Regulation Best Interest Calls for a Shift in Perspective | HTK

Transparency. Accountability. Trust. These are key tenets of any business operating with integrity. On June 30, 2020, transparency comes into focus industry-wide when the Securities and Exchange Commission (SEC) implements Regulation Best Interest (Reg BI) and Client Relationship Summary (Form CRS).

Since the SEC announced its ruling on Reg BI and Form CRS a year ago, HTK has been working hard to prepare to meet the requirements of this new regulation, not only as a firm, but to ensure that our financial professionals are equipped with the training and knowledge to comply, and that our clients are informed about the changes taking place.

With the implementation deadline of June 30 now quickly approaching, it's important for all of us affected by this regulation to recognize that while we need to be fully aware of and prepared to meet the requirements, that "checking the box" is not enough.

Rather, Reg BI and Form CRS represent a fundamental shift in perspective on the relationship that exists between the financial professional and the client, one that has been in the making over the past several years.

For financial professionals, the regulation calls for acting in the best interest of the client, beyond suitability standards — an approach that many of you are already implementing. As the business model has transitioned from product-centric to advice-centric, Reg BI and Form CRS, in that regard, may feel natural to implement. It formalizes the process in which conflicts of interests are disclosed and mitigated.

It calls for all of us, as financial professionals or firms, to be held to greater transparency and accountability when making recommendations and offering products and services.

For consumers, Reg BI and Form CRS asks you to be fully engaged and educated in your financial decisions. You are encouraged to ask questions and fully understand the nature of the relationship as a client. Especially in today’s world, in which “best interest” is rightfully being adopted in every sector from healthcare to technology, empowered consumers have come to expect nothing less. The regulation’s conversation starters can lead to meaningful discussions, and ultimately, reinforce your trust in your financial professional and firm.

HTK has always believed in the importance of personalized service and strong relationships, both between our firm and our financial professionals, as well as our clients. Through June 30 and beyond, we are here to provide support as we enter a new era of financial services and advice.

Reg BI and Form CRS might be a new regulation, but for us, it’s evolution, not revolution. This regulation simply confirms our long-held beliefs and way of doing business — by strengthening relationships through transparency.


Follow along with the latest from HTK. Follow On Linkedin

Read More by this Author

Reflections on "Turning 50"

Insights & Features

This year marked a big milestone — turning 50. Not me personally (not for a few more years), but for our company, H...

Reflections on "Turning 50" Read More

Taking a Cue from Netflix

Insights & Features

“It’s no surprise that the financial advice industry has begun to adopt subscriptions, given the pathways already p...

Taking a Cue from Netflix Read More