Accredited Wealth Management Advisor Practice Exam

Regulation Best Interest, implemented by the SEC, focuses on ensuring broker-dealers prioritize their customers’ interests when providing investment advice. The regulation mandates broker-dealers to act in the best interest of their retail clients, meaning they must exhibit reasonable diligence and care in their dealings. It also compels them to establish robust policies to mitigate conflicts of interest that may arise when making recommendations.

In terms of documentation and transparency, broker-dealers are required to create a Customer Relationship Summary (Form CRS), which is a concise and clear document that outlines their services, fees, and potential conflicts of interest in straightforward language.

However, the regulation does not create new private rights or legal protections for retail clients. It does not give clients the ability to sue broker-dealers or impose new legal obligations beyond those already established under existing laws. Therefore, the aspect of creating new private rights and protections for retail clients is not a requirement of Regulation Best Interest.