The SEC published a staff bulletin on Wednesday that seeks to clarify how brokers and advisors must address conflicts of interest when providing advice to investors. The guidance, which is looking to set expectations, clarifies advisor obligations around disclosing conflicts of interest under the Investment Advisor Fiduciary Standard and its Regulation Best Interest rule. An SEC official stated, "The steps firms take to address conflicts of interest need to be tailored to their particular business model." Companies are also expected to identify areas in their business where their interests’ conflict with their customers and determine what steps they must take to address those conflicts. The bulletin is designed to help with this process. The guidance identifies some of these common sources of conflicts of interest by outlining factors companies can consider in determining if a particular conflict needs to be vacated and possible approaches to dispute mitigation if that is necessary.
Finsum: The SEC recently published a bulletin with guidance for broker-dealers and advisors clarifying the Investment Advisor Fiduciary Standard and its Regulation Best Interest rule.