, SEC, the CFSB or any prosecutor that thinks he or she has jurisdiction!

That is why, in training, it is easy to present case studies of consumer protection from the USA, from well before 2009; well before many of these agencies even came into being.

The criticism that this rule, Reg BI is a watered down version of the Fiduciary Rule that has been killed, ignores that fact.

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