News | 06.07.19
SEC's Clayton Explains "Best Interest" vs. "Fiduciary" Duty
A day after passing Regulation Best Interest and the agency's advice standards package, SEC Chair Jay Clayton took to the airwaves to explain the difference between “best interest” and a "fiduciary" standard. In an interview with CNBC, Clayton said of an investment advisor's fiduciary duty: “It's a combination of care and loyalty. You owe somebody a duty of care, and you can't put your interests ahead of their interests.” Clayton added, “Best interest on the broker side has many of the same elements, but we want people to understand that the investment advisor space, and the broker-dealer space, are different. They're very different in the way people get paid. ... We're raising the standard of conduct for broker-dealers — the obligations that they owe to their clients.” The rule in its final version, however, does not strictly define "best interest."
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