In her August 16, 2021, letter to the Securities and Exchange Commission (SEC), Barbara Roper, representing the Consumer Federation of America (CFA), responds to the SEC’s request for information on the effectiveness of Regulation Best Interest (Reg BI) and Form CRS. She argues that Reg BI has failed to meaningfully change broker-dealer behavior, as many continue to recommend high-cost, underperforming investment products that primarily benefit them rather than investors. Roper criticizes the vague language of the “best interest” standard, making enforcement difficult and leaving investors exposed to conflicts of interest.
Roper urges the SEC to strengthen Reg BI by providing clearer guidelines on what it means to act in a client’s best interest and to increase enforcement actions against violators. She also calls for improvements to Form CRS to ensure it effectively conveys key information that helps investors make informed decisions. Overall, she stresses the need for stronger investor protections to ensure financial professionals truly prioritize their clients’ interests.
Letter to the SEC: Standard of Conduct for Investment Advisers and Broker-Dealers
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Summary
In her August 16, 2021, letter to the Securities and Exchange Commission (SEC), Barbara Roper, representing the Consumer Federation of America (CFA), responds to the SEC’s request for information on the effectiveness of Regulation Best Interest (Reg BI) and Form CRS. She argues that Reg BI has failed to meaningfully change broker-dealer behavior, as many continue to recommend high-cost, underperforming investment products that primarily benefit them rather than investors. Roper criticizes the vague language of the “best interest” standard, making enforcement difficult and leaving investors exposed to conflicts of interest.
Roper urges the SEC to strengthen Reg BI by providing clearer guidelines on what it means to act in a client’s best interest and to increase enforcement actions against violators. She also calls for improvements to Form CRS to ensure it effectively conveys key information that helps investors make informed decisions. Overall, she stresses the need for stronger investor protections to ensure financial professionals truly prioritize their clients’ interests.
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Author
Barbara Roper
Senior Fellow
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