News | 06.11.19
Reg BI Limits Brokers' Use of Title 'Adviser' or 'Advisor'
Under Regulation Best Interest (Reg BI), brokers who are not dually registered as investment advisors cannot use the term "adviser" or "advisor" in their title. In the original proposal, restricting title use was in a separate rule. The prohibition is now part of the disclosure obligation of Reg BI, which requires brokers to reveal to customers all material facts relating to the scope and terms of the relationship, including the capacity in which they're acting: as a broker or an advisor. Reg BI could force a major mindset change by brokers and registered representatives, according to Lawrence Stadulis, partner at Stradley Ronon Stevens & Young. "Folks who are only authorized to sell securities as a broker can't use the term advisor because they would violate [Reg BI]," Stadulis said. But James Allen, head of capital markets policy Americas for the CFA Institute, said Reg BI allows brokers to wiggle out of the title strictures and claim they are advisors.
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