August 1, 2018
Adding the Regulation Best Interest requirement blurs the line between investment advisers (who are registered with their state or the SEC and required to act as fiduciaries) and broker/dealers (who, according to the 1940 Investment Advisers Act, are allowed to provide incidental advice in the sale of a product).
Investment Advisers provide fiduciary advice as a primary aspect of their business and are already held to a high standard. Broker/dealers sell products in a transactional manner with incidental advice coming after the sale, if at all - again on an incidental basis. Requiring the Regulation Best Interest elevates the perceived role/responsibility of a broker/dealer to their customers (not clients) and lessens the Fiduciary Standard that Investment Advisors are required to provide to their clients. This, thus, blurs the message of Best Interest and Fiduciary Standard for the public. The Regulation Best Interest indicates that both Broker/Dealers and Investment Advisers provide advice, rather than Broker/Dealers are to provide only incidental advice as originally outlined in the 40 Act.
Maintaining the separation of Broker/Dealer suitability standards and Investment Advisor Fiduciary Standards thus maintains the language of the 40 Act and provides the public with a transparent prospective of when interacting with a salesperson (Broker/Dealer) versus an adviser (Investment Adviser).
Please take this into consideration.